1 Florida Public Service Commission Workshop Renewable Electrical Generation from Municipal Solid Waste Presented by Joseph R. Treshler Covanta Energy,

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Florida Public Service Commission Workshop Renewable Electrical Generation

from Municipal Solid WastePresented by

Joseph R. Treshler Covanta Energy, Inc.

Safe Waste Disposal and Clean Energy Solutions… For Generations To Come.

July 26, 2007

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Introduction

Highlight the current contribution Energy from Waste (EFW) makes to Renewable Energy Production

Quantify the potential for EFW to provide additional Renewable Energy

Identify vehicles to promote Renewable Energy growth

Background on Covanta Energy

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Coal50%

Nuclear20%

Oil3%

Natural Gas18%

Hydro7%

Geothermal16%

Wind16%

Biomass67%

Solar1%

88,000 GWh

Total U.S. Electricity Generation

U.S. Non-Hydro Renewable Generation

3,970,000 GWh

The Role of Renewable Electricity Generation in the United States

Source: US Department of Energy, Energy Information Administration 2004 Report

Non-Hydro Renewable

2%

88,000 GWh

9% of electrical generatio

n is renewable

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Energy from Waste Generates 34% of the Nation’s Biomass Renewable Electricity

• is a leader in renewable generation

• 7,800 GWh produced from Covanta owned and operated facilities

• 32 Energy from Waste Facilities

• 6 Wood Waste Facilities

• 6 Biogas Facilities

• Provides nearly 10% of the Nation’s Non-Hydro Renewable Energy

Source: US Department of Energy, Energy Information Administration 2004 Report

Biomass

67%

= Total U.S Biomass Renewable Generation

Wood 62%

Energy From Waste 34%

Other BioMass 4%

60,000 GWh

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Clean, renewable electricity

Reduces greenhouse gas emissions

Safe, reliable waste disposal

Recover metal, preserves land and

Ground water

EfW Technology

Dependence on fossil fuels Climate change Population growth Resource management

Metal: 50 lbs

Power: 550 kWh

Ash: 10% of original volume

Inert - no methane generation

Municipal Solid Waste (MSW): 2000 lbs

EfW is a specially designed energy generation facility that uses household waste as fuel and helps solve some of society’s big challenges

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Industry Overview of Energy from Waste

US EPA -- EFW disposes of 13% of the nation’s waste 89 facilities 29 million tons per year 36 million people served 27 states Generation capacity in

excess of 2,700 MW 16 million MWhrs of

renewable power generated annually

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Proven, Utility Grade Technology

Exclusive North American licensee for Martin GmbH Reverse Acting Stoker Grate technology – successfully processed more refuse worldwide than any other system available,

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Florida’s Renewable Generation Capacity is Quite Low

12.2%Oil

13.4% Nuclear

29.4%Coal

29.9% Natural Gas

7.2% Non-Utility & Other*

8% Interchange

*Includes 1080.7 MW Renewable Energy Generation

Source: FL PSC

47% EFW506 MW

1% Waste Water10 MW

2% Landfill Gas20.4 MW

11% Waste Heat

114 MW

22% Black Liquior

230.7 MW

17% Other Biomass

175.6 MW

Current FL generation Capacity

51,569 MW

Current FL renewable generation Capacity

1,081 MW or 2% of the state’s capacity

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The “Power” of EFW in Florida

One ton of MSW Has the energy equivalent of

One barrel of fossil fuel oil or 10 MCF of natural gas!

EFW is a proven source of Florida renewable energy Annually Floridians generate 31.2 million tons of MSW which is

the energy equivalent of 31.2 million barrels of oil. Currently 6.5 million tons (17,900 tons per day) of MSW can

be processed annually by Florida’s 12 EFW Facilities. This eliminates the need for 6.5 million barrels of oil or 65

million MCF of natural gas. 506 MW of renewable electrical energy is generated on a daily

basis by Florida’s EFW Facilities Saving annually over 8,125 acre feet of precious landfill space

through volume reduction.

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The Environmental Benefits of EFW

Produces renewable electricity with less environmental impact than almost any other source of electricity

US EPA April 14, 2003

Provides a net reduction in Green House Gas Emissions (GHG)

Displaces CO2 (GHG eqv 1) that would otherwise be generated as a result of producing electricity from other fossil fuels sources

Eliminates the release of uncollectible Methane (GHG eqv 21) from raw Municipal Solid Waste Landfills

Recycling of the Ferrous and Non-ferrous metals recovered following the EFW process avoids the GHG emissions that would be associated with the smelting of virgin ores

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More EFW is Being Done…

By 2010, Renewable Energy from Florida EFW is planned to increase by 85 MW:

Lee County 20 MW Hillsborough County 17 MW Palm Beach County 28 MW Pasco County 20 MW

Bringing to 591 MW the EFW Renewable Energy made available while processing less than 25% of the Florida MSW being generated.

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More EFW Can Still Be Done…

Over 18 million tons of raw MSW is still being landfilled every year in Florida. EFW Technology can convert this waste into approximately 1130 MW of

new Renewable Energy A significant number of highly developed areas of the State still heavily dependent

on land filling raw MSW as their primary method of solid waste management.

Orange County 1,820,638 TPY Duval County 1,483,456 TPY Brevard County 704,476 TPY Volusia County 499,242 TPY Collier County 477,095 TPY Manatee County 343,095 TPY Seminole County 303,015 TPY Sarasota County 297,421 TPY

Developing new EFW capacity to manage the nearly 6 million tons of MSW available from these areas alone would increase the State’s Renewable Energy generation by approximately 372 MW while increasing our energy independence by the equivalent of approximately 6 million barrels of oil each year.

This will only be possible with the right incentives

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Encouraging Florida Renewables

Current Situation 63% of Florida’s electrical generation is fueled by

oil and gas Low energy payment rates and contracting

structures that have been offered since the early 1990’s for new EFW capacity inhibited further development

Florida has no functional wholesale electricity markets to support EFW or other renewable energy development; local utilities are the only buyers

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Encouraging Florida Renewables

The Future 81% of Florida capacity additions are currently

proposed to be fueled by oil and natural gas Renewables including EFW must be a part of

changing this future Executive Order 07-127 signed by Governor Crist

at the Climate Change Conference limits allowable GHG for electric utilities

Executive Order 07-127 requires utilities to produce substantial additional amounts of electricity from renewable sources

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Encouraging Florida Renewables

The Future (Continued) Recent Supreme Court Ruling United Haulers Association

Inc. vs. Oneida-Herkimer affecting the landmark 1994 flow-control decision in C&A Carbone vs Clarkstown

New (and renewed) EFW contracted energy generation must be valued based on avoiding the most expensive fossil fuels

Development of a functional and liquid wholesale electricity and renewable credit trading markets will stimulate growth

Long-Term fairly priced energy contracts will encourage new project financing

Encourage/require Renewable Portfolio Standard (“RPS”) to encourage the development of new renewable energy generation in the state

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Renewables Portfolio Standards

State Goal

☼ PA: 18%¹ by 2020

☼ NJ: 22.5% by 2021

CT: 23% by 2020

MA: 4% by 2009 + 1% annual increase

WI: requirement varies by utility; 10% by 2015 goal

IA: 105 MW

MN: 25% by 2025(Xcel: 30% by 2020)

TX: 5,880 MW by 2015

*NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops)

☼ AZ: 15% by 2025

CA: 20% by 2010

☼ NV: 20% by 2015

ME: 30% by 200010% by 2017 goal - new RE

State RPS

☼ Minimum solar or customer-sited RE requirement* Increased credit for solar or customer-sited RE

¹PA: 8% Tier I / 10% Tier II (includes non-renewables); SWH is a Tier II resource

HI: 20% by 2020

RI: 15% by 2020

☼ CO: 20% by 2020 (IOUs)*10% by 2020 (co-ops & large munis)

☼ DC: 11% by 2022

DSIRE: www.dsireusa.org June 2007

☼ NY: 24% by 2013

MT: 15% by 2015

*DE: 10% by 2019

IL: 8% by 2013

VT: RE meets load growth by 2012

Solar water heating (SWH) eligible

*WA: 15% by 2020

☼ MD: 9.5% in 2022

☼ NH: 23.8% in 2025

OR: 25% by 2025 (large utilities)5% - 10% by 2025 for smaller utilities

*VA: 12% by 2022

MO: 11% by 2020

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EFW: A Proven Component of Florida’s Renewable Energy Future

Florida (+ 22 other states and Washington DC) define EFW as Renewable Energy

To date 12 states and Washington DC define EFW as eligible for Renewable Portfolio Standards

Efficiently recovers/exports over 550 KWhrs/per ton of MSW processed

EFW is clean - “Exceeds requirements of the Clean Air Act” – US EPA

Most advanced pollution controls of any energy generation source

Reduces landfill requirements in excess of 90% Eliminates the release of toxic emissions and GHG’s (especially

methane) from “raw waste” landfills EFW and recycling are compatible: Recycling rate of EFW

communities exceeds the national average by over 5%

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Key Elements of a Successful Renewable Portfolio Standard

Establishes clear annual targets that must be met by any load serving entity selling electricity to end-users in the state (private, public, munis, etc.)

Ensures aggressive targets to foster renewable energy innovation and development

Clearly defines qualifying technologies/fuels Allows markets to foster technology development without favoring

specific technologies or fuels Allows Renewable Energy Certificate (“REC”) trading as separate

product from traditional capacity, energy, and ancillary service produced by a generator

Establishes independently operated entity to operate trading markets and monitor/verify REC generation, use, and load serving entity compliance

Contains compliance, enforcement, and penalty provisions Defines Alternative Compliance Payment (“ACP”) in the $50 to

$80/MWh range to be paid by any load serving entity that does not meet the RPS annual target

Uses the funds generated by the ACP to support renewable generation R&D and energy efficiency programs

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“Florida has a beautiful precious environment that needs to be protected. This

should be our issue”

Gov. Charlie Crist

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Additional Information

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Covanta Energy Corporation

The 32 EFW facilities Covanta operates: Dispose of nearly 5% of nation’s waste Process about 15 million tons Produce about 1,200 megawatts of clean, renewable energy. Generate nearly 10% of the Nation’s Non-Hydro Renewable

Energy

In Florida, Covanta operates: 4 EFW facilities:

Pasco County, FL Hillsborough County, FL Lee County, FL Lake County, FL

These facilities: Process over 1.25 million tons per year of MSW Generate about 114.5 megawatts per hour

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EFW Energy is Renewable Energy

Municipal Solid Waste (MSW) is a sustainable resource for “local” power

MSW is biomass. EFW efficiently converts energy value of MSW to electricity and/or steam EFW contributes to fuel diversity EFW facilities are located near power users, increasing cost efficiency. EFW avoids vehicle fuel consumption/emissions associated with increasingly distant

transportation to landfills. EFW avoids landfill greenhouse gases and toxic emissions

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EFW: A Success Story

“Upgrading of the emissions control systems of large combustors to exceed the requirements of the Clean Air Act Section 129 standards is an impressive accomplishment. The completion of retrofits of the large combustion units enables us to continue to rely on municipal solid waste as a clean, reliable, renewable source of energy. With the capacity to handle approximately 15 percent of the waste generated in the US, these plants produce 2,800 megawatts of electricity with less environmental impact than almost any other source of electricity.”

-- letter to IWSA from Assistant Administrators Jeff Holmstead and Marianne Horinko, US EPA

February 2003