Cost of Renewable Energy Spreadsheet Tool (CREST) for Anaerobic Digestion

1. Cost of Renewable Energy Spreadsheet Tool (CREST) for Anaerobic Digestion Michael Mendelsohn Patrick Serfass Anthony Callendrello Jason Gifford March 13th 2013

2. Promoting the Use of Biogas O167 Members from the U.S., Germany, Italy, Canada and the UK O All Industry Sectors Represented • Key Industry Goals: • OPromote biogas markets, technologies and infrastructure • O Achieve policy parity • O Promote as a best practice for environmental stewardship and greenhouse gas reduction www.americanbiogascouncil.org

3. Changing the Biogas Industry through: • Legislative and Regulatory Affairs: • Federal: Biogas Tax Credit; Clean Energy Standard; NAT GAS Act; Farm Bill • Introduction of Biogas Investment Tax Credit(Rep. Kind and Rep Lewis) • States: California, Massachusetts, Wisconsin, more • Sharing Expertise: • 4 Specialized Working Groups • Marketing and Education: • Briefings, presentations, and webinars for customers, policy makers, and the general public • Member Exposure • Speaking opportunities in ABC workshops, webinars • Large Industry Network – 6,000+ member company contacts • Entire supply chain of production, processing and use Join Today! Contact Josh Lieberman at jlieberman@ttcorp.com or 202-640-6595 x 322

4. Dedicated to maximizing the production and use of biogas from organic waste Some of our members: 4

5. Use of CREST Model in State Programs NREL Webinar Tony Callendrello, NEO Energy LLC americanbiogascouncil.org

6. Large Potential for Development of AD Projects • 12,000+ US sites available for development • Farms: 8,241 (only counting dairy and swine) —1700 MW • Wastewater Treatment Plants (WWTPs): 3,899—750 MW • 2,000+ WWTPs > 1 MGD don’t have a digester • 378 WWTPs producing, but not using biogas • Landfills: 540 • Commercial/institutional/industrial sites: Likely thousands • Germany has developed over 7,500 AD projects • Average annual growth since 2001 of ~20% 6

7. Where Companies are Developing Biogas-Electricity Projects • Total Projects: 324* • Total Power Capacity: 649 MW* • Total Industry Investment: $3.5 billion • Average: $5.74 million/MW • Average: $12.6 million/project Number of Companies Developing Projects *As reported by individual companies to the American Biogas Council, Fall 2011 7

8. Key to Deployment of AD • Energy rate that ensures financial feasibility • Feed-in-tariff, avoided cost (e.g. Vermont, Hawaii) • Ceiling price (e.g. Rhode Island) • AD applications and revenue streams complicate modeling • There are a variety of AD applications • Agricultural (manure, energy crops) • Source separated organics (food processors, supermarkets) • Waste water treatment plants (sludge or co-digestion) • Other potential revenue streams • Tipping fees • Digestate • CREST model has the flexibility to model these parameters • CREST model is a useful tool for setting rates (Rhode Island) • Other states can look to the CREST model for setting AD rates

9. Thank You! Anthony M. Callendrello, COO NEO Energy LLC 1New Hampshire Avenue, Suite 207 Portsmouth, NH 03801 direct: 603.766.8748 cell: 603.512.9174 acallendrello@neoenergyusa.com Website: www.neoenergyusa.com

10. Cost of Renewable Energy Spreadsheet Tool (CREST)An Introduction & Primer Jason Gifford Sustainable Energy Advantage, LLC March 12, 2013

11. Renewable Energy Cost Modeling Project Objectives: • Create a toolkit for cost-based rate-setting in the US • Report, Models, User Manual • CREST models: • A cost-of-energy analysis tool intended to assist policy makers considering cost-based renewable energy incentive policy. • Models: Solar, Wind, Geothermal, Anaerobic Digestion • CREST models (and Report and User Manuals) are publicly available at: http://financere.nrel.gov/finance/content/crest-model or Google “CREST model”.

12. Project Team • National Renewable Energy Laboratory (NREL) • Exeter Associates, Inc. • Sustainable Energy Advantage (SEA) • Meister Consultants Group (MCG) • CREST peer review network included several PUCs: • Colorado • Hawaii • Michigan • Washington

13. CREST Model Key Assumptions: Cost-based, Fixed Payment, Long-Term Balancing Priorities: Ease of Use vs. Advanced Functionality Automation vs. “No Macros” Inputs • Size & Performance • Capital Costs • O&M Costs • Financing • Ownership/Tax • Supplemental Revenue Streams • Incentives • Reserves • Depreciation Constraints • Debt Service Coverage Ratios • Minimum • Average Features • Level of Cost Detail • Public/Private Ownership • Tax benefit carry-forward • Incentives • Outputs • Cost of Energy • Levelized Cost of Energy

14. Using CREST: Why and How?Well-Defined Objectives are Important • What are you trying to accomplish? (Policy maker perspective) • Least-cost? • Rapid deployment? • Cost-based analysis: identify all-in LCOE • “Gap”/“Premium” analyses can be done as a derivative • Identify a range of outcomes • Uncertainty of inputs • Variety of project configurations • “Prototype” or “Representative” project • Supplement other analyses, data and stakeholder feedback in rate-setting proceedings. • Inputs can be consensus-driven, based on historic data, or estimated based on experience.

15. Model introduction & walk-through…

16. Sustainable Energy Advantage, LLC Office: 10 Speen Street, 3rd Floor Framingham, MA 01701 (508) 665-5850 www.seadvantage.com Contact: Jason Gifford tel. 802-846-7627 jgifford@seadvantage.com

17. Thank You! The CREST AD model is available at: https://financere.nrel.gov/finance/content/crest-cost-energy-models The slides and recording for this webinar will be available on: http://financere.nrel.gov