1. Cogeneration FacilityOverview Energy Services www.energy.unc.edu

2. History

3. Joshua Walker Gore (1852-1908) and Gore Building at Cogeneration Facility • Came to Chapel Hill in 1882, taught philosophy, physics and engineering • Designed 1st campus steam plant in 1895 • Located near old Venable Hall • Burned coal and wood • Started cogeneration using a small steam turbine in 1901 • New plant built on same site around 1920

4. Original Cameron Avenue plant • Constructed in 1941 • Commitment to coal, 2 pulverized coal boilers

5. 1978 • Cameron Avenue Plant in 1974 • Open coal pile • Bag houses to address stack emissions

6. Cameron Avenue Plant in 2005

7. District Energy System

8. U.S. Average Generating Efficiencies 100% 80% UNC Cogen • 60% 40% 20% 0% • Traditional thermal electric plant • 65% of energy goes to a cooling tower, lake, etc.

11. Steam Distribution System

14. Plant Operation

15. Plant Operation • Built to utility standards, complete redundancy throughout • 2 circulating fluidized bed boilers, 250,000 lbs/hour • Only boilers capable of operating the turbine generator • Lower temperature than pulverized coal or gas, inhibits NOx • Limestone injection limits SO2 but creates CO2 • 40 minutes before pressure incident if tripped • 1 natural gas/oil boiler, 250,000 lbs/hour • Fuel and boiler diversity to increase reliability • 10 minutes before pressure incident if tripped

16. Circulating Fluidized Bed System

17. NSPS 40CFR60, Subpart Db

18. Finances

19. How Expenses Are Paid • * Utility revenue comes from state appropriated budget for state-supported buildings

20. Revenue Sources

21. Major Rate Components • Debt Principal and Interest • 34% of total budget • $94 million remaining on debt to construct plant, paid in 2022 • Fixed Costs • Do not vary with amount of steam produced • Examples: labor, maintenance • Variable Costs • Fuel is 30% of total budget • Natural gas is purchased at the interruptible rate

22. State of NC Requires Lowest Cost Operation All-in cost includes limestone and ash disposal, and adjusted for lower efficiency of natural gas

23. State Recaptures Any Savings • Office of State Budget and Management • Determines increase factor • Adds to prior year’s actual expenditures • Example • Assume state appropriated utility budget is $100 million • Assume actual expenditures are $95 million • Assume OSBM increase factor is 10% • Increase = $9.5 million (calculated on $95 million) • $95 million + $9.5 million = $104.5 million new budget • Appropriated utility budget increased by $4.5 million

24. State Inadvertently Recaptures Energy Budgets for New Buildings • When a new building comes on line mid-year • Partial year’s funding received for the 1st year • Funding for remainder of full year ‘s cost provided in 2nd year • If the first year’s partial funding is not spent, then it is recaptured in the increase procedure and permanently lost • Partial year funds normally are not spent because • Utility costs are transferred from the contractor when the building is accepted and move-in occurs later so usage is low • Consumption is not uniform, may miss a summer or winter peak • No debt service or fixed cost components in the utility rates in the first year of a building’s operation

25. Alternative Energy

26. Climate Action Plan • UNC was an early adopter of the American College and University Presidents Climate Commitment • Pledged climate neutrality by 2050 • Climate Action Plan adopted by University in September 2009 • Alternative Energy Study, looked at alternatives to coal, began 2 years before Climate Action Plan issued

27. Energy Conservation Green Building Transportation Behavior Supply Chain Offsets Approach

28. Near-term Portfolio

29. Near Term Impact

30. A. Biomass Gasification at Carolina North (CN) B. 100% Coal Substitute C. 50% Coal Substitute D. Plasma Gasification of MSW - Syngas E. Shops and Informal Contract Recycling F. 50% Natural Gas, 50% Coal Substitute G. Plasma Gasification of MSW: Syngas + Natural Gas H. 50% Natural Gas I. Biomass Gasification w/ Biochar Production (CN) J.Energy Conservation (Mid-High Investment) K. Large Scale Biomass L. Biomass Gasification at CN (Phase II) M.Solar Thermal (CN) N. Solar Thermal to Electricity (Troughs) (CN) O. Solar Thermal to Electricity (Dish Sterling) (CN) P. Demo Scale Concentrating Solar PV (CN)

31. A. Biomass Gasification at Carolina North (CN) B. 100% Coal Substitute C. 50% Coal Substitute D. Plasma Gasification of MSW - Syngas E. Shops and Informal Contract Recycling F. 50% Natural Gas, 50% Coal Substitute G. Plasma Gasification of MSW: Syngas + Natural Gas H. 50% Natural Gas I. Biomass Gasification w/ Biochar Production (CN) J.Energy Conservation (Mid-High Investment) K. Large Scale Biomass L. Biomass Gasification at CN (Phase II) M.Solar Thermal (CN) N. Solar Thermal to Electricity (Troughs) (CN) O. Solar Thermal to Electricity (Dish Sterling) (CN) P. Demo Scale Concentrating Solar PV (CN)

32. 50% Natural Gas 50% Coal Substitute 100% Coal Substitute Plasma Gasification Large Scale Biomass Near-Term Portfolio Long-Term Common LFG Banked Offsets Long-Term Alternative Additional Projects

33. Biomass Issues • Fuel supply chain and cost • Front end fuel handling • Storage • Feed systems • Impact on combustion and heat transfer surface • Baghouse impacts • Ash disposal impacts

34. Biomass Plan • Test protocols – February 2010 • Dried wood pellets tests – Spring 2010 • Torrifiedwood tests – Fall to Winter 2010/2011 • Evaluation and implementation plan development – 2010/2011 • Burn 2012 – Dependent upon fuel supply reliability and extent of required modifications

35. Questions