vision – chicago: hub of the 21 st century clean energy economy
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RED | the new green www.recycled-energy.com
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Vision – Chicago: Hub of the 21st Century Clean Energy Economy
Growing Chicago’s Clean Energy Economy
Sean Casten,President & CEORecycled Energy Development, LLC
May 11, 2010University of ChicagoChicago IL
RED | the new green www.recycled-energy.com
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What is Chicago’s core competence?
• Richard Longworth’s question• Author, Caught in the Middle: America’s Heartland in the Age
of Globalism • Former senior correspondent for Chicago Tribune• Now senior fellow at Chicago Council on Global Affairs
• How has Chicago avoided the economic collapse that has struck the rest of the rust belt?
• Longworth’s answer: other cities specialized in making things while Chicago specialized in understanding how things are made
• World leaders in manufacturing-focused finance, advertising,
consulting, insurance, logistics are all based in Chicago
• How does Chicago clean energy economy best capitalize on these innate skills?
RED | the new green www.recycled-energy.com
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Chicago has deep understanding of how heat & power are produced and used.
• 2/3rds of US fossil fuel use / CO2 emissions is associated
with the production of heat and power.
• Any transition to a clean energy economy will ultimately be measured by its ability to reduce our fossil fuel use per unit of economic activity.
• Chicago’s industrial understanding gives knowledge base not found in other regions• GTI, UIC Industrial Assessment Center, etc.
• The premier global energy recycling firms are all based in Chicagoland, drawn by regional competencies• Recycled Energy Development, Primary Energy,
Capital Power, Lakeside, Endurant Energy, others.
RED | the new green www.recycled-energy.com
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RED representative project
• Project will generate 60 MW of power from presently wasted heat• Will produce 464,000 MWh of fuel-free power/year – same as
would be produced by 265 MW of solar PV.• Will lower the cost of silicon production - and therefore, PV.
RED | the new green www.recycled-energy.com
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Primary Energy representative project
• 95 MW of power recovered from the exhaust of 268 coke ovens.• Saves host ~$40 million/year with negative CO2 emissions/MWh.
• A clean energy economy depends upon steel, silicon, cement and other innately carbon-intensive raw materials; reducing their CO2-
intensivity is key.
Courtesy Primary Energy
RED | the new green www.recycled-energy.com
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A clean energy economy needs a goal-driven, holistic policy.
• Favored paths change over time, creating short-term incentives at odds with long-term capital investment.
• Nuclear, ethanol, wind, PV have all seen spectacular
boom/bust cycles over past 40 years in US and Europe• Incentives wax/wane with electoral cycles and energy crises
• Cyclicality of incentives ironically at odds with goals.• Regulatory volatility has raised cost of capital for cleanest
(often lowest risk) technologies.
• Chicago’s manufacturing-dependent economy will suffer so long as environmental policies are in conflict with economic policies.
• Clean energy is not innately expensive – but clean energy
policy is often incompatible with cheap energy policy.
RED | the new green www.recycled-energy.com
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Deploying low-cost, clean generation requires reforms to affect power price and contract tenure.
• No new baseload generation in nearly 30 yrs• Retail prices trended towards marginal costs as long as there
was spare generating capacity on nuke/coal/hydro fleet• Supply constraints driven prices up since 2001, will continue
• Wholesale markets also drive down to marginal cost; no generation
technology (clean or dirty) can be built & amortized based on
wholesale market signals.• Markets not yet deep enough to provide long-dated contracts
• Long-dated contracts generally not available outside of utility
commissions (which don’t work for non-utility participants) and
path-driven RPS mandates; many win/win low cost & clean
approaches have no route to market.
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