Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA ) w ith affiliated limited liability partnerships conducting the practice in the United Kingdom, France, Italy and Singapore and as affiliated partnerships conducting the practice in Hong Kong and Japan. The Law Office of Sal man M. Al - Sudairi is Latham & Watkins’ associated office in the Kingdom of Saudi Arabia. In Qatar, Latham & Watkins LLP is licensed by the Qatar Financial Centre Authority. © Copyright 2015 Latham & Watkins. All Rights R eserved. 

# RePower South: Advanced Biomass Energy’s Role in GHG Emission Reductions

February 25, 20151. 

### Background on RePower South and Advanced Biofuel (“ ABFuel ”) 2. 

### ABFuel is a low - cost compliance option 3. 

### RePower South is deploying ABFuel now 4. 

### FIP must include waste - derived fuels 5. 

### EPA should allow the use of existing methodologies

2 

## Agenda• RePower South was created to deploy ABFuel (licensed ReEngineered Feedstock TM ) to power generation facilities

3 

## Who is RePower South?

• RePower South establishes mutually beneficial relationships with the municipalities and power plants that are its key customers and shares revenues with the communities

• As previously discussed with EPA, ABFuel is an advanced fuel technology that harnesses the energy content of discrete components of municipal solid waste (“ MSW ”)• 

### ABFuel is a primarily biogenic fuel, derived from MSW , that lowers GHG emissions and controls criteria and hazardous air pollutants

• 

### ABFuel lowers the cost of compliance with GHG rules

• Reduces direct and lifecycle fossil and non - fossil ( e.g. landfill methane) GHG emissions

• 

### Significantly expands total waste stream recycling penetration and landfill diversion

• 

### Broadly deployable in areas with sufficient waste and coal - generated electricity 

## ABFuel Overview

4• 

### Low - cost to utilities:

• On a delivered MMBTU basis, the energy content of ABFuel is offered at a 10% discount to coal

• Cost and allocation of renewable attributes and GHG reductions negotiated with each facility
– varies by state under current law

• On balance, ABFuel offers greater than 10% GHG reductions at a cost below LCOE of existing coal fired facilities

• 

### Waste processing costs at or below landfilling:

• RePower South’s facility costs covered by waste tipping fees and recycling revenues

• Underlying waste processing done below the cost of landfilling 

## ABFuel Is A Low - Cost Compliance Option

5• 

### ABFuel does not require public subsidies, tax breaks or other incentives to be deployed broadly and quickly

• 

### RePower South will receive revenues from incoming MSW stream ( e.g. tipping fees and recycling revenues) and revenues from sale of ABFuel

• Dual long - term revenue streams with credit - worthy counterparties make RePower South facilities attractive investments

• 

### State and federal environmental benefits provide additional revenues that will be allocated on a facility by - facility basis ABFuel Does Not Require Subsidies Or Incentives

6• 

### ABFuel can reduce GHG emissions by:

• Increasing and expanding recycling, reducing the energy usage and CO 2 generation from the harvesting of virgin materials

• Significantly reducing landfilling quantities, including organic material and the resulting CO 2 and methane emissions footprint

• Directly displacing fossil CO 2 from coal combustion for power generation

• Reducing parasitic loads from control technologies at coal fired power plants

• Displacing coal and the associated GHG emissions from coal mining and transportation

7 

## Greenhouse Gas Reductions• 

### ABFuel will be particularly effective in the Southeastern U.S.

• 

### If 50% of the initial RePower South target facilities are operating, we estimate annual GHG reductions of 3.6 MTCO 2 

### E

• 

### Southeast is relatively more dependent on coal and has less renewable energy generation capacity than the rest of the U.S. 

## Regional Impact of ABFuel

8• 

### RePower South is bidding for a contract with the County of Charleston to process the city’s municipal solid waste

• Meeting with the Finance Committee in March 2015

• 

### Pending licensing and regulatory approvals, RePower South will construct the facilities to manufacture ABFuel

• 

### SCANA, a South Carolina utility, has made investments in Repower South and is negotiating the terms of a fuel supply agreement

• SCANA has publically indicated support for the project 

## Deployment Of ABFuel Is Underway

9• 

### ABFuel can be broadly deployed **anywhere** that there sufficient waste and coal - generated electricity

• 

### Potential for widespread international deployment

• South Africa
– 93% of electricity generated by coal

• China
– 79% of electricity generated by coal

• India
– 68% of electricity generated by coal

• Australia
– 78% of electricity generated by coal ( IEA 2012) 

## ABFuel Is Broadly Deployable

10• 

### W aste - derived fuels must be included in the FIP , to ensure that States will include these fuels in their SIPs

• 

### ABFuel provides benefits of renewable biomass without the negatives of food - based or woody biomass

• 

### Majority of ABFuel’s biogenic emissions are “anyway” emissions

• B iogenic content will otherwise degrade and emit both CO 2 and methane 

## Waste Derived Fuels Need Clear Rules

11• 

### EPA’s prior statements indicates that waste - derived biomass will be credited under the Clean Power Plan:

• “We anticipate that states likely will consider biomass - derived fuels in energy production as a way to mitigate the CO 2 emissions attributed to the energy sector and include them as part of their plans to meet the emission reduction requirements of this rule, and we think it is important to define a clear path for states to do so .” (Clean Power Plan)

• “For waste - derived feedstocks , the EPA intends to propose exempting biogenic CO 2 emissions from GHG BACT analyses .” (McCabe memo Nov. 19, 2014)

• 

### EPA’s revised proposal for the Biogenic Assessment Framework would appropriately treat waste - derived biomass differently from food - based or woody biomass EPA Support For Waste - Derived Biomass Crediting

12

### RePower South’s comments recommended that the Clean Power Plan should allow:

• Credit for early action

• Credit for inside and outside the fence reductions for waste - derived fuels

• Credit for methane emissions reductions

• Clear and consistent treatment for waste - derived fuels using existing accounting methodologies 

## Comments on the Clean Power Plan

13• 

### EPA should allow the use of existing protocols and methodologies for quantifying GHG reductions

• There are many well - established methodologies and protocols

• Development of new methodologies could slow the deployment of ABFuel and similar innovative technologies

• 

### EPA should require that eligible protocols and methodologies:

• Be scientifically sound and methodologically accurate

• Avoid over - estimation of emission reductions 

### Quantifying ABFuel’s Emission Reductions

14• 

### EPA’s WARM is well - suited to conservatively measure GHG emission reductions associated with ABFuel

• Designed to measure emission reductions associated with different waste management practices

• 

### Calculates (1) a baseline GHG emission scenario and (2) an alternative waste management practice GHG emission scenario

• WARM analyzes changes in tons recycled, tons landfilled, tons combusted and tons composted

• 

### WARM a ssumes RDF , which has a dramatically lower conversion efficiency than ABFuel 

## EPA’s Waste Reduction Model (“WARM”)

15• 

### WARM analyzes additional factors to determine the life - cycle GHG reductions:

• Regional “marginal” electricity grid mix emission factor based on the location where the co - firing occurs

• Whether landfill in which the MSW would be disposed has a landfill gas (“ LFG ”) control system, the landfill’s LFG collection efficiency, and whether the LFG control system recovers methane for energy or flares it

• Moisture conditions and associated bulk MSW decay rate

• Emissions that occur during transport of MSW based on distance traveled 

## EPA’s Waste Reduction Model

16• 

### A number of protocols have been developed under the U.N.’s Clean Development Mechanism

• For example, a protocol to quantify methane emissions reductions associated with diverting agriculture waste to be used as a feedstock for certain products

• 

### Voluntary carbon registries have developed GHG reduction protocols for many different types of projects

• Climate Action Reserve’s Coal Mine Methane Protocol quantifies GHG reductions associated with methane destroying devices on active underground coal mines 

## Existing Models & Protocols

17