PARETO ENERGY Ltd Green Energy Development and Infrastructure An Electric Power Solution when there

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PARETO ENERGY LtdGreen Energy Development
and InfrastructureAn Electric Power
Solutionwhen there is no more business as
usual

• March 20th, 2008

Contact John T Tim Tyler Director and
COO Pareto Energy Ltd Washington,
DC 202-625-4388 Ttyler_at_paretoenergy.com
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3 December 2007 Maryland PSC Report

• The issues discussedare framed by a factual
  premise about which there is no ambiguity or room
  for serious dispute
• unless steps are taken now, the State of Maryland
  faces a critical shortage of electricity capacity
  that could force mandatory usage restrictions,
  such as rolling black-outs, by 2011 or 2012.
• We face this crisis because Maryland sits in a
  highly congested portion of the regional electric
  transmission system (which makes it difficult to
  bring more power in) and because we use more
  electricity than is generated here. We can
  respond essentially in two ways we can add more
  capacity, either through new generation or
  transmission, or we can reduce the amount of
  electricity we use. At the end of the day, we
  will need to do some of both.

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Pareto is Making Things Happen

• After some hard work, got law passed on 22 June
  in Connecticut and that kicked off a flurry of
  projects
• Project pipe-line of over 50 projects in the US
  and the UKmostly at initial stages
• On-going design stage at Stamford Government
  Centerthis will probably be the first iron in
  the ground
• The initial assessment for the Ansonia EID was
  presented on Valentines Day Oxford CT and
  Stafford Park NJ have also signed
• Paretos EID approach is a political movement in
  Connecticut we are getting calls positive
  editorials every day
• The legal, financial legislative team is in
  place
• Paretos design team (CDS LLC) is standing by and
  can work with engineering firms like URS, RTKL
  and others
• Many Mayors are putting us in charge of
  developing solutions to their electrical power
  problemswe are working with governors too

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Pareto Energy Ltd

• Who we are
• Developers of Energy Independence District
  (EID) concept and framework
• Enable, organize and finance Energy Independence
  Districts that optimally deploy energy saving
  technologies, renewables, on-site power and micro
  grids.
• US Conference of Mayors Platinum Partner
• Our focus
• Development of Energy Independence Districts
  (EIDs)
• Start with an anchor tenant or a cornerstone
  project
• Respond to the customers needs
• Reliable sustainable / green energy
  infrastructure
• Efficient finance with tax-exempt bonds
  incentives and grants

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What is an EID?

• An EID is a locally monitored, managed and
  controlled electric power and thermal energy
  distribution system utilizing local generation
  resources backed up by utility-supplied
  electricity (grid power.)
• An EID always has a legal identity and local
  involvement and participation.
• An EID is affordable, reliable and sustainable.

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EID Local Microgrid Approach
Transmission Lines
Central Plant
Step-Up Transformer
Energy Improvement District
Recip Engine
Micro- turbine
Commercial
Wind
Landfill Gas
Fuel Cells
Onsite Generation
Storage Technologies
Geothermal
Traditional CHP
Renewables
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The Energy Independence District (EID) Concept gt
Multiple Benefits

• EID Affordable Energy
• EID Reliable Energy
• EID Clean Energy
• EID Competitive Economic Advantage
• EID Flexible Solution
• EID Modular implementation

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Effect of an EID Approach on Reliability

• Insulates operations from grid stress through
  local, on-site power generation
• Central grid back-up
• More reliable and stable power supply
• Improved power quality for critical energy
  applications
• Local users in control of their own energy
  resources
• Ideal for large data centers and other
  businesses, hospitals, universities, homeland
  security

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EIDs utilize a new interconnection approach

• Microgid Interconnection is essential pure
  islanded operation is more expensive and less
  reliable
• Current solutions are inadequate IEEE 1547 and
  other standards only work consistently for
  smaller projects (lt2MW)?
• For larger projects, extensive customization and
  negotiations with utility required highly
  vulnerable to delays and gold-plating
• Current solutions cannot combine multiple small
  generators on a set of private wires
  (microgrid) instability and equipment damage
  will result
• But there is a solution

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Proprietary Technical Approach Solves
Interconnection Microgrid Problems

• Removes previous synchronization and stability
  problems of connecting multiple generators to
  each other and to the utility grid entirely
  non-synchronous solution
• Removes safety and fault current problems for
  larger installations DC inverters physically
  limit potential power flows
• Removes power quality issues for private wires or
  deteriorated utility grids software controllers
  combine sources into perfect AC signal, using
  5µs switching times for power transistors
• Stabilizes utility grid can sell VAR, current,
  and frequency stabilization services back to
  utility

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The Grid View of Paretos Interconnection
Solution
Micorgrid power distribution (private wires)
side-by-side with utility grid
Microgrid combines on-site and nearby off-site
power sources
Dual feed to every user
No synchronization with utility grid required
Allocation among sources adjusts second-by-second
based on economics and availability

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The User's View of Paretos Inter-connection
Solution
All sources utility, microgrid, on-site
combine into single perfect signal on
building's internal power bus
If one source fails, others increase
Small amount of energy storage smooths out
transitions and interruptions
Engines can be tuned to peak efficiency without
needing 60Hz output
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Short Outages Matter
Length of Typical Outages
Facility down-times after 1-sec outage
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n3 Reliability 5 minutes / yr

• Five-9s reliability
• Each generator meets mission critical loads,
  ensures continuous operations
• 3 reserve generators, plus UPS, plus the grid as
  back-up

99.999 up-time 5 min average downtime /
yr Typically five to twenty years between outages
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EID Clean/Green Energy

• Improvement to Regional Air Quality and reduction
  of Greenhouse Gas
• Cost effective, renewable, low emission, clean
  technologies
• Demand Management
• Renewable Energy such as Solar, Fuel Cells,
  Landfill Gas, Wind, Geothermal, Biomass, Water
  Treatment plants, Photo-voltaic
• Combined Heat and Power (CHP)Trigeneration
• Smart Energy Grids and Thermal Storage
• 30Mw of CHP has the equivalent positive
  environmental impact of a142Mw of Solar or about
  100Mw Wind Power facility

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Clean and Affordable Energy Supply
Conventional Generation (1/3 Fuel Use)
Local Power CHP (3/4 Fuel Use)
Local Power (Trigeneration)
EID
Stressed Transmission Distribution System
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Trigeneration Efficient Power
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An EID is Sustainable
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EID Affordable Energy

• Recycle of excess thermal energy for cooling and
  heating to minimize operating costs
• Utilization of low cost funding sources that
  include
• State and Federal Grants
• Energy Independence District Bonds
• Real Estate Investment Trust Equity
• Syndication of and Federal Tax credits
• Avoids utility distribution cost upgrades and
  focuses on where power is needed
• Modular and can be implemented quickly as needed

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What are the tools we have?

• Technology flexibility
• Access to cutting-edge interconnection
  technology that enables interconnection at the
  distribution level
• Geographical flexibility
• Legal and legislative expertise

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EID Integrates Multiple Energy Options and
Solutions
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Pareto Energy EIDThird Party Reactions

• In Stamford last August, Connecticut Light
  Power cut electricity to the business district to
  prevent a wider blackout after underground power
  cables failed during a heat wave. In Ansonia,
  rate increases by United Illuminating are
  expected to add 200,000 to its municipal
  electric bill. Both cities may have found a
  solution to the power problem, one that ensures
  reliable power that may come with a cost savings.
  They are the first Connecticut cities to take
  advantage of a new state law that allows them to
  set up energy improvement districts with the
  authority to issue bonds to pay for the
  establishment of an independent electrical grid
  with its own power plants The independent
  grids value rises in areas of concentrated
  development where heat recaptured from
  electricity generation can warm and cool
  buildings. The Stamford grid could potentially
  cut by an estimated 300 million the federal
  congestion fee imposed on Connecticut because of
  the lack of adequate power lines. The promise of
  these micro electricity grids has yet to be
  realized. But the need for them is clear.
• New Haven Register Editorial, January 4, 2008

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Pareto Energy EIDThird Party Reactions

• A new financing tool may accelerate the growth of
  microgrids and distributed generation. Along the
  way, it may make it much easier for customers to
  divorce themselves from the grid. Under a
  Connecticut law passed in June, municipalities
  may now form energy improvement districts
  (EIDs). We warned you a year ago that microgrids
  were an important and potentially disruptive
  trend. Now we're back to suggest that this
  financing mechanism could accelerate their
  growth. EIDs give businesses a new way to create
  their own power. Dr. Shalom Flank, Pareto
  Energys CTO, makes the point that an EID allows
  users to operate parallel to the existing grid.
  The EID can draw power from the existing grid or
  use its own. Using a transaction model based on
  cost, reliability and service, it will choose the
  best power source and delivery options for its
  customers. Dr. Flank believes that it is a
  "win-win" situation for strapped utilities and
  frustrated customers Given the development of
  this financing tool, SGN believes a growing
  number of real estate developers and systems
  integrators will set themselves up to, in
  essence, compete with regulated utilities. They
  will seek to sell and operate turnkey microgrids
  for high-end housing developments, office parks,
  military bases and high-rises. That's why
  forward-thinking utilities should be testing
  microgrid concepts, as is happening now at AEP,
  Sandia and Chula Vista. And they should begin a
  dialog with regulators EIDs are as much an
  opportunity as a danger. If regulators will allow
  it, building and/or operating microgrids could
  become a new revenue stream for utilities, on
  their own or in joint ventures with systems
  integrators.
• Smart Grid News, Nov 13, 2007

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Pareto Energy EIDThird Party Reactions

• The Towns EID would function as a electrical
  load aggregator, providing highly reliable, high
  quality power to the industrial zone and airport
  facilities.
• Power would be sold by GE Towantic/Northeast
  Utilities at rates between the wholesale
  rate(rate needed to profitably operate the
  merchant plant) but less than the retail rate
  charged to the distribution companies through the
  market mechanism.
• Waste heat from generation activities would be
  provided to the WHIP, Waterbury-Oxford Airport,
  Technology Park and properties south on Christian
  Street (Omegas large tracts plus the Garden
  Homes and Mastrianni Properties on Airport Access
  Road)
• Small Peaking Plants including a fuel cell
  application would be used to provision the local
  load during the period when the main Towantic
  plant was not generating.
• Operating the peaking plant to serve the
  industrial zone and airport loads plus recovering
  and distributing waste heat from both plants
  would accelerate capital recovery for the peaking
  facilities. This would accelerate peaking plant
  capital cost recovery relieving ratepayers of
  some of the additional costs. DPUC would view
  this favorably in permitting processes.
• Benefits to Oxford
• Discounted industrial power and waste heat for
  cooling would differentiate Oxford and provide a
  competitive advantage to attract larger, energy
  intensive industries.
• Oxford could accelerate the build out of
  Technology Park in both Oxford and Middlebury
• Power and Waste Heat provisioning could become a
  new Oxford Revenue Stream through the EID
  organization.
• The peaking plant that serves the local load
  could be fuel cell based, which would allow
  operation with absolute minimum emissions and
  qualify the entire project for Clean Air Fund
  subsidies.
• The peaking facilities would remain available to
  serve peak loads during hot and cold weather as
  required providing Oxford industries with the
  highest quality uninterruptible power supply
• Town government and educational facilities would
  experience reduced energy costs
• Herman Schuler, Economic Development Director
  to Oxford Board of Selectmen, January 8, 2008

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Pareto Energy EIDThird Party Reactions

• The city has taken a step toward changing the
  way it generates and purchases power, thanks to
  efforts by Pareto Energy of Washington, D.C.
  Over the past two months, Pareto has identified
  the best local options for improving the citys
  energy usage, by stabilizing rates and reducing
  energy waste and the citys carbon footprint At
  the sites where businesses depend on extremely
  reliable power to operate, Warner envisions the
  companies using primarily their own microgrids
  for energy, and switching to the grid only for
  backup. Warner suggested a fun side project for
  the city an Ansonia Energy Museum and Learning
  Center, which could attract area schoolchildren
  and give the town an economic boost. In the 19th
  century, Ansonia was home to William Wallace,
  inventor of the electric dynamo. In 1878, Thomas
  Edison traveled to Ansonia to visit Wallaces
  shops, where what Edison saw accelerated his
  invention of the incandescent lamp.
• New Haven Register, Feb 15, 2008

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1.6MW engine with trigeneration
Fuel Cell
Thermal Aquifer
Solar
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