11

Digesters for Managing Animal

WasteWorkshop

August 21, 2002August 21, 2002Bill Johnson, Alliant Energy Bill Johnson, Alliant Energy

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Alliant EnergyAlliant Energy

We serve approximately 53,000 ag customers in a four-state territory.

Alliant Energy Resources, Inc., our non-utility business, has operations in Australia, Brazil, China, Mexico and New Zealand

6,000 employees in U.S. and internationally

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Generation diversity

Coal Natural Gas Renewable energy sources Distributed resources

== Reliability

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Why Alliant Energy ?

53,000 farm accounts, large rural utility Believe in removing economic barriers Rural economic development Believe in distributive generation Strong environmental ethic Tradition of working with the development of

ag. energy technologies

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Food processing industry environmental challenge

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Seneca Bio-digesterMontgomery, Minn.

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Alliant Energy’s - Wisconsin Biogas Project

10 MW generation Farm, food processor, landfill

& sewage treatment sources 3-year project 5-year contracts 6 cent/kWh (customer

owned)

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10 Megawatts ?10 Megawatts ?

50,000 tons of coal each year 500 coal cars 5 unit trains Electricity for 11,000 homes

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Pilot Project Objectives

Access digester technologies Access generation technologies Remove technology barriers Evaluate utility barriers Access market potential Increase demand for “green energy”

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Deere Ridge Farm, Anaerobic Digester,

Amherst, Wis.

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Double S Dairy, Alto, WI

Flush system Plug flow Hess gen-set Separated solids for bedding and sale

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Topdeck HolsteinsWestgate, IA

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Microturbine

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Engine Monitoring and Switchgear

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Reciprocating Engine

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Heat Recovery System

Utilize heat from exhaust of engine or microturbine

Heat digester Heat buildings Heat hot water heater Heat anything else that needs hot water Refrigeration

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Biomass Lessons Challenges and Opportunities

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Lessons Learned

Digester designs Corrosion Pre-heating costs Soft vs. hard top Local labor and skills Gen-set O&M costs Dewatering Customer expectations Bedding requirements Niche market opportunities BUYER BEWARE, DO YOUR HOMEWORK!

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Barriers to Development of Renewable Energy

Technology

Technology must be solution for the customer and add value to their business

High-risk technologies for customer and utility investment

Utilities have an obligation to energy cost and reliability

Few dominant companies, largely a cottage industry, except for wind

2020

Economic Barriers

Utilities must satisfy many stakeholders: customers, shareowners, regulators, interest groups

Must weigh “price is everything” vs. “environment is everything,” must blend needs

Marketplace drives price, there must be greater demand

Risk management, need rewards for investment risks

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Social – Political BarriersSocial – Political Barriers

NIMBY’ism “big is bad” attitudes Should societal benefits be paid for by society

or by utility owners and their customers? Many political uncertainties…DOE, USDA,

EPA, State/Local Regulations…

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Institutional BarriersInstitutional Barriers

Uniform interconnection standards across utility and state jurisdictions

Net metering Insurance requirements Some utilities charge high access and/or

interconnection fees Lack of renewable energy credits Difficulty with customer aggregation

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Market BarriersMarket Barriers

Dependency on local utility Access to transmission system can be expensive

and complex Limited “green power” program participation Smaller generators have market disadvantages Risk, purchasing power from inexperienced

energy provider

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Biomass Project Success Requires

Favorable power purchase agreements Partnership development Predictable cash flow Market for secondary products Tradable “green qualities” Incentives de-coupled from cost of fossil fuels Access to financing

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Opportunities

Utilities and customers partnering in addressing environmental and energy challenges

Monies from commodity purchase stays in local communities

May allow delaying or avoidance of utility infrastructure investment

Convert environmental liability into economic assets

rr

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Public Policy

“…We have only scratched the surface of developing farm-based sources of renewable energy—ethanol, biodiesel, biomass, wind, methane, hydrogen. Agriculture is not just about food and fiber. Anything we can produce from a barrel of oil, we can also produce on our farms.”

-- -- Sen. Tom Harkin, IA, Senate Agriculture Committee, June 28, 2001

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Philosophies

““Be a price maker not a price taker.”

--Loren Kruse

“Grow what you can sell, don’t sell what you can grow.”

----Duane Acker

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William A. Johnson

Manager, Agriculture Customer Manager, Agriculture Customer ServicesServices

Alliant EnergyAlliant Energy

2777 Columbia Dr.2777 Columbia Dr.

Portage, WI 53901Portage, WI 53901

(608) 742-0824(608) 742-0824

billjohnson@alliantenergy.combilljohnson@alliantenergy.com