Energy Champions Training Module 2.1 Energy Basics

1. Energy Champions TrainingModule 2.1Energy Basics

2. Energy: The Ability To Do Work • Energy comes in different forms: • Heat (thermal) • Light (radiant) • Motion (kinetic) • Electrical • Chemical • Nuclear energy • Gravitational • There are two types of energy: • Stored (potential) energy • Working (kinetic) energy

3. Energy Sources Can be Renewable or Nonrenewable • Non-renewable (a source that we are using up and cannot re-create) • Oil and petroleum products — including diesel fuel, gasoline, heating oil, and propane • Natural gas • Coal • Uranium (nuclear energy) • Renewable (an energy source that can be easily replenished) • Solar energy from the sun  electricity and heat • Wind • Geothermal energy from heat inside the Earth • Biomass from plants, which includes wood, corn ethanol, biodiesel from vegetable oil, and biogas • Hydropower from dams

4. Energy Sources – Global

5. Energy Sources – US

6. Energy Sources – US

7. Energy Sources – China

8. Energy Sources – India

9. Energy Sources – UK

10. Comparative Energy Content

11. Comparative GHG Emissions of Fuels Source: US EIA 2009 Cummins Confidential

12. Cummins Global Energy Footprint GHG Emissions, 2012: 721,000 MT CO2e Energy Cost, 2012: $125M (excluding JVs)

13. Electricity Cummins Confidential

14. Electricity Generation & Distribution • Electricity is not stored – whatever is generated is instantly used • For best efficiency, electricity is transmitted at very high voltage then converted to lower voltage at your home or facility • Typical generation efficiency loss: 60%; transmission loss: 7%

15. Electrical Grid

16. Electricity Sources – US

17. Electricity Sources – China

18. Electricity Emission Factors • Greenhouse gas (aka “carbon”) emission rates for regional grid electricity • CO2, N2O, methane incorporated into CO2e factors from regional electricity generation source mix • Accepted GHG reporting protocol Cummins Confidential

19. Renewable Energy Credits (RECs) • Tradable energy commodities that represent proof that electricity was generated from an eligible renewable energy resource • Only the owners of the REC can claim the carbon emissions benefit to avoid double counting • Ex.1: Carbon benefits of renewable electricity purchased under special agreement with a utility cannot be claimed by the site, if the utility owns the REC • Ex. 2: Carbon benefits of solar power generated and used on-site cannot be claimed if RECs are owned by a third party • If the site cannot claim the carbon benefits, use the regional electricity emissions factor Cummins Confidential

20. US Industrial Electricity Usage

21. Electricity Measurement • Electricity is measured in units of power called watts • In honor of James Watt, the inventor of the steam engine • One watt is a very small amount of power. About 750 watts equals one horsepower • We usually measure things in a “kilowatt” (kW) which represents 1,000 watts. • 10 x 100-watt light bulbs would use a kW • A human climbing stairs is doing work at a rate of about 200 watts

22. Electricity Measurement • Electricity is measured in units of energy called watt-hours • Those 10 x 100-watt light bulbs turned on for an hour would use one kilowatt-hour (1 kWh) • A watt rating is like the horsepower of your car • A watt-hour is like the fuel consumed in your car

23. Understanding Electrical Power Let’s look at a simple example in order to better understand these terms . Let’s say you are at the game and it is a really hot day. You order up a glass of your favorite brew. The thirst-quenching portion of your beer or ginger ale is represented by kW Unfortunately, life isn’t perfect. Along with your beer or ale comes a little bit of foam. This foam is represented by kVAR. The total contents of your glass, kVA, is the summation of kW (the ale or beer) and kVAR(the foam). kVAR kVA kW

24. Power Factor • Ratio of real power flowing to a load over apparent power • Relates mostly to induction motors • Between 0-1 • Poor <85% • Fair 85%-95% • Good >95% • Efficiency & Power Factor

25. Power Factor (PF) Electric Power is made up of: • kW – real power • kVA– apparent power • kVAR– reactive power Power Factor = Cosine (kVA/kW)

26. Power Factor on your Bill

27. Power Factor, KVAR, kW

28. Benefits of a High Power Factor Improving a systems power factor will reduce the total power consumed by an electrical installation and will provide the following benefits: • Financial saving • by reducing power factor charges, electricity costs are reduced. • Extended equipment life • reduced electrical burden on cables and electrical components. • Increase load capacity • provide additional capacity for other loads to be connected. • Environmental benefit • reduced power consumption means less GHG emissions and fossil fuel depletion by power stations.

29. Natural gas Cummins Confidential

30. US Natural Gas Usage

31. US Industrial Natural Gas Usage

32. Natural Gas Measurement • Unit is Therms • 1 Therm = 100,000 Btu = 29.3 kWh • Natural gas is sometimes priced in Deca-Therms • 1 Deca-Therm = 10 Therms= 1 MMBtu • Natural Gas is sometimes metered in MCF • 1 MCF = about 10 Therms • 1 MCF = 1000 cubic feet = 1,026,000 BTU

33. Hydraulic Fracturing (“Fracking”) Cummins Confidential

34. Natural Gas – Impact of Fracking in US • aka hydraulic fracturing

35. Natural Gas – Impact of Fracking in US

36. Typical Natural Gas Usage

37. DISTRICT HEATING Cummins Confidential

38. Typical Heat Distribution System • Steam or hot water piped from power plant to site • Cummins GHG protocol assumes energy source is 90% coal, 10% gas Cummins Confidential