Tri-State Carbon X PRIZE: Transforming Carbon from a Waste to an Asset Project Overview Electric cooperatives are leading a unique initiative that will address perhaps the most critical problem facing the electric cooperative network: The impact of restrictions on CO 2 emissions from coal and natural gas fired power plants. The cost to capture and sequester CO 2 will be in the billions, sequester the CO 2 underground may be faced with legal and liability issues, and could force the decommissioning of many coal power plants. Adding new generation capacity is hamstrung by misperceptions that fossil fuels have limited shelf life and do not fit the environmental profile demanded by some interests. Coal generation has seen the greatest scrutiny, but the pressure on gas-fired facilities has already begun. With advances in technology, CO 2 can be converted from a waste into useful fuels, chemicals and other products with market value. But there are significant barriers. New technologies are needed, but it s too early to know which ones will prove out. The public needs dialogue and education about carbon and its potential value. The X PRIZE Foundation s mission is to bring about radical breakthroughs for the benefit of humanity, thereby inspiring the formation of new industries and the revitalization of markets that are currently stuck due to existing failures or a commonly held belief that a solution is not possible. The Foundation s demonstrated expertise using competition and prizes to overcome principal impediments and market barriers to progress is now being directed toward carbon solutions. Using a proven process that engages stakeholders from the general public to potential competitors and to potential adopters of resulting technologies, the Foundation is well positioned to advance how the world manages fossil energy and environmental challenges, and by focusing heavily on the marketing and media aspect of prizes to both support the competition and the sponsors there is widespread exposure to generate goodwill. The Tri-State Carbon X PRIZE competition is a high-stakes, high reward competition that challenges technical teams to create useful and valuable products from fossil fuel generation effluent, including coal and natural gas and for all fossil dependent industries, not just electricity production. The goal: Validate at a commercial scale new technologies and products that make capturing CO 2 from coal plants a revenue stream, not a liability. The first developer to achieve the rigorous competition criteria receives a $10 million reward. Additional competitions may be launched along the way, such as achieving CO 2 utilization from natural gas-fired production streams. Previous competitions have included: the 2005 Ansari X PRIZE to create a private spaceflight vehicle, the 2010 Progressive Insurance Automotive X PRIZE to create 100 MPG equivalent vehicle, and the 2010 Wendy Schmidt oil Cleanup X Challenge. Tri-State G&T has committed to providing the $10 million prize purse and has committed the first $2 million to fund the launch of this initiative. It has also committed its 250 MW Escalante Station power plant to provide on-site support for the testing carbon utilization technologies and, ultimately, to demonstrate the most promising carbon capture, separation and utilization technologies. Sunflower Electric Power Corporation / Kansas State University Institute for Commercialization serve as a Founding Partner along with Tri-State. Sponsors are being sought for this effort to be launched. The total cost of this contest is $37 million. NRECA is building a coalition of interested G&T cooperatives to ensure broad cooperative input and benefit from the technical development. Cooperatives will be assured the ability to participate broadly if a $4 million aggregated sponsorship level is met. (A minimum of $3.5 million supports the multi-year X PRIZE competition and an estimated $500,000
supports the concurrent CRN research and steering panel over five years.) Tri-State and the X PRIZE Foundation are recruiting other sponsors. Duke Energy has already signed on. About the X PRIZE Foundation A 501(c)(3) non-profit Mission is to bring about radical breakthroughs for the benefit of humanity. Leading prize organization in the world, creating and managing high-profile, global competitions to solve the grand challenges of our time Prize model leverages philanthropy, making it more efficient, and stimulates research and development investments worth far more than the prize purse Partnered with top global brands to implement incentive prizes such as Google, Cisco, and Shell, as well as NASA and the U.S. Department of Energy Has world-class Board of Trustees and benefactors including top CEOs and industry leaders such as: Ratan Tata, Eric Schmidt, Larry Page, Craig Venter, Dean Kamen, Jim Gianopulos, and Elon Musk Five prize groups: Energy & Environment, Life Sciences, Exploration, Education, and Global Development Why an X PRIZE? Demonstrated expertise in identifying the principal impediments to progress, whether a lack of established commercial markets or the need for advances in technology Has significant experience in designing and launching large prizes Is an expert in what works and what doesn t work Uses a proven process that engages all potential prize stakeholders from the general public to potential competitors to potential adopters of resulting technologies Focuses heavily on the marketing and media aspect of prizes to both support the competition and the sponsors (see media impression stats in the results section below) Assigns significant effort (including full time personnel) to recruiting and managing teams to ensure diversity and success in all of our prize competitions (example: Qualcomm Tricorder X PRIZE has 183 teams from 25 countries pre-registered and this prize was just launched in early January 2012 more stats on teams below in results section) Builds collaboration and team events into all competitions to help teams and bolster the industry around the competition. Specific items for the Carbon X PRIZE include: o Launch o Carbon Recycling Conference o Team summits (2) o Judges summits (2) o Technology demonstrations (2) o Competition demonstration o Miscellaneous events hosted at the competition site (e.g., Congressional tours) o Award Investments into the prize purse and operations are considered charitable donations due to 501(c)(3) status Has staff of experts in prize design, marketing (including media, social media, and PR), sponsorship services, etc. can do all design and launch in house Competitions have full plans including: o Operations/staffing strategy: Includes the dedicated staffing needs necessary to launch and manage the competition. Identifies full and part-time needs. Provides a one to two line job description for each team member and the associated reporting structure for those team members. o Competition budget: Includes a month-by-month, line-item budget necessary for launching and operating the competition. Includes the following major categories: personnel, events, marketing and communications, travel and entertainment, professional fees, G&A, contingency, and purse.
Marketing and education strategy: Stakeholder analysis. Includes an identification, summary, and prioritization of stakeholders related to the prize. We will prioritize up to five stakeholders that would have the biggest impact on the competition. Stakeholder messaging. For the top five to ten stakeholders, includes an identification of the stakeholders' key marketing needs, and the proposal of key marketing messaging, tactics, and channels to best meet those needs. Metrics for measuring success. Includes the outline of a series of five to ten metrics to track the impact of competition both during and immediately after the competition. Marketing concepts. Includes high-level concepts that align with the top five to ten stakeholders. X PRIZE Key Design Elements Help solve a grand challenge Target market failure(s) Clear, objective & simple rules Audacious yet achievable Benefits of Prizes Complement existing work Pay only for successful outcomes Provide significant financial leverage Encourage new thinkers and approaches Define a problem, not a solution Open to teams worldwide Telegenic and marketable Assure a follow-on business & market Focus a community Mobilize capital Influence public perception X PRIZE Prizes Have awarded four prizes with $23.4 million in purses Have four active prizes with $52.2 million in purses X PRIZE Results The $10 Million ANSARI X PRIZE: First team to privately build a spaceship which could carry 3 adults to 100KM, twice in two weeks. o Winning ship hanging at the Smithsonian Air and Space Museum in Washington, DC next to The Spirit of Saint Louis o 26 teams from seven nations spent >$100 million (Drove $1.2B in investment) o Generated more than 6 billion consumer impressions worldwide The $10 Million Progressive Insurance Automotive X PRIZE: To develop manufacturable, fast, affordable cars that exceed 100 MPGe (miles per gallon energy equivalent). o Won in September 2010 o Top teams achieved between 100 and 139 MPGe o 136 teams from 11 nations spent >$100 million o Generated more than 12 billion consumer impressions worldwide The $2 Million Northrop Grumman Lunar Lander X CHALLENGE: Designed to build an industry of American companies capable of routinely and safely flying vertical take off and landing rocket vehicles useful both for lunar exploration and for other applications. o Created as part of NASA s Centennial Challenges o 12 teams spent > $20 million o Earned contracts with government agencies and private customers The $1.4 Million Wendy Schmidt Oil Cleanup X CHALLENGE: To inspire a new generation of innovative solutions that will speed the pace of cleaning up seawater surface oil resulting from spillage from ocean platforms, tankers, and other sources. o 38 teams from four nations o Teams required to more than double the industry s previous best oil recovery rate
o o Winning team nearly quadrupled the industry s previous best rate And now has improved to six times the rate Winning technology was rated No. 2 on National Geographic's "Most Hopeful Energy Developments of 2011" and by the Washington Post as the No. 13 best moments in innovations in 2011. Technology Approach The costs to manage CO 2 using current technology, carbon capture with amine solvents and geologic sequestration, is prohibitive. A 2007 NETL study i estimates a cost of $80-$115 per ton CO 2 avoided and an 80 percent increase in cost of electricity for a coal plant using today s technology. Instead, the X PRIZE will seek out technologies in carbon separation and recycling pathways including: Biological Chemical/Catalytic Mineralization A review of developing technologies revealed over 130 carbon recycling companies and 90 carbon capture firms. This program enables aggregation of financial and technical resources to solve a large-scale, complex problem with a lower risk portfolio approach that would be too costly for any individual G&T to solve independently. Benefits to Your Cooperative Access to evaluations and testing of multiple, promising technologies. (It s betting on a portfolio instead of trying to pick a winner.) Be recognized as a leader, actively supporting solutions. Opens up potentially less costly ways to address regulation. Help change the public dialogue from carbon as a waste to carbon as an asset. Turn a waste product into a potential revenue stream. Create paths for alternative value proposition for generation. Global reach. Success in previous technical efforts. Generate political capital by showing innovation and leadership Have a seat at a Cooperative Research Network (CRN) Carbon Utilization Membership Steering Panel. Access X PRIZE competition events and research and provide input into CRN s research. Detailed Deliverables and Benefits Be a part of a multi-year proactive effort with high media visibility o Presentation and messaging at NRECA Annual events and industry events such as Power-Gen International and Coal Utilization Research Council annual meeting. o Coordinated outreach via NRECA, CRN, Touchstone, RE Magazine, Statewide publications, X PRIZE marketing, and international news organizations. o An NRECA video campaign. Access to all major X PRIZE events at a fraction of full sponsorship levels o Ribbon cutting, technology commencement, and award ceremonies. o Tours, presentations, and access to vendors for all six laboratory tests in addition to a tour of the commercial scale demonstration at the Escalante Station. Be a member of a CRN-led Carbon Utilization Steering Panel o Funders of the aggregated co-op coalition will have a seat on a CRN-led membership steering panel o Access to unique analysis of selected vendor technologies o Drive premium-prize opportunities Opportunity for collaborative investment in unique Co-op focused prizes such as Using low BTU/high sulfur coal
Finding agricultural by-products Ensure ash meets market standards Direct supplemental CRN research in CO2 utilization Requested Commitment $400,000 from each consortium member Letters of intent requested Potential for flexible payments A representative to serve on the CRN Carbon Utilization Steering Panel. Resources for travel and meeting attendance (on-line and in-person) o 1-3 Trips/year depending upon level of involvement in contest events. Project Timeline 5 year project 4 1/2 year competition Pre Competition Phase Pre-Launch through Q4 12 o Fund Raising, Project design, Creating Buzz Ongoing Competition Launch Launch late Q4 12/early Q1 13 o Ground breaking/ribbon Cutting Ceremony o Team competitors enrolled o Receive Contestant Submissions, Competition Phase 1 Poster Session 6 months o Carbon Recycling Conference o Poster Session hundreds of individuals and teams o Technology selections Competition Phase 2 Payload A 18 Months o Test and select 3 most promising Technologies from dozens of competitors Competition Phase 3 Payload B 6 Months o Test and select next 2 most promising Technologies Competition Phase 4 Full-Scale Escalante Test 24 Months o Six month set up for o Year-long utility test of 5 most promising Technologies Competition Award o Award Ceremony o Additional outreach efforts In addition, there may be interim bonus challenge events as the Soil Carbon Challenge, E2E Challenge, Constituent Removal and Measurement, and 6 percent CO2 Bonus challenge throughout the 4 1/2 year competition. With our national portfolio heavily invested in coal and growing amounts of natural gas, co-ops turn a problematic waste-product into a revenue generator. CRN Technical Contacts, consultants to NRECA: Dale Bradshaw, dale.bradshaw@nreca.coop, 423-304-9284 Tom Lovas, tom.lovas@nreca.coop, 907-351-7846