Fostering New OffGrid Solutions NJ Clean Air Council

Fostering New Off-Grid Solutions NJ Clean Air Council April 1, 2009

§ Founded in New Brunswick, NJ in 1886 § 250 operating companies § Approximately 120, 000 employees § 14, 900 employees and retirees in NJ § Operations in 57 countries § 3 Divisions: Consumer, Pharmaceuticals, Medical Devices

Climate Friendly Energy Policy 1999/2003 Achieve a 7% absolute reduction in Green House Gas (CO 2) emissions by 2010, compared to a base year of 1990

CO 2 Reduction Pathway: A Balanced Approach § Energy Efficiency § On-site Cogeneration § On-Site Renewables: Solar, Wind, LFG, Biomass, Geothermal § Green Power Purchases § Carbon Offsets & Sequestration

CO 2 Capital Funding Process August, 2004 § $40 million per year in capital relief for projects worldwide § Projects provide good financial returns: 10 -15% Internal Rate of Return § Projects provide meaningful CO 2 reduction

CO 2 Reduction Projects since 2005 • 63 projects approved for funding • $128. 3 million US • 120, 000 metric tons CO 2/yr • Average IRR: 17. 3% • 45 Projects Complete 6

Efficiency Energy Best Practices Rev. 2007 § Stage 1: Management Practices & Continuous Improvement § Stage 2: Energy Purchasing & Monitoring § Stage 3: Air Handling (HVAC) § Stage 4: Motors & Pumps § Stage 5: Boiler Systems § Stage 6: Chiller Systems § Stage 7: Electrical & On-site Generation § Stage 8: Lighting § Stage 9: Compressed Air § Stage 10: Manufacturing & Other Load Reductions

Geothermal Projects De. Puy - St. Priest, France Geothermal Heating / Cooling System § § Ground water heat pump Provides all heating & most cooling for 7, 000 s. m. HQ building Vistakon – Limerick, Ireland Geothermal Cooling System § Utilizes underground water flow

Biomass Projects § 350 k. W boiler provides heating for distribution center ALZA, Mountain View, CA Landfill Gas Generation Centocor, Cork, Ireland Biomass Boiler Cilag, Schaffhausen, Switzerland Wood Chip Boiler § 2. 1 MW boiler provides process & HVAC steam § § Installation of 3 MW of electrical power Waste heat recovery

Solar Thermal Projects Mc. Neil Consumer Ft. Washington, PA 124 k. W Thermal System for Boiler Pre-heat J&J China, Shanghai Domestic Hot Water

Cogeneration Projects Ortho Clinical Diagnostics – Raritan, NJ Gas Turbine, 2007 § § 1. 6 MW – Kawasaki Gas Fired Turbine Heat recovery, steam generation Ortho-Mc. Neil Pharmaceuticals Raritan, NJ Reciprocating Engine, 2009 § 3. 5 MW – Jenbacher Engine § Heat recovery, hot water

Company: Cordis Location: Warren, New Jersey Project: 72 k. W Solar Photovoltaic Roof Mounted System Completed: May 2002

Company: Janssen USA Location: Titusville, New Jersey Project: 522 k. W Solar Photovoltaic Roof Mounted System Completed: February 2003 13

Company: J&J Consumer Products Location: Skillman, New Jersey Project: 505 k. W Solar Photovoltaic Tracking System Completed: October 2005

Company: Ethicon Inc. Location: Somerville, New Jersey Project: 250 k. W Solar Photovoltaic Roof Mounted System Completed: February 2006

Company: J&J Corporate Location: New Brunswick, New Jersey Project: 234 k. W Solar Photovoltaic Tracking System Completed: March 2006

Company: GPSG Location: Raritan, New Jersey Project: 515 k. W Solar Photovoltaic Tracking System Completed: December 2007

Hyatt Hotel – New Brunswick – March 2009 Currently have three new solar projects in development at NJ locations.

Company: GPSG Location: Vacaville, California Project: 1, 194 k. W Solar Photovoltaic Tracking System Completed: September 2007 19

Commitment to Sustainable Design All new construction to be LEED certified Certification Level Incremental Energy Cost Reduction vs. Existing Buildings Certified 0 -0. 5% 26% Silver 0. 5%-1. 5% 32% Gold 1. 5%-3. 5% 44% Platinum 6% 44%

J&J PRD Lab Goes for LEED GOLD RC-1 Laboratory, Springhouse Campus, PA Designed to operate using 45 % less energy than ASHRAE 90. 1 - 2004

NJ Track Record of Leadership § § § § NJ BPU Clean Energy Program Renewable Portfolio Standard NJ Global Warming Response Act RGGI NJ Energy Master Plan LEV Program NEEP Energy Efficiency Strategy for NJ Draft Global Warming Response Act Recommendation Report

Moving Forward… § Execute on plans, with emphasis in the short term on efficiency, equipment standards (CFL’s, appliances, etc) and building codes. § Continue to support distributed generation by industry: cogeneration, biomass, solar. § Industry’s role – Run businesses efficiently and implement distributed generation projects where it makes sense. § Utilities’ role – Deliver low-carbon power. Execute CHP, solar, wind, biomass on a scale that is cost effective. Utilities must be rewarded for selling less. § The net impact on GHG emissions should be a critical consideration for all State decisions.

Moving forward… § Support national climate change legislation to set targets and timetables based on science (IPCC) and establish an economy-wide cap & trade system (allow RGGI to become part of a national system). See USCAP Blueprint for Legislative Action at www. uscap. org § A national cap & trade system will establish a market-based price for carbon that will drive innovation and investment to meet environmental goals at the lowest cost.

THANK YOU ! Dennis Canavan dcanava 2@its. jnj. com 732 -524 -6269