Practical Experience Reveals That Energy is a Business' Third-Highest Cost.

Practical Experience Reveals That Energy is a Business' Third-Highest Cost. John Hurst www.RenewableEnergyStocks.com January, 2006 With America's commercial business sector leading demand, the cost of providing energy to the nation's business and residential consumers is expected to easily exceed $200 billion this winter. Walter W. 'Chip' Schroeder, President of Distributed Energy Systems Corp. (NASDAQ: DESC), which started out as a hydrogen company, succeeded originally on the strength of the excitement surrounding fuel cells five years ago. "The reality is that nobody has succeeded with fuel cells," he said, "to anything like the degree of performance and particularly cost that they were aiming to achieve by now." With fuel cells still not ready for prime time, Distributed Energy adjusted its sights by adopting ready-for-market technologies and acquiring a company that builds projects and delivers power to end users looking to supplementing their grids and getting more control over their electricity supplies. It worked and Schroeder now says, "We're trying to do above ground what a number of technologies have proven very successful below ground. "Things like directional drilling, seismic and measurement well drilling have greatly improved the ability to turn marginal resources into profitable production. Above-ground technologies are letting us direct energy to its highest and best uses, more effectively. All electricity is not demanded equally. Now, control over the price, reliability and quality of the power is achieved." The subsidiary, Northern Power Systems, designs and installs systems in parallel with a grid at points where the value of electricity is highest. "People need energy for all sorts of different uses, and some are much more valuable than others. Technology is helping to achieve differentiated quality of service in a way that really wasn't commercially feasible even five or 10 years ago. We are building high efficiency (70% or better) systems that yield three to four year payback and significantly improved reliability." he said. George Burnes, President of SmartCool Systems, Inc. (OTC.PK: SSCFF; TSXV: SSC), explains the primary driver towards commercial energy efficient technology as being the desire to reduce operating costs. Energy, he added, is typically the third largest operating expense for a business, ranking behind only salary costs and rent. "In addition to this as we move forward into the 21st century," Burnes stated, "pressure from governments and environmental lobby groups as well as geo-political events is accelerating global demand to reduce the dependence on fossil-fuelled electricity generation. International treaties such as the 'Kyoto Accord' have resulted in many countries formally committing to significantly reduce 'green house gas' emissions. "Recent geo-political instability in major fossil fuel producing regions has only served to increase public demand within North America to reduce dependence on fossil-fuelled electricity generation. This has resulted in cash and tax incentives being offered by utilities and local governments in many states and provinces to encourage industrial, commercial and institutional users to reduce electricity consumption through the installation of energy savings equipment." Burnes said businesses are looking for the means to reduce costs, increase profits and satisfy ever-increasing demands to reduce greenhouse gas emissions and preserve the environment. The Dow Chemical Company (NYSE: DOW) said it has established relationships with a number of organizations on energy efficiency. Dow is an active member of the American Chemistry Council's Energy Team. Dow is also a member of the Consumer Alliance for Affordable Natural Gas (CAANG), which advocates for a renewed nationwide focus on energy efficiency and conservation, as part of a comprehensive and balanced U.S. energy policy. The Company is participating in an industrial energy efficiency campaign initiated by the U.S. Department of Energy and is also a major corporate sponsor of the Alliance to Save Energy's "The Power is in Your Hands" consumer energy conservation campaign, launched in December, 2005. A Dow spokesman in Houston, TX, commented, "Dow is also committed to helping consumers reduce their energy consumption by producing products that help lower electric bills while making a positive difference for the environment. Cars, homes and buildings use significant amounts of energy. Dow offers many energy efficient solutions including STYROFOAM