He doesn't use the pulley. As I understand this alternator, the base plate is solidly-mounted to the bike frame and the whole body of the alternator rotates. (There is a pulley moulded into the end of the alternator body, though, that spins with it.)
flattracker drives the body of the alternator, with the tire wrapped around it. The PE could be applied directly to the alternator body, as could a section of sanding belt.
Personally, after a bit more reading, I wouldn't totally discount the sanding-belt idea without trying it. Simple and cheap, if it works OK. (Sanding belts are designed for high-friction applications, after all.)