Biomass Gasification for Industry: CostCompetitive

1
Biomass Gasification for IndustryCost-Competitiv
e Clean Alternatives to Fossil Fuels

• Presentation to the 1st Ohio Summit on Supply
  Chain Opportunities in Alternative Energy
• June 20, 2007
• Thomas Meth
• Executive Vice President, Intrinergy

2
Gasification for Industry Helping Industrial
Customers Meet Strategic Energy and Environmental
Challenges with Renewable Energy
Natural Gas Prices

• Energy and environment have become board-level
  decisions in the face of rising prices and
  volatility and increasing government regulation
• A robust, but fragmented, supplier base of
  compelling, proven, and efficient renewable and
  alternative energy technologies exist today in
  the market
• Despite wider awareness of wind and solar
  approaches to renewable energy and an increased
  desire to benefit from renewables, the industrial
  segment continues to perceive capital investment
  in renewable energy as expensive, unreliable, and
  speculative
• Intrinergy is one of the worlds few renewable
  energy utilities, enabling industrial customers
  to benefit from renewables without investing in
  the capital, operations, of this non-core
  business

Global CO2 Emissions
3
Intrinergy Bridges Historical Challenges of
Gasification by Enabling Industrial Customers to
Benefit from Renewable Energy
Industrial Partners
Landfill
Biomass Feedstock from Community/Region
Industrial Process Material
without assuming the financial, operating, or
technology risk usually associated with
innovative solutions.
4
Industrial Gasification Solutions Can Be
Positioned Competitively Against Alternatives in
the Energy Marketplace
Natural Gas
High Cost
Facilities Mgmt Powerhouse Providers
Gasification Technology Suppliers
Oil
Biomass Boilers
Electric Boilers
Environmental
Harmful
Target Market Manufacturers primarily
motivated by energy cost concerns but
increasingly mindful of environmental benefits
Utility Energy Services
Coal
Low Cost
5
Intrinergy is Deploying 80MM in Capital and Has
Secured Over 300MM Contracted PPA Revenue for
Industrial Gasification Facilities
6
Excellence in Core Capabilities Across the
Biomass Gasification Energy Value Chain Are Cost
of Entry
Proven Experience in Building and Operating
Energy, Chemical and Manufacturing Plants
Feedstock
Energy Conversion Tech
Treatment
Application

• Deep market knowledge of biomass, recycling, and
  residuals products on regional basis
• Broad material handling, processing, and
  logistics experience

• Access to broad range of renewable energy
  technologies
• Extensive understanding of technology
  appropriateness, strengths, and weaknesses

• In exclusive partnership with leading chemical
  and energy process technology developers
  developing next generation gas treatment and
  conditioning approaches
• Substantial environmental and safety capabilities
  on proven control and operating technologies

• Core competencies in boilerhouse and powerhouse
  operations
• Market leading expertise in combustion
  engineering, CHP, and burner-tip integration

Track Record of Successful Origination,
Structuring, Corporate Development and Financing
7
Fossil Fuel Markets Drive Considerations About
Economics and Customer Appetite For Gasification
Alternatives Long-Term Inside the Fence
Contracts Create Value for Both Parties
Natural Gas market delivered cost (NYMEX)
6 Fuel Oil
Coal (delivered pricing)
Harder to compete w/depreciated coal combustion
assets
8
Gasification Also Promises Significant
Improvements in GHG Emissions Compared to Fossil
Fuels
Air Emissions Comparison 500,000 MMBtu
Regulated pollutant emissions based on EPA AP 42
factors GHG emissions modeled using EPA WARM
model for greenhouse gases
9
As a Result, On-Site Gasification Helps Customers
to Take Community and Environmental Leadership

• Reductions in Greenhouse Gas Emissions
• An Intrinergy facility typically reduces
  greenhouse gas emissions 10,000 tons per year
  relative to the customers prior emissions
  profile
• GHG reductions equivalent to
• 270 acres of forest preservation
• 7,200 passenger cars not driven for one year
• Eliminate Landfill Contributions
• For many customers, Intrinergy can help the
  facility become a a net-negative (better than
  zero) landfill contributor

GHG equivalent calculations from US Climate
Technology Cooperation Gateway
10
Intrinergy Improves the Environment, the
Community, and the Bottom Line

• Intrinergy enables customers to take
  environmental leadership
• Intrinergy delivers dramatic reductions in
  facility greenhouse gas emissions
• Intrinergys energy compares favorably with the
  cleanest available fossil fuels and achieves up
  to 99 reductions in harmful air emissions
• Intrinergy enables customers to market their
  commitment to sustainable energy and zero
  landfill contribution
• Intrinergy enables customers to take community
  leadership
• Introduction of an Intrinergy installation
  diverts 35,000 tons per year of material from
  the landfill
• Intrinergys facilities create approximately 24
  new, skilled jobs in the community
• Intrinergy delivers cost benefits and capital and
  operational savings
• unavailable elsewhere
• Intrinergy reduces customers energy and
  environmental costs and can accommodate fixed or
  variable pricing structures
• Intrinergy bears all of the capital costs of each
  project, requiring NO capital investment or lease
  commitment from its customers
• Intrinergy owns and operates the facility,
  typically shifting significant powerhouse and
  other energy/environmental operating and
  maintenance expenses to Intrinergy

the Result is Cost-Competitive, Clean, Renewable
Energy for Customers and Community
11
End Product Defines Technology Selection
Criteria

• Definitions
• Gasification The thermal decomposition of solids
  in the presence of restricted oxygen insufficient
  to allow combustion
• Pyrolysis The thermal decomposition of solids in
  the absence of oxygen
• Incineration The thermal destruction of solids
  in the presence of excess or unrestricted oxygen
• Flexibility of Gasification

12
Each of the Gasification Design Principles Has
Its Own Set of Strengths and Weaknesses

• Gas Energy Content (btu/ft3)

Downdraft
Pyrolysis
Fluid Bed
Updraft
Low
High
Feedstock Flexibility
Downdraft
Pyrolysis
Fluid Bed
Updraft
Low
High
Capital Cost
Downdraft
Pyrolysis
Fluid Bed
Updraft
Low
High
Environmental Profile
Downdraft
Updraft
Pyrolysis
Fluid Bed
Low
High
Conversion Efficiency
Pyrolysis
Downdraft
Fluid Bed
Updraft
Low
High
Breadth of Applicability
Downdraft
Pyrolysis
Fluid Bed
Updraft
Low
High
13
Capital And Operating Costs Can Also Inform an
Analysis of the Project Feasibility for Various
Industrial Gasification Projects
Electricity Generation
Cold
Hot
24/7

300,0001,000,000 MMBTU project size
Medium (gt500) BTU syngas (gas cleaned quenched)
lower (150-400) BTU syngas
sensible heat
chemical heat
5-10 commercialized projects
1-2 commercialized projects
14
Despites the Challenges for Power Generation,
Gasification Can Deliver Compelling Economics for
Electricity Production Depending on Cost of
Feedstock Mode of Generation
Thermal
Feedstock Cost ( per ton )
CHP
Gas Turbines
IC Generators
Steam (full condensing)
Fully Loaded Cost per MW hr
15
Even with Proven Gasification Technologies,
Feedstock Strategy Can Ultimately Make-or-Break
Industrial Installations

• Key considerations in calculating cost per MMBTU
• Transportation expense
• Moisture content
• Preparation costs
• Gasification technology premium
• Commodity feedstocks vs. Opportunity" feedstocks
• Closed loop vs. open loop

16
Amidst The Array of Options, Intrinergy Is
Developing Replicable Platform Solutions Two
have Emerged The Cold Gas and Steam/CHP Platforms

• Two major platforms have emerged (i) renewable
  energy fired combined heat and power
  (steam/electric) and (ii) direct displacement of
  natural gas (cold gas)
• The cold gas platform presents a much larger
  market opportunity but has required investment in
  engineering and a staged validation of the
  technologies
• Intrinergys first cold-gas project is has been
  field-erected and is currently being commissioned
  in Coshocton Ohio two additional plants will
  follow in Alabama
• Intrinergys steam/electric installations provide
  renewable solutions among a range of competing
  alternatives available to customers
• Intrinergys first steam projects will start up
  in Belgium and Wiggins, MS
• Fuel supply acquisition and processing facilities
  have become an essential investment vehicle as
  part of each energy facility
• Control over long-term fuel supply is essential
  and where credit-worthy counterparties are not
  available, Intrinergy has elected to vertically
  integrate, like Intrinergys Enviva Materials
  Processing facility in Ohio

COLD GAS
STEAM / ELECTRIC
Ohio
Belgium
Alabama (1)
Mississippi
Alabama (2)
17
Intrinergys Cold Gas Platform Targets Direct
Substitution of Natural Gas in Industrial
Applications
Treatment
Complex Gas Separation
Pollutant Removal
Traditional Stack Baghouse
18
Intrinergy Is Commissioning Its First Cold-Gas
Facility in Ohio and is Currently Building
Several Identical Plants in Alabama
19
Intrinergys Steam CHP Platform are Built on
More Widely Adopted Fixed Bed Gasification
Alternatives
Treatment
Complex Gas Separation
Pollutant Removal
Traditional Stack Baghouse
20
QA
Intrinergy, LLC10408 Lakeridge Parkway Suite
900 Richmond, VA 23113Tel [phone]Fax
[phone]www.intrinergy.com
Thomas Meth Meth_at_intrinergy.com Executive Vice
President [phone] x103
21
Appendix A Case Studies