ABENGOA BIOENERGY ABENGOA BIOENERGY R&D Biomass derived energy Southwest KS Project Kansas Renewable Energy Conference September 25-26, 2007 Topeka KS

ABENGOA BIOENERGYABENGOA BIOENERGY R&D

Biomass derived energySouthwest KS Project

Kansas Renewable Energy Conference

September 25-26, 2007Topeka KS

Thomas W. Robb, Ph.D.Abengoa Bioenergy R&D


www.abengoabioenergy.com

Abengoa Bioenergy


Abengoa is a technological company that applies innovative solutions for sustainable development in infrastructures, environment and energy sectors. It is present in over 70 countries where it operates through its five Business Units: Solar, Bioenergy, Environmental Services, Information Technology, and Industrial Engineering and Construction.

Abengoa overview

Profit and Loss Account(M €)

Sales 2,677.2 32.3 2,023.5 578.8 16.5Net Earnings attrib. to Parent Company 100.3 52.0 66.0 16.1 20.1Gross Cash Flows from Operating Activities (**) 287.9 33.0 216.4 53.8 18.3

Important Variables

Margin (% Gross Cash Flows/Sales) 10.8 10.7 9.3Gross Cash Flows/Financial results 3.13 3.68 3.32Return on equity (ROE) (%) (***) 22.45 14.91 10.09Data per share:- Earnings per share (€) 1.11 0.73 0.18 19.9- Dividend per share (€) 0.16 0.15 0.05 12.3

(*) CAGR: Compound Annual Growth rate.

(**) Earnings before interest, tax, depreciation and amortization, adjusted by the works flows done for own fixed assets

(***) Net earnings/ Shareholders'funds

% Variation (06-05)

% CAGR (96-06) (*)

2006 2005 1996


Ethanol production from vegetal raw materials (cereal and biomass)

Abengoa

Bioenergy

Abengoa

Bioenergy

Bioproducts

Abengoa Bioenergy Business

Renewable BiofuelNull CO2 emissions

DGS – Animal feed

CO2 – Industrial applications

Ethanol

ETBE

Direct blendingHydrogen

CerealCereal

Biomass

Biomass

ABENGOA BIOENERGYABENGOA BIOENERGY R&D Production Process

Technology based in fermentation of sugars

Sugar (glucose)+ Air CO2 + Ethanol

C6H12O6 + O2 3 CO2 + 3 C2OH6

Yeast

Used feedstock is transformed into sugars, the process would change depending on the chemical composition:

Sugar beet or sugar cane: direct fermentation

Cereal: starch, previous saccharification (enzymes)

Lignocellulosic biomass: cellulose and hemicellulose. Hydrolysis to break long chains and produce C6 and C5 sugars

Level of

ComplicationFeedstock

price

Each feedstock yields different co-products


Feedstock Preparation Transformation into sugars

Fermentation Distillation

Collection

Sugar case

Milling and filtering

DistillationFermentationC6

Cereal case

Cooking DistillationFermentationC6

SaccharificationLiquefactionMillingFeedstock cleaning

Lignocellulosic Biomass case

Conditioning Milling Separation L/STermochemical hydrolysis

Distillation

2nd Enzymatic Hydrolysis

FermentationC6

FermentationC5

Production Processes


Abengoa Bioenergy Goals

Promote development of seeds with improved characteristics to establish win-win contracts with farmers, link certified seeds to the contracts.

• Abengoa Bioenergy is establishing strategic alliances with seeds

companies to develop/improve specifics crops • Promote better agronomic practices under long term

contracts to increase farm income

Promote energy crops for ethanol production

• Abengoa Bioenergy is working closely with research centers to promote the development of crops for ethanol production.

• Abengoa Bioenergy is helping governments define policies and R&D programs to promote energy crops.

Feedstocks


Objective

Taylor made energy crops for the different conversion pathways and for particular regions ensuring sustainability and environmental quality. Main crops characteristics:

Domestic crops, high starch and biomass yields per hectare, stress tolerances (abiotic, disease…)

Minimum inputs maintaining sustainability

Composition to maximize the ethanol

Ensure sustainability and environmental quality (from…analysis of microbial communities underlying soils… to formulation of management guidelines for biomass removal)

Feedstocks


Cereal technology – current situation

All Abengoa Bioenergy plants are currently running on cereals Yields varying depending on cereal used DDGs produced containing 30% protein and 10% humidity

Cereal technology – Future situation

ObjectiveIncrease competitiveness of the production facilities.

Abengoa Fuel and Feed (AFF) process to be patented by Abengoa Bioenergy

StepsDecrease amount of residual starch (minimum facility modifications)Increasing protein content (>40%)Increase digestabilityIncrease the quality of the co-product (DDGs)

Technology


Enzymatic hydrolysis technology – current situation

Abengoa Bioenergy has develop a proprietary fractionation technology for biomass processing.

Pilot scale plant in York, (Nebraska, US) to validate our biomass fractionation process and integrate downstream systems

Demonstration plant in Babilafuente (Salamanca, Spain) to validate biomass to ethanol enzymatic technology at a commercial scale.

Enzymatic technology – Future situation

ObjectiveCompetitive production of ethanol from biomass.

StepsComplete the process engineering development

demonstrations phases. Build first of a kind commercial facility after the demonstration of the technology in Salamanca and Nebraska Valorization of all biomass fractions

Technology


Steps (continue)

Research in the biological deconstruction of the biomass to produce tailor made enzyme mixes for each specific case:

Determine fundamental physical and chemical factors in the recalcitrante of lignocellulosic biomass to processing

Understand cellulase and cellulosome Develop new enzymatic systems to soften termochemical

pretreatment conditions

Advance in the sugar fermentation to ethanol through the engineering of microbial systems to achieve:

high yield with complete sugar utilisation, minimal by- product formation, and minimal loss of carbon into cell mass.

high final ethanol concentration tolerance to inhibitors present in hydrolysates higher overall volumetric productivity, especially under

high solids conditions

Technology


Biomass gasification and synthesis (BtL) technology –current situation

Available catalysts are not productive enough to make the process economically feasible.

Low conversion per passMixed alcohols product with low ethanol selectivity

Several existing technologists licensing gasification processes for syngas production for further chemical synthesis.

Catalysts development programs in European research centers, combined with process design and analysis.

Recently granted by the US-DOE a program (3 MM$) for synthesis catalysts development

Technology


•La Coruña (50 Mgal) • York, NE (55 Mgal)

•Colwich, KS (25 Mgal) •

Portales, NM (30 Mgal) •

Ravenna, NE (88 Mgal)

• Cartagena (40 Mgal)

•Salamanca (52 Mgal)• AB France (65 Mgal)

Abengoa Bioenergy is the only international producer of ethanol

Production Facilities in EU Production Facilities in U.S.

EU (Mgal) 2006 2007 2008Production 142 142 208Construction * 66 66

EU (Mgal) 2006 2007 2008Production 142 142 208Construction * 66 66

US (Mgal) 2006 2007 2008Production 110 198 286Construction 88 88

US (Mgal) 2006 2007 2008Production 110 198 286Construction 88 88

YTD Production Capacity


Abengoa Bioenergy plans to be a leader in commercialization of cellulosic ethanol production

• Objective

• Build first commercial scale cellulose facility by 2011

• 15 million gpy from biomass, 85 million gpy from starch (hybrid facility)

• Cornerstones

• Two biomass facilities now underconstruction

• York, NE pilot plant (operational 2006) will demonstrate biomass fractionation and fermentation technology

• Salamanca, Spain facility (2 mgpy - operational 2007) will demonstrate enzymatic hydrolysis technology


DOE integrated biorefinery solicitationDOE integrated biorefinery solicitation

•Overview

DOE will award of up to 40% of the cost of a biorefinery facility ($76.8 million)

Award criteria:• Facility must be able to utilize 700 bone dry metric tons of biomass

per day• Facility must be replicable and proposal to include appropriate

deployment plan of the proposed technology• After construction costs are paid, the facility must be profitable

without subsidies

Additional merit points given for:• Significant showing of state support• Energy generation from multiple sources feedstocks• Barrels of oil displaced


Risk mitigation for biomass availability and site selection

• Risk factors– Inclimate weather during biomass harvest period

• Due to this risk factor, Eastern US corn-belt was not considered as a viable location for plant location until one-pass harvest technology is available (potential for one in seven years for biomass harvest to be limited)

– Biomass crop residue abundance• As the DOE is focused on cereal crop residues, areas such as

California and South East US (wood residue) were not considered as viable locations for proposal

– Multiple sources of biomass• Multiple biomass sources demonstrate plant replicability over

a wider geographic area• Multiple biomass sources with harvest periods during different

times of the year reduce risk of biomass harvest being compromised by bad weather

• Multiple biomass sources and harvest times spread harvest machinery investment and will reduce feedstock costs

DOE integrated biorefinery proposalDOE integrated biorefinery proposal







Biomass available in Kansas38 million tons per year

Crop Corn Milo Wheat Switchgrass

Harvested Acres 3,400,000 2,600,000 9,500,000 2,900,000

Production (bu) 464,000,000 195,000,000 380,000,000

Residue 11,000,000 6,700,000 12,800,000 7,500,000

DOE integrated biorefinery proposal, con’tDOE integrated biorefinery proposal, con’t


Abengoa’s hybrid plant concept

• 35 million bushels grain facility– 88 million gallons ethanol– 290,000 tons feed co-product

• 245,000 BD metric tons biomass (315,000 short tons-as is)– 400 BD metric tons/day

• 15 million gallons ethanol

– 300 BD metric tons/day• Syngas production• 1,597,200 MMBTU (syngas+flue gas)

– 100% steam needs of biomass processing– ~30% steam needs of grain to ethanol processing

• Syngas can be utilized for production of chemical intermediates

• Opportunity to leverage infrastructure and many plant operations



Technical process


• Enzymatic Hydrolysis (EH) will convert biomass to ethanol, lignin and biomass animal feed.- The EH technology is being developed in house and will be tested and improved at the facilities in York, NE (pilot plant) and Salamanca (demo plant).- Coproduct development (lignin and biomass animal feed) is being performed and will contribute to the overall profitability of the facility.

• Gasification will convert biomass to syngas, which will be combusted for steam generation.


Oil DisplacementFrom 245,000 BD metric tons biomass


386,721 barrels of oil displaced


Strong showing of state support

• State government– Attractive incentive package– Strong governmental support

• Producer organization support– Kansas Farm Bureau– Kansas Wheat Growers association– Kansas Milo Growers association– Kansas Corn Growers association

• Kansas BioAuthority• Kansas Association of Ethanol Processors



Biomass logistics – P&L cornerstone

• Biomass inputs– 50 mile radius of plant site– 65% wheat straw, 20% milo residue, 15% corn stalks– Opportunistically use other residues such as gin

trash, wood chips, etc.– Areas evaluated = ~5% of total available

• 80 to 85% of input needs– Producer harvests and stores material field side– Abengoa collects material as needed

• 15 to 20% of input needs– Producer delivered material to plant site



Biomass economics

• 80 to 85% of material– Contracted at least one year in advance– Crop residue is valued at $10/short ton in the field– Added to the $10/ton

• Custom rates for harvesting• Custom rates for transporting/stacking at field side• Storage fee dependant on amount of time between

harvest and Abengoa collection – to include competitive insurance rate and weather protection

– $10 plus rates above = price paid for biomass at field side

• 15 to 20% of material– Spot market pricing



Biomass economicsWhat $10/ton means to biomass producers

• Of the $10/ton, between $3 to $4 needs to be returned to the soil for nutrient loss– Producer net will be $6 to $7 per ton

• Wheat @ 1 ton/acre net = $6 to $7 per acre• Corn/milo @ 2.4 ton/acre net = $14.4 to $16.8 per

acre• Switchgrass @ 5 ton/acre net = $30 to $42 per acre

• Many Kansas producers live on $25 per acre profit



Wheat versus corn/milo residue and switchgrass

Operation Per/ Per Ton Per/ Per Ton Per/ Per Ton

Mow/Swath $0.00 $9.85/acre $4.10 $9.85/acre $1.97

Baleing $11.50/bale $23.00 $13.00/bale* $25.30 $11.50/bale $23.00

Haul to Storage $4.75 $4.75 $4.75

Total $27.75 $34.15 $29.72

Delta to Wheat $6.40 $1.97Delta value for 300K tons

$1,920,000 $ 591,000

*Estimate 10% higher baling costs for corn/milo residue due to dirt/increase machinery wear

Comparison of select variable costs based on 2004 Kansas Custom RatesWheat, 1 ton/A Corn/Milo Residue, 2.4 ton/A Switchgrass, 5 ton/A


Needs to make cellulosic ethanol cost effective/competitive with grain ethanol

• Process– Cost effective enzymes– Pentose to ethanol

organism (s)– Fractionation process– Plant design and

operational learning curve

• Feedstock– High density balers– One-pass harvesting

systems– Storage infrastructure

and systems to maintain quality

– Improved genetics of feedstock varieties

– Energy efficient harvesting systems

– Transportation infrastructure and biomass friendly regulations


www.abengoabioenergy.com

Abengoa Bioenergy

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ABENGOA BIOENERGY ABENGOA BIOENERGY R&D Biomass derived energy Southwest KS Project Kansas Renewable Energy Conference September 25-26, 2007 Topeka KS