Biofuels - Systems Integrator Perspective Lockheed Martin Helping shape our energy future Stephen Klotz, PhDApril 21, 2011 Copyright © 2011 by Lockheed

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Biofuels - Systems Integrator Perspective

Lockheed Martin Helping shape our energy future

Stephen Klotz, PhDApril 21, 2011

Copyright 2011 by Lockheed Martin Corporation as an unpublished work. All rights reserved.#State of the Commercial Market Renewable Fuels/Energy have a higher initial cost then fossil fuelsIncentives / enabling legislation required initially US Federal Investment Tax Credit (ITC) and grant in lieuFeed-In Tariffs used in Canada, Spain, Germany, Israel, IndiaPending Federal Renewable Portfolio Standard (RPS)Renewable market dominated by Special Purpose Vehicles (SPVs)Limited System Engineering in the marketNeed broad, long-term view and sustainabilityProject financing slow to start Global capital market slow down has not helped Banks have not taken many technology risksBankable company required to wrap projectLong term PPA/FPA required for bank financing

Incentives and Enabling Legislation Requiredfor Renewable Energy Market Growth

#Leadership is Key to Making Market a Reality Why Lockheed Martin inEnergy Generation?Two PerspectivesExperience ManagingLarge ProjectsLM Corporate AlignmentPerspective #1Utility / Bank Market AlignmentPerspective #2Energy SecurityGreen InitiativesCarbon Tax/TradeNew Political AlignmentRPS MandatesNational ImperativesSystems EngineeringRigorSupply Chain ManagementValue-Added Technology DiscriminatorsFinanceableU.S. Based CompanyFaith of ExecutionNational Security ImperativeLM Brand RecognitionProvides Growth Opportunity

#Energy Generation Systems Integration NeedsTechnology R&DSystems Engineering &Program ManagementModeling & SimulationSourcing / ProcurementInformation SystemsProcess Optimization

Tools to Partner with Industry to Deliver Affordable Energy

#Concept and inventionsBench-scale R&DFeasibility EvaluationsScale-up to PilotPilot EPCCommercial Project FeasibilityScale-up to CommercialCommercial EPCStart-up & CommissioningNew Technology Path to CommercializationRequires Technology Developer - Integrator - EPC Team

ConceptPilotDeployValue Chain AnalysisValue Chain Model

Complete feasibility analysis Technology evaluationProcess modelsPerformance analysisTechnical feasibilityProcess data package developmentEconomic evaluationCapital investmentO&MEngineering economic analysisCommercial evaluationSupply, demand, and priceCompetitionSustainability (policy, social, environmental)

Technology DevelopmentTechnical (TRL) advancementPilot development and testingScale-up technology vetting

System IntegrationProject management & controls plansRequirements developmentRequirements validation and verificationTrade studiesProcess optimizationProcess Hazard AnalysisReliability analysis

EngineeringConceptual DesignPreliminary DesignDetailed Design

ProcurementSubcontractor managementSupply chain management

Construction ManagementCost & schedule managementQuality managementSafety management

Commissioning Testing & documentationO&M Spare parts Operator training Operations modeling

#Department of Defense Critical Need for BiofuelsDoD is the Largest Single Purchaser of Fuel in the World$16B+, Purchased through the Defense Energy Support CenterNavy Sail the Green FleetDemonstrate a Green Strike Group by 2012, Sail it by 2016Air Force2011, test and certify all aircraft and systems for 50/50 fuel blendBy 2016, acquire 50% of domestic aviation fuel via alternative fuel blendsMore Fight Less Fuel

#SummaryEnergy and fuel supply are national security issuesRenewable energy is here to stayBiofuels solutions provide clean, renewable power, jobs and economic growthLockheed Martin bringsSystems engineering rigorProven lean production techniquesProgram managementTechnology agnostic approachesAffordabilityFinanceabilityMaking Renewable Energy a Reality Reliable Energy Affordable and Efficient and Safer than Ever!

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