“Focus on Energy: Using Biomass for Fuel”

Making ethanol work for the world.™

Larry Johnson

Business & Project Development

Collection Handling Storage

“Green Energy” Mandates

State renewable portfolio standard

State renewable portfolio goal

www.dsireusa.org

Solar water heating eligible *† Extra credit for solar or customer-sited renewables

Includes non-renewable alternative resources

WA: 15% by 2020*

CA: 20% by 2010

☼ NV: 25% by 2025*

☼ AZ: 15% by 2025

☼ NM: 20% by 2020 (IOUs)

10% by 2020 (co-ops)

HI: 40% by 2030

☼ Minimum solar or customer-sited requirement

TX: 5,880 MW by 2015

UT: 20% by 2025*

☼ CO: 20% by 2020 (IOUs)

10% by 2020 (co-ops & large munis)*

MT: 15% by 2015

ND: 10% by 2015

SD: 10% by 2015

IA: 105 MW

MN: 25% by 2025(Xcel: 30% by 2020)

☼ MO: 15% by 2021

WI: Varies by utility;

10% by 2015 goal

MI: 10% + 1,100 MW by 2015*

☼ OH: 25% by 2025†

ME: 30% by 2000New RE: 10% by 2017

☼ NH: 23.8% by 2025☼ MA: 15% by

2020+ 1% annual increase(Class I Renewables)RI: 16% by 2020

CT: 23% by 2020

☼ NY: 24% by 2013

☼ NJ: 22.5% by 2021

☼ PA: 18% by 2020†

☼ MD: 20% by 2022

☼ DE: 20% by 2019*

☼ DC: 20% by 2020

VA: 15% by 2025*

☼ NC: 12.5% by 2021 (IOUs)

10% by 2018 (co-ops & munis)

VT: (1) RE meets any increase in retail sales by

2012; (2) 20% RE & CHP by 2017

29 States have an RPS

6 states have goals

KS: 20% by 2020

☼ OR: 25% by 2025 (large utilities)*

5% - 10% by 2025 (smaller utilities)

☼ IL: 25% by 2025

WV: 25% by 2025*†

BioFuels Production and RFS2

Development and consumption of biomass by DONG Energy starting from

1989.

Inbicon’s raw material know-how:DONG Energy’s 100% biomass-fired

power plant.

368MMDT/Y - Forest Products

998MMDY/Y - Agricultural

1,368,000,000 Total Dry Tons Available

Potential for > 100 Billion Gallons of Ethanol

Woody Biomass Designated Energy Crops MSW and Industrial Wastes Crop Residues

Lumber Harvest Residues

Milling Byproducts Tree Plantations Orchard Trimmings Forest Management Urban Green Wastes

Sorghum Sugarcane Miscanthus Switchgrass Poplars/Willows Algae Exotics

Grain Processing Byproducts Industrial Wastes Consumer Wastes Food and Beverage

Byproducts

Wheat and Barley Straw Rice Straw Corn Stover Corn Cobs Bagasse Grasses

Inbicon Biomass Refinery

50MT/hr (20Mgpy)

On-Site

CHP Plant

Steam Power

Multi-fuel (as req’d)Multi-fuel (as req’d)

lignin

Ethanol

C5 Molasses

Straw/Stover/Cob

Power

Steam Existing 100Mgpy

Grain-based Ethanol Facility

Energy Reduction of 50-100%+

1,200 MT/day – 20Mgpy

Baler from Krone capable of pressing 4’X4’X8’ bales weighing about 1300 lbs.

Tarp Covering U.S.

Wheat Straw Storage: Stokervarme, DK

Property (%bdb) Corn Stover

Corn Cobs

ASH CONTENT 8.13% 3.78%

CELLULOSE (C6 sugars) 37.49% 43.50%

HEMI CELLULOSE‐CONTENT (C5 sugars) 26.54% 36.50%

LIGNIN CONTENT 16.74% 11.60%

Higher capital costs Lower operating costs Very clean product Contains all the cobs Reduced volume per acre Less moisture control Compliments farmers’

schedule

Lower capital costs Higher operating costs May contain 10% dirt Contains very few cobs Greater volume per acre More moisture control Requires farmer

scheduling

One Pass Stover Bale with Cobs

One Pass System

200,000 acres @ 2.5 tons/acre 500 farmer contracts @400

acres/farmer Each contract will have

options/variables $15 million in inventory @ $30/ton 250 acres for storage sites

800,000 bales @ 13 pound density 20,000 bales/day in a 40 day

harvest season 555 semi-loads per day @ 36

bales/load 50 balers required @ 100 acres/day

What does the plant need? Cob/stalk ratio

What will the plant accept? Moisture content

What is the pricing formula? Contract specifications

Use GIS analysis and regional crop history

Coordinate radius with road delivery system

Estimate tons harvested per acre Calculate % of total available acres

needed

Defined 25 mile radius of selected plants

Tracking of biomass bales per field

•Feedstock Supply Analysis•Create Procurement Company•Develop Procurement Model•Initiate Procurement Contracts•Define Collection and Storage Logistics•Implement Program

Procurement and delivery contracts Define logistical and timing details Credit-worthy feedstock supplier Financing of procurement company

Staffing - personnel Equipment requirements Deposit on farmer contracts feedstock payment Fuel purchase and storage Regional Storage Sites Insurance

Host plant subsidiary

Farmer owned cooperative

Independent company

Identify and contact growers FCS office (USDA) Host plant customers Grain elevators Farm groups and associations

Local weather reporting system GPS field locations ID and quantify product at harvest

Match harvest with each contract Identify and coordinate storage sites

Federal (BCAP)

State (Economic Development)

Local (TIF – Utilities)

Form a local advisory committee

Identify and contact growers FCS office (USDA) Host plant customers Grain elevators Farm groups and associations

Negotiate harvest schedule with growers

Quality control and land use details

Incentives and penalties Payment guarantees On farm storage where applicable

Full time staffing activities General Mgr. and CFO (1) Office and clerical (1) Acquire and service contracts (3) Scheduling and coordinating harvest (1)

Staff hiring and training (1) Manage harvest crews (1) Equipment maintenance (2) Fuel supply infrastructure (1) Manage feedstock inventories (1)

Part time staffing (harvest) Harvest and collection (~50) Trucking from field to storage (~45)

Manage fuel delivery (1) Collect and coordinate data (~5) Miscellaneous “Gofer” (1)

Identify all growers within a plant radius

Conduct grower informational meetings

Negotiate and sign contracts for delivery

Balers, semis, loaders, stackers, wagons, fuel trucks, choppers, windrowers Purchase Lease Custom Contract

Harvesting: Balers, Tractors, Loaders Trucking: To Plant and Regional Storage

Sites Stacking: Roadside and Regional Storage

Grading and Drainage

Road Access

Zoning and Permitting

Roadside storage Farmer storage Tempering Bale covering Weighing and accounting

Field location and harvest date Bale count, moisture and density Ownership recording and receipt Reconciliation with Contract Storage site destination

Inventory Management Storage specifications Fire Protection Transport from Storage to

Plant Permitting and Zoning Dust Control Feedstock Security

Can it be done?

Absolutely!

Will it happen?

Absolutely!

When will it happen?

When we get technology, government, and financing working together.

Making ethanol work for the world.™