Renewable Fuels Technology Development Company

Torrefaction Thomas P. Causer President, COO Terra Green Energy, LLC tcauser@terragreenenergy.com 814.598.2350 January 13, 2015

Introduction to Terra Green Energy, LLC What is Torrefaction? Characteristics of Torrefied Wood vs. other forms Issues solved by the use of Torrefied Wood Consortium of Advanced Wood-to-Energy Systems (CAWES) Different Supply Chain Models TGE’s Small Scale Commercial Torrefaction Facility International Energy Agency’s Conference on Co-firing Economics of Co-firing with Torrefied Biomass Environmental Benefits of Co-firing with TW Economic Beneficiaries of Co-firing with TW Final Remarks

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Torrefaction Webinar Topics

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Harry Halloran, Jr. Chairman Harvey Golubock, CEO Thomas P. Causer, President, COO

ARB is the majority owner of Terra Green Energy, LLC (TGE). ARB is a private investment firm that invests in environmental opportunities including companies, funds and public-private partnerships in the renewable energy, water, sustainable agriculture and waste to value sectors.

Introduction of TGE Renewable Fuels Technology

Development Company specifically focused on the development of a biomass pre-treatment technology called torrefaction

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Torrefaction is a biomass pre-treatment process where raw, green biomass is subjected to temperatures between 250 deg. C and 300 deg. C in a near oxygen free environment during which time the hemicellulose is volatilized. The resulting solids component has significantly different physical and chemical properties than the original green biomass. During the torrefaction process near 100% of the moisture is eliminated. Yet 90% of the energy content is preserved and 70% of its dry weight mass remains after torrefaction.

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Wood Type

Parameter

Wood Chips

Wood Pellets

Torrefied Pellets

Steam Exploded

Pellets

Charcoal Coal

Moisture Content, (% wt) 30-55 7-10 1-3 0.5-1.5 1-5 10-15

Calorific Value (MJ/kg) 9-12 15-16 20-24 18-20 30-32 23-28

Volatiles (% db) 70-75 70-75 55-65 ?? 10-12 15-30

Fixed Carbon (% db) 20-25 20-25 28-35 ?? 85-87 50-55

Bulk Density (kg/m3) 200-250 550-750 750-850 750-800 200 800-850

Volumetric Energy Density, (GJ/m3)

2.0-3.0 7.5-10.4 15.0-18.7 14.0-16.0 6.0-6.4 18.4-23.8

“Torrefied Biomass is hydrophobic, brittle and easily grind-able ”

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Issues Inhibiting Use: • Low density & bulky volume • Wet, & highly wet-able • Very expensive to grind • Problems feeding • Low Energy Content, per lb • Low Energy Density, per vol. • Bio-reactive

The solution for these Issues: • Much Higher Bulk Density • Dry & Hydrophobic • Easily grind-able • Uniformity allows ease of feeding • High Energy Content, per lb • High Energy Density, per volume • Non Bio-reactive

“Torrefaction can be applied to all types of wood, grasses, and other types of biomass resulting in a uniform, commodity fuel ”

Wood Chips Torrefied Pellets

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“Torrefied wood has significant market potential as a hydrophobic, densified energy carrier that stores, travels, and functions much like coal”

Consortium for Advanced Wood-to-Energy Solutions (CAWES)

The Consortium for Advanced Wood-to- Energy Solutions (CAWES) will assess challenges and knowledge gaps relevant to the advancement of torrefaction technology. With an initial joint investment of $4 million, CAWES partners are embarking on a 24- month work plan aimed at validating torrefied wood as a promising renewable energy market solution.

August, 2014 Announcement

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“Coal-fired utilities in the U.S., which consume nearly 860 million tons per year of coal, could benefit greatly by the adoption of torrefied

wood as a replacement or co-firing material”

America’s forests are a vital natural resource. They cover one-third of the nation’s lands and yet more than one-half of our forests – both public and private – are in decline. These forest conditions are being driven by declining demand for traditional wood-based products, changing climactic conditions, endemic and exotic pests and diseases, and the need for policies that support both cost-effective and environmentally desirable market-based solutions. Loss of one-third of the nation’s solid wood products manufacturing facilities

(sawmills) and more than forty percent of pulp and paper mills (since 1990) Deteriorating forest conditions have led to increasing size, intensity, and

acreage of wild fires that are collectively consuming more than $3 billion in federal tax dollars annually in suppression costs

And billions more in economic and environmental loss as well as loss of human life.

Consortium for Advanced Wood-to- Energy Solutions (CAWES)

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Two Different Supply Chain Models Utilizing Torrefaction

Distributive Model

Centralized Model

“There will be situations where one model is better than the other BUT the Distributive Model offers the most benefit to rural communities by keeping jobs in the local community”

Economy of scale Higher Transportation Cost

Lower Transportation Cost

Lower economy of scale

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Construction of a Small Scale Commercial Torrefaction Process

Decision was made in the fall of 2012 – 1) to demonstrate the technology, 2) to provide large size samples for testing, & 3) to provide a marketing platform

System consists of three (3) thermally integrated subsystems including a rotary drum dryer, biomass combustion unit, and proprietary reactor The system includes all necessary material conveyance systems, multiple hot gas

ductworks, dampers, airlocks, fans, and complete instrumentation to measure and manage the process

Gases emitted from the torrefaction reactor are transferred to the combustion unit

where they are oxidized resulting in thermal energy and low emissions. The combustor provides thermal heat of both the reactor and the pre-drying system

"TGE’s Small Scale Plant can produce 12 tons/day in a continuous flow process”

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TGE’s Torrefaction Process

Dryer

Combustor

Torrefaction Reactor

Raw, green biomass

Torrefied biomass to densification

Typical Operation: • Wood chips moisture content, % wgt 40% - 55% • Torrefied chips moisture content, % wgt 1% - 3% • Torrefied chips yield, % wet basis 40% - 45% • Torrefied chips yield, % dry basis 70% - 75%

“It is currently estimated that a torrefaction facility, including densification, will have a capital cost of approximately $255 times

the tons of annual capacity”

FutureMetrics, July, 2014

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Feedstock sizing enables the processing of low value feedstocks

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The first stage of the TGE torrefaction process is pre-drying the raw, green woody biomass to reduce whatever moisture content it arrives at to between 12% and 15%

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This is the other end of the rotary drum dryer and shows the cyclone separator, ID fan, shaker/screener and metering bin

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The TGE torrefaction process includes a Combustion unit plus heat exchangers, and ductwork

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The heart of the TGE torrefaction system is the Torrefaction Reactor which is based on vertical hearth design. After exiting from the reactor the material is quenched and cooled.

Torrefied and Densified Biomass

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The entire torrefaction system is controlled by an operator in a Computerized Control Room as shown here.

South Africa USA Netherlands Germany Others

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IEA Clean Coal Centre Park House

14 Northfields, London, UK

IEA CLEAN COAL CENTRE 4TH WORKSHOP ON COFIRING BIOMASS WITH COAL was held at the Nittany Lion Inn on Penn State's campus from November 5-6, 2014 Countries Represented included:

Belgium China Chile Canada France Finland

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IEA Conference on Co-firing

– TGE Torrefaction Facility Tour

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IEA Conference on Co-firing

– TGE Torrefaction Facility Tour

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The initial Market envisioned for Torrefied Biomass involved coal fired electrical generation facilities with Pulverized Coal (PC) boilers.

Piloted coal flame (LACER)

Why torrefaction ?

Conversion to wood pellets Atikokan GS

• Conversion September 2014 • 205 MW of capacity • New silos, burners and controls,

modified pulverizers

: From coal to biomass

Conversion to biocoal pellets Thunder Bay GS

$170M conversion cost

• Conversion Winter 2015 • 150 MW of capacity (one unit) • Modified pulverizers

<$5M conversion cost

From the IEA Conference on Co-firing

Les Marshall Ontario Power Generation

Field Tests of Torrefied Wood at Gulf Power’s Plant Scholz

Doug Boylan – Southern Co Keith Roberts – Southern Co Bill Zemo – Alabama Power Jeff Wilson – Southern Co Denym Burlock – Ontario Power Sybelle Fitzgerald – Gulf Power Dave O’Connor - EPRI

• Successfully fired up to 100% TW in a pulverized coal boiler at Plant Scholz

• Set Southern Company record for co-firing renewable energy (26 MW)

• Adding TW reduced unburned carbon losses.

• NOx, SO2, other emissions were greatly reduced with TW

• TW is a relatively easy way to generate large quantities of renewable energy using existing power plants From the IEA Conference on Co-firing

Coal

Coal Miners

Electrical Power Generation Facility

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Today’s Scenario

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This is what tomorrow can look like!

Electrical Power Generation Facility

Coal

Hybrid Willow GreenCoaltm Torrefied Biomass Low value Forestry materials

70% to 90%

10% to 30%

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How much does it Cost to Generate Electrical Power?

$ per MWhr Installed Hydro $4.10

Coal Plant > 35 Yr WITH new emissions controls (600 MW) $36.64

Natural Gas Combined Cycle, $55.41

Nuclear Plant $108.47

Land based Wind, $124.27

Off Shore Wind, $132.04

Solar PV $182.64

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* Source: “Levelized Cost and Levelized Avoided Cost of New Generation Resources in the AEO”, 2014, EIA. April 2014; “Cost and Performance Data for Power Generation Technologies”, Prepared for NREL by Black & Veatch, February, 2012; Analysis by FutureMetrics, Dr. William Strauss, June, 2014 and November, 2014 ** Data Analysis by T. Causer, Terra Green Energy, LLC November, 2014

$ $

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How much does it Cost to Generate Electrical Power?

$ per MWhr Installed Hydro $4.10

Coal Plant > 35 Yr WITH new emissions controls (600 MW) $36.64

Natural Gas Combined Cycle, $55.41

Nuclear Plant $108.47

Land based Wind, $124.27

Off Shore Wind, $132.04

Solar PV $182.64

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* Source: “Levelized Cost and Levelized Avoided Cost of New Generation Resources in the AEO”, 2014, EIA. April 2014; “Cost and Performance Data for Power Generation Technologies”, Prepared for NREL by Black & Veatch, February, 2012; Analysis by FutureMetrics, Dr. William Strauss, June, 2014 and November, 2014 ** Data Analysis by T. Causer, Terra Green Energy, LLC November, 2014

$ $

Coal Plant > 35 yr with new emissions controls (600 MW) + 10% Co-firing (60 MW Renewable energy) $43.56

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How much does it Cost to Generate Electrical Power?

$ per MWhr Installed Hydro $4.10

Coal Plant > 35 Yr WITH new emissions controls (600 MW) $36.64

Natural Gas Combined Cycle, $55.41

Nuclear Plant $108.47

Land based Wind, $124.27

Off Shore Wind, $132.04

Solar PV $182.64

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* Source: “Levelized Cost and Levelized Avoided Cost of New Generation Resources in the AEO”, 2014, EIA. April 2014; “Cost and Performance Data for Power Generation Technologies”, Prepared for NREL by Black & Veatch, February, 2012; Analysis by FutureMetrics, Dr. William Strauss, June, 2014 and November, 2014 ** Data Analysis by T. Causer, Terra Green Energy, LLC November, 2014

$ $

Coal Plant > 35 yr with new emissions controls (600 MW) + 10% Co-firing (60 MW Renewable energy) $43.56

20% Co-firing $48.87

30% Co-firing $54.19

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Environmental Benefits of Co-firing with Torrefied Biomass

Testing in Europe and elsewhere has clearly demonstrated that Co-firing results in lower emissions of: SOx Mercury NOx CO2

“The Synergies of Co-firing have great value to existing Electrical Power Plants”

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The Beneficiaries of Torrefaction & Co-firing!

Benefit to Forestry Landowners, both public and private Benefit to Agricultural landowners of marginal crop lands Benefit to Coal Mine Owners and Miners and their families Benefit to Owners & Employees of Coal Fired Electrical

Generation Facilities Benefit to many Rural Communities across our nation Benefit to local governments with preservation and

enhancement of tax base Major Benefit to our country’s electrical power consumers

Stak

ehol

ders

“Tremendous Value to a wide range of Stakeholders from co-firing torrefied biomass”

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In Conclusion: Co-firing in existing power plants with torrefied biomass is a relatively fast, low cost way to generate very large volumes of renewable, sustainable, carbon neutral electrical power. There is an urgent need to engage all the various stakeholders potentially impacted by the benefits of co-firing. The opportunities are significant and the tent is big! Stakeholders along the entire supply chain should consider becoming engaged in this effort.

Thank You!

How can the NEWBio Consortium facilitate??

TGE is working to identify strategic investors from among the various stakeholders groups who can see the tremendous opportunities offered by co-firing with torrefied biomass!

Thomas P. Causer, TGE 814.598.2350 tcauser@terragreenenergy.com