Economics CAFI II Stage Gate Review Denver, CO May 1, 2007 Tim Eggeman* - Neoterics International Richard Elander - National Renewable Energy Laboratory.

EconomicsCAFI II Stage Gate Review

Denver, COMay 1, 2007

Tim Eggeman* - Neoterics InternationalRichard Elander - National Renewable Energy Laboratory

NEOTERICS INTERNATIONALUsing Technology to Create Business Innovation

2

Boiler+

Generator

Block Flow

Hydrolysis+

Fermentation

FeedHandling RecoveryPretreatmentStover

Syrup +Solids

Chemicals Water

Enzymes CO2 Water

EtOH

Steam

Power

3

Aspen Plus – GUI w/ Hierarchy

4

Aspen Plus – GUI w/ Hierarchy

5

Current vs. Goal Cases

• Current: Laboratory Performance– Pretreatment– Conditioning– Enzymatic Hydrolysis– Fermentation

• Goal: Likely Performance of Above Steps at Commercial Scale

6

Solicit Guidance from CAFI Advisory Board

• Enzymes– Loading– Type– Cost basis

• Fermentation– Conditioning– Concentration

basis– Scale up of lab

data

• Pretreatment Configuration– Reactor cost– Chemical

recovery– Consistent

basis for improvements

7

CAFI 2 vs. CAFI 1

• Poplar vs. Stover

• Improved Definition and Consistency of Modeling Assumptions

• Improved/Tailored Enzyme Cocktails

• Conditioning & Fermentability Tests

8

Economic ModelingCapital Costs

Fixed - Direct Purchased Equipment Installation - Indirect - Contingency - Start-up

Working

Revenues

Ethanol SalesElectricity Sales

Operating Costs

Variable – Stover Enzymes Other

Fixed - Labor Maintenance Insurance Depreciation

Discounted Cash Flow

2.5 yr Construction, 0.5 yr Start-up 20 yr Operation100% Equity, No Subsidy

Rational EtOH Pricing Rather Than Market Pricing10% Real After Tax Discount Rate

Performance Measures

Total Fixed Capital Per Annual Gallon of CapacityPlant Level Cash Costs

Minimum Ethanol Selling Price (MESP)

9

MESP, $/gal

Stover PoplarCurrent Goal Current Goal

Ideal Pretreatment 1.49 0.81 1.42 0.77

Acidic

Neutral pH

Alkaline

No Pretreatment 12.86 7.84 36.73 19.63

Results (Interim)

10

Fixed Capital

Water Treatment$1.3MM

Storage$1.9MM

Steam & Power$39.1MM

Other Utilities$4.5MMOther OSBL

$4.9MM

Feed Handling$7.5MM

Fermentation$9.5MM

Recovery$22.6MM

Start-Up$13.5MM

Project Contingency$2.7MM

Home Office &Construction Fee

$22.9MM

Field Expenses$18.3MM

Total Fixed Direct Fixed

$MMDirects 91.3Indirects 57.4Total 148.7

Stover Goal, Ideal Pretreatment

11

Cash Costs and MESP

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Ideal Acidic Neutral Alkaline No Pretreatment

Net Feed Other Variable Fixed w/o Depreciation Depreciation Income Tax Return on Capital

Stover Current Cases, Proof Year: 4th Year of Operation$/gal EtOH

MESP

CashCostPlantLevel

12

Conclusions

• Consistent Protocols and Materials

• Improved Methodology vs. CAFI I

• Yield Drives Economics

13

Acknowledgements• US Department of Energy Office of the Biomass

Program, Contract DE-FG36-04GO14017

• The National Renewable Energy Laboratory

• Biomass Refining Consortium for Applied Fundamentals and Innovation (CAFI)

• Natural Resources Canada

• Genencor International

14

Project Institutions

15

0 10 20 30 40 50 60 70 80 90

Softwoods

Hardwoods

Ag Residues

Energy Crops

Total Complex Carbohydrate, wt%

Feedstocks

0 10 20 30 40 50 60 70 80 90

Softwoods

Hardwoods

Ag Residues

Energy Crops

Total Complex Carbohydrate, wt%

CAFI I & IIStover

0 10 20 30 40 50 60 70 80 90

Softwoods

Hardwoods

Ag Residues

Energy Crops

Total Complex Carbohydrate, wt%

CAFI I & IIStover

CAFI IIPoplar

(Both)

16

0 5 10 15 20 25 30 35

Softwoods

Hardwoods

Ag Residues

Energy Crops

Lignin, wt%

0 5 10 15 20 25 30 35

Softwoods

Hardwoods

Ag Residues

Energy Crops

Lignin, wt%

0 5 10 15 20 25 30 35

Softwoods

Hardwoods

Ag Residues

Energy Crops

Lignin, wt%

CAFI IIStover

CAFI IStover

Feedstocks

0 5 10 15 20 25 30 35

Softwoods

Hardwoods

Ag Residues

Energy Crops

Lignin, wt%

CAFI IIStover

CAFI IStover

CAFI IIPoplar

CAFI IIPoplar

(Small Batch)