CHP/District Heating Conference & Networking Event, 22nd May 2014 – Prince Philip House, London.

CHP/District Heating Conference & Networking Event, 22nd May 2014 – Prince Philip House, London.

Delivering the Future

Caterpillar

Established 1925 by Benjamin Holt and Daniel Best

Worlds leading manufacturer of Construction and Mining equipment, Diesel and natural Gas engines and industrial Gas turbines.

Turnover: 60 Billion US Dollars (2011) – GBP 37.8 Billion

Profit: 4.9 Billion US Dollars (2011) – GBP 3.1 Billion (8.2%)

Employees: 125,099

Route to Market: Independent Worldwide Dealer Network

Dealer Employees: 127,000

Caterpillar Dealers Worldwide: 188

Finning and Caterpillar

Established 1933 By Earl B Finning

Exclusive Dealer For Caterpillar

Western Canada (Alberta, BC, NW Territories & Yukon), UK & Ireland, Argentina, Chile, Bolivia, Uruguay

Turnover: 5.9 Billion CAN $ (£3.8 Billion Pounds) in 2011 Canada 50%, South America 36%, UK 14%

EBIT: 380 Million CAN $ (244 Million Pounds) in 2011 (6.4%)

Employees: 11,900 of which 5,300 are skilled technicians

World HQ in Vancouver, Canada.

Toronto Stock Exchange FTT.TO

World’s Largest Caterpillar Dealer

If its CAT we sell it and maintain it

Global Locations

Who Are Finning ?

Vancouver

Edmonton

Fort McMurray Santiago

Antofagasta

FinningSouth America

Finning UKand Ireland

FinningCanada

Cannock

Revenue £2.4bn £1.3bn £0.5bn

Finning in the UK and Ireland

Finning (UK) LtdHeadquarters in Cannock23 BranchesAbout 1600 peopleMajor business units:

Equipment Solutions Power Systems Product Support

Turnover about £525m in 2011Businesses: Cat, Diperk, Rollo, Damar Group , Murray Controls

Power Systems

Equipment and Installation Business700 Employees Power & Energy, CPCT Commercial Marine & Offshore Petroleum Pleasure Craft Industrial & EP Retail Diperk, Rollo (Damar, MCS) Turnover GBP 220 Million

£180 Million – New & Used Equipment £40 Million – Parts & Service

International experience – 43 countries Lifecycle support 24/7 operation Manned telemetry Parts logistics

Specialist EPC Contractor

Global Turnkey EPC Solution provider

Infrastructure, Power Generation, Mission Critical, Renewables, Utilities

Green Park Energy Mines Gas – Fully Risk Transferred

Landscape, building, fencing, engines generators, power, connection CAT finance £20m – 12 x 3520, 24 MWe, over 6 sites

Canary Wharf

4 x 3516, 1.8 MWe at 11kV, on acoustics floor cast in place, above directors offices, standby

Thames Water – 1. Biogas CHP 6 MWe 2. Biodiesel

Finning sponsored research student at Brunel into biodiesel. Not as simple as it sounds. 5 x 3516, 8 MWe

Biogas plant currently being fitted with steam boiler for Cambi plant designed and installed by Finning

Silent Valley Landfill and Biogas

Prototype 3520 joint development CAT and Finning

BNHJV Mission Critical

BNHJV Energy Centre

Complete turnkey energy centre 6 x gas engine chps 3516 1.2 MWe

Green Energy and CHP

Southern Water Biogas to power

Process CHP

Natural gas chp for process heat and power – pharmaceuticals – 3516 1.2 MWe

Digester Technology

New food waste digester for Wessex Water, including waste reception, maceration, hammer milling etc

Caterpillar 3408 turbocharged 255 kWe gas engine gasifier for wood chip

Obtained 220 kWe from natural gas engine – 1990

Waste cooking oil derived fuel to power 10 x 1820kWe diesel engines

• CAT 3516BHD diesel sets developed and optimised by Finning for the purpose of running on the bespoke fuel

• EPC by Finning, Gensets by CAT, all works inc civils and M&E by Finning or Finning owned companies, risk transfer for availability and output

• Funded by CAT finance and 7 year O&M BY Finning

Other engine based projects Finning are pursuing with clients

Some of the planed projects in which Finning CPCT is taking full EPC responsibility:

• wood to gas engine power via gasifier

• Waste incl. RDF to gas engine power via pyrolysis

• tallow to power via diesel engine

How To Procure CHP that works (1)

1. Initially use a third party consultant to monitor in detail your plant and to scope out likely size of power plant , fuel, vendor options etc based on detailed monitoring and modelling, a not insignificant task

2. Its then essential to then let each engine or chp supplier to design, spec and quote for the total design – buildings, pipes, civils, electric and the power plant including say any gasifier etc and provide overall wrap

3. Do not involve third parties between you the client and the vendor as this will add unnecessary cost, and provide wriggle room in any subsequent dispute – you want responsibility to rest solely with the vendor – if a third party produces a spec to quote against the vendor may always revert to “ …well your design was wrong….” (and third party designs are often wrong)

How To Procure CHP that works (2)

4. Instead force vendor to accept all liabilities for his design, installation and any subsequent non performance ( loss of output, non-availability, maintenance costs, efficiencies etc)

5. Ask him to provide both a purchase offer and a full EPC funding option ( ie some kind of p/kWh offer) with the possibility of outright purchase at a later date

6. The choice of supplier shuld then be made solely on the fully funded cost of providing heat and power ( ie the p/kWh offer) and therefore in large part on the cost of having the funded offer – NOT merely the cheapest offer.

7. Further the Bank or funder, will perform diligence on the vendor, and secure vendors with a good track record will get low cost of funds and the bank’s own technical experts will also ensure the bid is of the correct standard. This is all revealed by the p/kWh cost.

How to Procure CHP that works (3)

7. You want vendors who are financially secure and who can be held to account for non performance – only these will be able to get funds at reasonable costs and this is inevitably reflected in the p/kWh cost.

8. The above points will ensure that vendors do not cut corners on installation to offer an initially cheaper price (inevitably resulting in a higher lifecycle cost) - vendors know better than any third party advisors what is necessary, and by offering a 10 year guarantee on performance will be forced to design to a correct standard

9. When you have picked the cheapest funded offer, (p/kWh) you may take the buy out if ultimately you prefer to fund it yourself and if necessary after an initial proving run

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