THE UNIVERSITY OF IOWA BIOMASS FUEL PROJECT DRAFT V7

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1 THE UNIVERSITY OF IOWA BIOMASS FUEL PROJECT DRAFT V7 Miscanthus x Giganteus Development Plan to Deliver a Sustainable and Renewable BioPower Feedstock Prepared by UI Facilities Management, UI Office of Sustainability, Frazier Barnes & Associates and Repreve Renewables Updated: Dec 9,

2 CONTENTS Page 1. DEFINITIONS 3 2. EXECUTIVE SUMMARY PROJECT OVERVIEW BACKGROUND INFORMATION STATEMENT OF THE PROBLEM PROJECT GOAL PROOF OF PROJECT CO FIRING BIOMASS WHY MISCANTHUS X GIGANTEUS IS A VAILID SOLUTION ASSESMENT OF LAND AVAILABILITY GROWER / LANDOWNER PARTICIPATION CROP ESTABLISHMENT CROP MANAGEMENT AND PRODUCTIVITY CROP RISK MANAGEMENT HARVEST / SUPPLY CHAIN HARVESTING TRANSPORTATION STORAGE PROCESSING / DENSIFICATION SUPPLY STRATEGIES (JIT, HYBRID) PROJECT DEVELOPMENT GENERAL STRUCTURE OF PROJECT BUSINESS RELATIONSHIPS TIMELINE AND KEY MILSTONES PROJECT FINANCIALS CAPITAL REQUIREMENTS OPERATING COSTS PROFORMA INPUT SUMMARY BASE CASE PROFORMA OPTOMISTIC PROFORMA PESSIMISTIC PROFORMA BREAKEVEN PROFORMA RISK / SENSITIVITY ANALYSIS EXIT STRATEGY OUTSIDE CAPITAL OPPORTUNITIES NEEDED RESOURCES

3 1. DEFINITIONS Wiki used as a source for some of the definitions below. Co firing Combustion of two different fuels at the same time in the same boiler furnace. Corn suitability rating (CSR) Is an index procedure developed in Iowa to rate each different kind of soil for its potential row crop productivity. CSR ranges from a high of 100 for soils that have no physical limitations, occur on minimal slopes, and can be continuously row cropped, to as low as 5 for soils with severe limitations for row crops. For more information, see Marginal Lands For purposes of preparing this business plan, marginal lands are defined as those which are currently in corn or bean row crop production, have a slope less than 12%, and a corn suitability rating between 25 and 75. This definition may change and mature as our work progresses. Miscanthus x giganteus (MxG) The Miscanthus genus consists of approximately 15 identified species. These perennial grass species are native to subtropical and tropical regions of Africa and southern Asia. Miscanthus x giganteus is an interspecific hybrid derived from crossing of two distinct Miscanthus species. MxG hybrids were produced from crossing diploid (2n =2x) M. sinensis with tetraploid (2n = 4x) M. saccharaifloris. The results from these crosses derived sterile (3x), non seed producing hybrids, and are propagated by rhizomes. The variety we are proposing to establish at grower locations is Illinois clone Rhizome A rhizome is underground stem tissue that provides adventitious growth for both shoot and root proliferation, and is found in many perennial plant species including grasses. A rhizome provides a means of asexual propagation of clonal material. Rhizomes of varying species are of different sizes and morphologies, and have different growth initiation requirements. Rhizomes are the propagation and source for sterile MxG. MMBtu One million British thermal units (Btu). One Btu is the amount of heat needed to cool or heat one pound of water by one degree Fahrenheit. Perennial plant A plant that lives for more than two years. Ready to burn Solid fuel (biomass, coal, or mixture of both) delivered to the facility fuel receiving equipment in a condition that does not require further processing or conditioning before being placed in the plant fuel handling and fuel feeding equipment. Invasive plants Invasive plants are generally considered those species that are non native where introduction into new environments may potentially cause economic or environmental harm. 3

4 2. EXECUTIVE SUMMARY This plan is designed to produce 25% of the required renewable energy needed to satisfy The University of Iowa s 2020 goal of 40% renewable energy at a price competitive with current fossil fuel supplies. A dedicated energy crop, Miscanthus x giganteus (Miscanthus), will be established on 2,500 acres in Iowa to produce 22,500 tons of sustainable and renewable biopower feedstock to replace a portion of the University s coal supply. To support the development of the project there is a significant amount of marginal agricultural production land in Southeast Iowa. A portion of the marginal land can support dedicated energy crop production without adverse impact to row crop production. This proposed project will help in the fulfillment of The University of Iowa s sustainability promise of a greener energy portfolio while producing numerous economic, environmental, and social benefits to the local economy. BENEFITS Fuel price stability Enhancing fuel supply security and reliability Improving Iowa land and environment Enhancing rural economies The University of Iowa delivers a sustainability solution To meet the renewable target by 2020 the University must displace a portion of energy produced by coal with a renewables solution. Replacing coal with Miscanthus biomass is a natural extension of the oat hull project developed in The oat hull project became commercial in 2003, after two years of development, testing, and permitting and now is responsible for 8 to 13% of the University of Iowa s annual energy portfolio. By growing miscanthus locally, the University has an opportunity to enhance fuel supply security while improving environment and rural economics. Iowa has no coal mines, natural gas, or oil wells; all fossil fuel is imported into the state. To develop the acres and biomass needed for the project, the University has selected Repreve Renewables, a leading Miscanthus production company, to assist in the project s development. The attached plan provides a detailed approach for establishing Miscanthus locally and supplying it to the University at a cost competitive with fossil fuels. Preliminary results show Miscanthus is a valid solution to meeting the project goals and delivering a fossil fuel price competitive biopower feedstock at a price range of $4.20 to $11.47 per MMBtu depending on the product s delivered form. 4

5 3. PROJECT OVERVIEW 3.1 BACKGROUND INFORMATION On October 29, 2010, The University of Iowa president Sally Mason established seven sustainability targets to be met on or before December 31, Target #2 is a commitment to obtain 40% of the University s energy from renewable sources by This is a challenging, game changing vision and promise to the University community, general public, and the State of Iowa. In December 2010, a group of individuals from Iowa Department of Natural Resources (Forestry Bureau, director s office, Conservation, Wildlife Management, and Geographic Information Systems areas), National Resource Conservation Service, United States Department of Agriculture Fish and Wildlife, The University of Iowa Office of Sustainability, and University of Iowa Utilities & Energy Management assembled to discuss how and where we could sustainably procure biomass fuel to replace coal as a more sustainable and renewable feedstock. The biomass fuel would be used to cofire with coal in two solid fuel boilers at the Main Power Plant. This meeting was the beginning of the Biomass Partnership Project, which was formally funded and established by a competitive grant from the Leopold Center for Sustainable Agriculture. Results of this grant demonstrate growing Miscanthus as a dedicated energy crop is viable and should be pursued for some portion of the 2020 renewable energy portfolio. 3.2 STATEMENT OF THE PROBLEM To meet the renewable energy target by 2020, the University must displace a portion of energy produced by coal with a renewables solution. Traditionally, about 50% of the University s annual purchased energy has been generated from coal. The energy produced is thermal heat (steam), which is critical to the University s infrastructure. Steam can be generated by the combustion of solid fuels or natural gas. Natural gas currently supplies 25% of the University s energy needs and would require significant facility upgrades and capital to increase energy supply volumes. Additionally, upgrading the natural gas system provides no assistance in reaching the renewable target goal. The proposed solution replaces coal with solid biomass fuel. This is an extension of the project done to co fire oat hulls with coal. The main Power Plant began burning oat hulls at commercial scale in 2003, after two years of development, testing, and permitting. This renewable energy project is responsible for 8 to 13% of the University of Iowa s total annual energy portfolio (See Table 1 below). While oat hull utilization is likely to increase, new biomass feedstocks are necessary to achieve the 2020 target. Several sources have been and continue to be evaluated. As a result of the Leopold Center for Sustainable Agriculture grant issued in 2010, the project team determined that Miscanthus is a leading candidate for 5

6 further development. The challenge then became how to develop a sufficient supply to displace a portion of coal. Table 1: 2010 baseline energy use profile and 2020 projected energy use as a result of this project Note: US energy information administration projects a 12% coal increase by 2020 on coal assumes a 12% increase on fossil fuel prices. $20/ton Carbon Credit Range: $2.08 $ PROJECT GOAL The overarching goal of this project is to develop a sustainable and renewable biopower feedstock solution that delivers one fourth of The University of Iowa s 2020 renewable energy portfolio target while staying cost competitive with fossil fuels. In addition to supporting the 40% renewable energy 2020 Goal, a number of large impact benefits will accrue: They include: Fuel price stability Enhancing fuel supply security and reliability Improving Iowa land and environment Enhancing rural economies The University of Iowa delivers a sustainability solution Fuel Price Stability There is growing concern in the market regarding future fossil fuel price stability. Total coal consumption is projected to fall by 1.2% in 2015, as retirements of coal power plants rise in response to the implementation of the Mercury and Air Toxics Standards. 1 A reduction in coal consumption directly increases production cost due to a drop in production and supply chain efficiencies. Figure 1 shows future cost of coal at the minemouth. Natural gas has historically shown price volatility risk. Additionally, natural gas demand continues to rise and limited infrastructure is in place to support this increase. Between February and April in 2014, natural gas prices reached $6MMBtu (see figure 2 below). Figure 1: Average annual minemouth coal price by region in the Reference case, Figure 2: US Natural gas prices and storage 6

7 By locally growing a dedicated feedstock supply this project will add stability to the purchased fuel price paid by The University of Iowa. The costs associated with production of perennial dedicated energy crops are not highly dependent on the cost of fossil fuels. Analysis discussed below illustrates how the cost to produce Miscanthus fuel can be competitive with today s fossil fuel costs. Miscanthus production costs are more closely aligned with agricultural growing conditions (e.g. weather and agricultural machinery and labor prices) and also avoid vulnerability to grain commodity price swings and annual input cost inflation. Fuel Supply Security and Reliability Growing biomass for energy will increase the fuel supply security of the University of Iowa through local fuel procurement. All fossil fuels are imported from out of state. There are no active coal mines, natural gas wells, or oil wells in Iowa. Coal is imported from Illinois and Colorado by barge and truck, and seasonal river conditions limit the times when coal can be barged. A supply of locally sourced biomass fuel will serve as a fuel reserve in the local area. Improving Iowa Land and Environment Iowa s economy is largely based on use of land resources for agricultural production. Dedicated energy crops, such as Miscanthus, can be grown in a manner that does not interfere with traditional row crop production. Simultaneously with energy production, perennial energy crop production will provide added benefits to the ecology of Iowa s lands. These benefits include: Iowa surface water quality improves from dramatically reduced nutrient run off from perennial plant fields on marginal land, compared to annual row crop fields on marginal land. Soil carbon sequestration increases when changing marginal land use from row crops to perennial plants. Use of chemical inputs (fertilizer, herbicide, insecticide, nutrients) is significantly less than annual row crop production on marginal land. Soil compaction is reduced with perennial plants because of the reduced need to run machinery over the field. Once a perennial field matures, it is harvested once per year and annual tillage is not necessary. Soil erosion from precipitation and wind is dramatically reduced in fields of perennial plants, compared annual row crop fields. With perennial plants, the field is continuously covered yearlong by a living plant system with accompanying surface litter and below ground root structure. Also, by using Miscanthus as a renewable biopower feedstock replacement to coal, emissions will be lowered significantly, improving the overall environment. A University of Illinois study on environmental benefits of Miscanthus grown as a bio energy feedstock showed a 90% carbon, 87% sulfur dioxide, and 13 pound annual mercury reduction to coal emissions. 2 Enhancing Rural Economies Perhaps the most important achievement resulting from the 40% renewable energy goal will be stimulating a market for sustainable production of solid fuel energy supplies in the local area. The University of Iowa spends millions of dollars annually to procure fossil fuel from out of state, and there are no active coal mines or natural gas wells in Iowa at this time. The internal supply chain in the state of Iowa will benefit from local grower economies through the development of this solid fuel energy source. As a result of this new green jobs will be created, enhancing the rural economy. 7

8 4. PROOF OF PROJECT 4.1 CO FIRING BIOMASS The University of Iowa Main Power Plant has two solid fuel boilers designed to burn coal, and also capable of burning coal and biomass. This process is known as co firing, and has been practiced in one boiler since the oat hull project starting in Each boiler has a maximum heat (fuel) input of about 200 MMBtu per hour. If both boilers operated at maximum capacity for every hour of the year (not practical), there is capacity to burn 3,504,000 MMBtu per year of solid fuel. In the baseline year of 2010, both boilers consumed 2,336,000 MMBtu of solid fuel. This level of utilization calculates to a 67% capacity factor (reasonable for this type facility). The Oakdale Renewable Energy Plant (OREP), located on The University of Iowa Research Park campus, has one biomass boiler capable of a maximum heat input capacity of 27.5 MMBtu per hour and a limit of 7,700 hours per 12 month period. All other engines and boilers at OREP are natural gas fired. Utilizing the OREP biomass boiler at a 60% capacity factor would be equivalent to displacing 5,600 tons of coal. We have been unable to identify any other boiler plant in the United States attempting to co fire biomass as aggressively as our goal requires, in the types of solid fuel boilers we operate. This same situation existed in 2001 when we undertook the challenge to co fire oat hulls and coal in the circulating fluidized bed boiler. During that two year period, we successfully designed, built, tested, and permitted a system capable of co firing 80% oat hulls and 20% coal by heat input. Since 2003, the system routinely operates at 50% heat input from oat hulls, depending on fuel availability. The unique and innovative experience gained from the oat hull project provides a successful foundation for the larger goal of 40% renewable energy. 4.2 WHY MISCANTHUS X GIGANTEUS IS A VAILID SOLUTION Since 2010, when the 2020 goals were announced, we have investigated numerous sources of renewable solid fuels that can be burned with coal (co fired); they include dedicated energy crops, short rotation woody crops, timber (forest) stand improvement, and industrial byproducts (e.g. oat hulls and paper sludge). Miscanthus x giganteus (Miscanthus) emerged as a highly desirable source of renewable energy, worthy of further development. Table 2 below compares various bioenergy feedstock compositional content and energy value. 8

9 Table 2: Composition and Energy Comparison of Bioenergy Feedstocks (Note: Hardwood, poplar, pine and willow yield is a time of harvest and not annual yield) Compositon Energy Advantages US Yeild (DT) Moisture % Ash % Lignin % Energy Value (BTU/lb) Calorific Value (GJ) Acres required to Produce MW Crop Rotation Harvest Interval YR Nitrogen Fertilizer n% US Adaptation Miscanthus SE, MW, NE lbs/dt 0.50% Switchgrass ,391 SE, MW, NE lbs/dt 0.90% Big Blue Steam ,325 SE, MW, NE lbs/dt 0.80% Hardwood ,367 NE, SE, PNW Poplar ,980 NE, MW, PNW Pine ,930 SE Williow ,983 NE Corn Stover ,850 MV % Wheat Straw ,517 SE, MW Project Presentation 1000 Btu/lb = 2.33 GJ/tonne NE = North East, SE = Southeast, MW = Midwest, PNW = Pacific Northwest, SW = Southwest Miscanthus is a warm season, perennial C4 grass plant, and thus expresses greater photosynthetic efficiency and lower water use requirements than other plant species that utilize C3 carbon fixation. It has very low nutritional requirements it has high nitrogen use efficiency, and therefore is capable of growing well on marginal soils without the aid of heavy fertilization. 3 Miscanthus x giganteus is a sterile hybrid and therefore propagates vegetatively underground through its rhizomes. Additionally, as a perennial energy crop, Miscanthus can provide a solid foundation for sustainability with performance that is equal to or improved over that of annual crops. 4 To be a truly sustainable feedstock, Miscanthus must have environmental, economic, and social benefits. Environmental Perennial plants have long been associated with good environmental performance and improved ecosystem health. Without the disturbance of annual soil tillage above ground below ground biomass accumulates. Perennials protect and hold the soil against wind and water erosion while increasing soil quality and organic matter 5. Perennials also improve water quality by reducing nutrient loading. The Iowa Nutrient Reduction Strategy includes planting perennial energy crops as a method to improve Iowa water quality (Executive Summary, Iowa Nutrient Reduction Strategy, at 4 (updated Sept. 14, 2014)). Additionally, an increased proportion of perennials in the landscape are also associated with an increase in biodiversity, as perennials provide habitat for animals and insects 6. Furthermore, perennial crops can increase the quantity and diversity of mineral nutrients available in the soil through carbon sequestration. Economic Miscanthus offers value to the environment and local economy that is difficult to quantify. For example, it is estimated that Iowa loses over $1B annually due soil erosion. Miscanthus reduces soil erosion due to its deep root structure and perennial nature. Other economic benefits include offering growers an improved return above standard row crop production on marginal lands when grown for biopower use. Unlike traditional annual crops that are susceptible to input price inflation, Miscanthus offers lower risk to inflation with a more stable return. Once established in first year, the perennial nature of Miscanthus offers subsequent years of reduced equipment, chemical and labor operation costs because 9

10 it does not have to be re cultivated and planted. Materials and equipment for growing and harvesting Miscanthus are already developed and are used in traditional cropping systems. In comparison to perennial wood alternatives, dry ton yields are accomplished earlier, and sustained after the first and second years from planting. Social Biomass production for energy purposes have been shown to stimulate local economies. Green jobs have been proposed as solutions to the economic and environmental woes of many countries 7. New jobs will be directly created as a result of this project to support the crop growth and supply chain needs. 4.3 ASSESSMENT OF AVAILABLE LANDS The project assumes dedicated energy crops will be grown on marginal lands. Crops grown on marginal lands generally require more inputs (fertilizer, nutrients, tillage, etc.) to produce a yield (bushels per acre) equivalent to crops grown on prime farm land. These Due to the soil characteristics of marginal lands (e.g. soil type and slope) and the resulting increase in required inputs, the net revenue for row crops grown on marginal land is typically less than revenue for crops grown on prime farm land. An estimate of the amount of marginal land within 50 miles of the Muscatine facility was constructed using geographic information system tools and data. The Muscatine facility is the likely location for processing and blending biomass and coal prior to delivery to the Main Power Plant. The team chose a radial distance of 50 miles to limit the maximum expense of biomass transportation to the fuel processing facility. The closer to the Muscatine facility Miscanthus is grown, the lower the cost to produce a blended fuel for co firing at the Main Power Plant. Figure 3 shows plots of Iowa marginal land within 50 miles of Muscatine, Iowa. Plots are classified using different colors for five corn suitability rating (CSR) ranges. Plots of land were identified by using soil survey data from the US Department of Agriculture, Natural Resources Conservation Service, and land use information from CropScape Cropland Data Layer US Department of Agriculture, National Agricultural Statistics Service. Results of the analysis, by county, are contained in Table 3. It is noteworthy to understand all this land is currently in row crop production. The analysis does not include land that may be in pasture, conservation easements, or other programs restricting row crop production. Data required to identify these lands is more difficult to obtain. 10

11 Table 3: Marginal Lands by County Figure 3: Marginal Land Identification 4.4 GROWER / LANDOWNER PARTICIPATION The University has held a number of events starting in 2012 to bring project awareness to the local community. Events include crop education meetings at the University and farm extension offices as well as field day events demonstrating planting and establishment of Miscanthus. Through these events the public has been given an opportunity to voice their concerns with the project and provide feedback on level of interest. To date the University has developed a list of potential growers interested in participating in the project. As part of this plan a range of $200 to $250 per acre per year for marginal land rental has been assumed for growing Miscanthus. As shown in the table below, cash rents for corn and soybeans has been increasing annually, at the rate of about 9% per year. In 2014, Iowa State estimated the average rent per acre at $260. These estimates are based on a survey of 1,674 responses from farmers and landowners in the state. There was a 4% decline in 2014 over 2013 rates, after about a 15 year trend of increasing prices in Iowa, although some of this decline was attributed to lower crop revenues. 8 Research done by Iowa State University indicates that historical cash rents in Iowa from 1987 show an $80 increase in rent for each $1.00 change per bushel of corn. 9 The business plan assumes a lower price of $200 per acre because the land being rented will be considered marginal. This $200 per acre figure is an average across the state. Since only marginal land is being targeted for this study, and marginal land is unsuitable for corn or soybean production, it has been determined that $200 per acre a reasonable estimate. 11

12 Table 4: Typical Cash Rents Corn/Soybeans (2014) District 1 $ 188 $ 224 $ 267 $ 283 $ 270 District 2 $ 191 $ 220 $ 277 $ 294 $ 270 District 3 $ 192 $ 223 $ 266 $ 281 $ 277 District 4 $ 195 $ 227 $ 279 $ 294 $ 288 District 5 $ 195 $ 226 $ 275 $ 297 $ 284 District 6 $ 196 $ 219 $ 252 $ 284 $ 273 District 7 $ 176 $ 213 $ 246 $ 257 $ 249 District 8 $ 151 $ 177 $ 193 $ 210 $ 202 District 9 $ 169 $ 198 $ 217 $ 229 $ 229 Average $ 184 $ 214 $ 252 $ 270 $ CROP ESTABLISHMENT ESTABLISHMENT IS THE MOST IMPORTANT EARLY FACTOR TO THE PROJECT S SUCCESS. Establishment cost is a significant portion of the project s finances and production farms must be properly established to ensure biomass production potential (crop yield) is met. It is recommended to work with a company that has demonstrated a proven commercial planting system for Miscanthus establishment. The University engaged industry leaders to evaluate systems for potential use. In 2013 and 2014 the University contracted separate Miscanthus production companies to perform commercial planting demonstration within the project area. Through that evaluation process the system demonstrated by Repreve Renewables showed a high level of success. It is recommended for the project that Repreve Renewables system is used as the method for establishment. Figure 4: Repreve Renewables propagation system ACCU Yield System ACCU Lifter ACCU Processor ACCU Drop Planter 12

13 To meet the University s goal of 2500 acres established by 2016, it will be important to develop a project source nursery farm in close proximity to the project areas. Repreve Renewables has selected a location in North Arkansas that offers improved climate condition suitable for nursery stock digging, and will pursue establishing in spring of 2015 to grow the required rhizome material for the project. The nursery farm will include both Illinois and Mississippi State clones. Miscanthus x giganteus sterile hybrids are under project consideration. Once nursery farm is established the project can proceed with production farm establishment. Production farm field preparation must be properly planned to ensure optimal planting dates are met. Like other agricultural crops, timing can impact production. It is recommended as part of this project to establish the crop only during optimal conditions. Tillage and fine cultivation is required prior to planting. This is somewhat unique to Iowa operations currently practicing no till. Although tillage is required prior to planting, the crop maintains a deep root structure that significantly reduces soil erosion and is sustained in subsequent years after planting. High planting rates should also be considered for establishment. Past research on Miscanthus has shown a planting rate of 4840 rhizomes per acre planted on 36 inch by 36 inch spacing. It is recommended that additional rhizome material is used to ensure high propagation rates which in turn provides and denser plant population needed during establishment year. Figure 4 below demonstrates how a higher population planting rate can improve percent of establishment. Figure 5: Establishment density INDUSTRY STANDARD Spacing: 36 x 36 Target PPA: 4840 Actual PPA: 1936 Planted date: April 2010 Stand age: 1 yr (April 2011) ACCU Yield SYSTEM Spacing: 18 x 24 Target PPA: Actual PPA: Planted date: March 2013 Stand age: 4 months (July 2013) The results from the higher planted population promotes a faster stand growth with minimal to no skips, and plant canopy is realized earlier in the season. The effect significantly improves weed control, minimizes erosion, and improves water use efficiency in the field. 4.6 CROP MANAGEMENT AND PRODUCTIVITY It is recommended that Best Management Practices (BMPs) are developed for the project to ensure successful establishment, and productive plant growth. Risk management protocols for crop health and optimum yield potential will be implemented for the life of the plantation. Protocols outlined by Repreve Renewables include: land preparation, nutrient needs based on soil type, in season monitoring and technical service consultation. 13

14 Miscanthus is a very efficient crop that can be grown on a wide range of soil types. One advantage over annual crops is its ability to remobilize (sequester) nutrients from above ground to below ground as it goes into winter dormancy. These stored nutrients are then re mobilized (translocated) to growing tissue in the spring, thereby reducing the need for fertilizers. The amount of nutrient cycling is dependent on annual trends and harvest time including nutrient availability at the onset of the crop, and nutrient management throughout the life of the crop. Samples are to be taking each year during harvest period to determine the required fertilizers needed for the following year. Past results from nutrient studies have shown 5 to 9 lbs. of Nitrogen and Potassium; and 1.5 pounds of Phosphorus are typically needed for every Dry Ton removed. The plan assumes these fertility rates. Pest and disease pressure should also be monitored throughout the project to ensure maximum production potential. University of Illinois research has shown some emergence of Western Corn Rootworm presence in Miscanthus fields. Routine monitoring practices will provide early awareness of potential impacts to the crop. Pesticide and Herbicide products approved for commercial use are limited. It is recommend as part of the development phase of the project to pursue additional product use approvals. This is achieved by working with state weed scientists and acquiring Federal Use or Local Temporary Use labels for special projects and in coordination with product registrants. PRODUCTIVITY Overall, studies show that the range of harvestable Miscanthus yields is between 5 and 55 Mg ha 1 (2 to 22 DT/ac), making it one of, if not the most, productive land plants in temperate climates. 9 Yield trials of Miscanthus in three locations in Illinois (378450N N) demonstrated some of the highest productivity on record, with average harvestable yields of 30 Mg ha 1 without irrigation and only 25 kg ha 1 of N fertilizer applied in one season. 10 Such high yields, 2 4 times those of the regionally adapted Cave In Rock switchgrass, even under a low input management scheme, promoted considerable interest in Miscanthus in the US. Miscanthus trials by US Department of Agriculture, Natural Resource Conservation Service (NRCS) in the Midwest have produced dry matter yields of 10 to 12 dry tons per acre, with some as high as 15 dry tons per acre reported. NRCS also reports Miscanthus is best suited for locations receiving a minimum of 30 inches of annual rainfall. The Iowa City area has an annual average of 37 inches of precipitation per year. First harvest occurs in late winter or early spring, after the second growing season. The first harvest typically produces about one half the dry matter per acre produced in subsequent years. The effect of additional nutrient applications, beyond the establishment year is not clearly understood. There is significant data from Europe demonstrating an economic benefit from application of nitrogen. However, European soils are not as productive as those in southeast Iowa, and the same results may not be true here. Preliminary research has confirmed there is no clear correlation between nutrient application and financially beneficial yield increase in the Midwest. Based on crop modeling and physical data associated with marginal lands, the candidate growing locations in Iowa are expected to have a yield range of 7 to 12 dt/ac

15 Figure 6: The spatial yield patterns (Miscanthus (a), Cave in Rock (b), and Alamo (c)), the temporal yield variance maps (Miscanthus (d), Cavein Rock (e), and Alamo (f)), and the spatial and temporal yield trend maps (Miscanthus (g), Cave in Rock (h), and Alamo (i)) for three energy crops. In the legend of figures g, h and i the HS represents high and stable yield zone, HU high and unstable yield zone, LS low and stable yield zone, and LU low and unstable yield zone 10. (Yang Song) 15

16 Figure 7: Harvestable biomass model for Miscanthus x giganteus derived from Miscanmod, modeling program. Figure 7: Miguez, F. E., Zhu, X., Humphries, S., Bollero, G. a., Long, S. P., A semimechanistic model predicting the growth and production of the bioenergy crop Miscanthus x giganteus: description, parameterization and validation. GCB Bioenergy 1 (4), A base case yield of 9 tons per acre, with a maximum of 12 tons per acre and a minimum of 7 tons per acre, was selected for the IRR sensitivity analysis. These are average estimates, based on literature review, agronomist recommendations, and other information. 4.7 CROP RISK MANAGEMENT Overwintering Survival There has been minimal work conducted in Iowa on the overwintering abilities of Miscanthus. Although research by Clifton Brown and Lewandowski (2000a) identified 3.48C as sufficient to kill rhizomes removed from the field in an artificial freezing test, this temperature is not consistent with the observations in the US, where established Miscanthus has regularly survived soil temperatures below 6 to 8C at a 10 cm depth (E. Heaton, unpublished data). It is important to understand this risk potential and provide sound establishment and management practices to promote crop health prior to winter season. The most sensitive year for overwintering is the establishment year. Therefore, it is imperative that optimum planting dates are met, and that adequate planting depth and plant population are met for solid stand ability and to reduce risk during overwintering. Fire As part of this project it is recommended that the team develop a fire risk management plan to ensure low risk of biomass loss throughout the supply chain. This includes maintaining buffers along production fields near structures and sound practices when harvesting, handling, storing, and processing biomass. 16

17 The team will use guidance from the National Fire Protection Association (NFPA) and OSHA in developing a fire risk management plan. Invasiveness There is some concern Miscanthus may spread beyond the original cultivation boundaries in which it is established. Such a spread would introduce an opportunity for Miscanthus to become invasive, with an accompanying negative impact on the local environment. This project will use sexually sterile variety Miscanthus x giganteus clone that do not produce viable seed. There are two methods by which Miscanthus could become invasive. First, rhizomes may escape the field (e.g. through soil erosion). The rhizomes may be carried by water to another location and establish themselves. Second, rhizomes may escape during transport and delivery. Responsible rhizome providers set strict protocols regarding transport and delivery to planter, and participants in this project will adhere to all applicable protocols. Research conducted at Iowa State, University of Iowa, other institutions, and commercial organizations has not shown any known instances of Miscanthus propagating beyond its intended boundaries, and Miscanthus is not on any US invasive plant list. To proactively address concerns about plant invasive potential associated with dedicated energy crops, we are developing a risk management plan for the project. The plan will be in place for the 2015 planting season and beyond. Specifications for growing dedicated energy crops for the Biomass Fuel Project will require compliance with this plan. Dr. Jacob Barney of Virginia Tech University visited the UI campus January of Dr. Barney is a national expert on control of invasive plants, and has developed dedicated energy crop risk management plans for the states of North Carolina and Virginia. Dr. Barney review the UI best management practices for invasiveness and led a public meeting discussing Miscanthus and invasive plant concerns. Dr. Barney also participated in a dedicated energy crop workshop at the ISU Extension Office at the Johnson County fairgrounds in Iowa City. For more information on invasive potential of energy crops, refer to 2 FINAL LOW RES.pdf?dmc=1&ts= T HARVEST / SUPPLY CHAIN Designing a successful supply chain is essential to the success of the project. Currently, there is limited experience with delivering large volumes of Miscanthus biomass to a bioconversion facility. During the project s development phase it is recommended to identify the ideal supply chain that delivers a high quality product with limited supply risk. The first phase is determining a specification of biomass form that can be utilized at the facility while meeting the University s target price. Once a specification is determined, the most efficient field to facility supply chain can be designed. The following section of the plan provides additional details about supply chain activities. Based on a yield of 9 tons per acre, about 22,500 tons/year of biomass would be generated using the base assumptions in the business plan. Consideration should be given to the potential for higher yields, which will require additional processing and handling of material as well as added storage and transportation capacity. Increasing the yield to 12 tons per acre increases total handling requirements by ~33%. 17

18 4.8.1 HARVESTING Harvest includes mowing, windrowing, and baling or forage chopping equipment for direct cut. A 60 day window is assumed for harvesting all Miscanthus during the spring (March/April) timeframe. Prior to max production harvest strategies and timing of harvest should be tested to determine the optimal method and allowable harvest window. Maximizing the harvest window will reduce storage cost needs. Field conditions are also a concern during a late winter early spring harvest. Equipment type should be based on maximizing the ability to harvest during the proposed season. The plan currently considers forage chopping to be the method of harvest TRANSPORTATION Semi Cost per Loaded Mile: An assumption of $3.50 per loaded mile was assumed. Based on research by ORNL, 13 loaded dual tire tractor/trailers that travel at a speed of 45 mph will average 5.1 miles per gallon, so a 35 mile trip will consume an average 6.9 gallons one way. According to the EIA, the October 27 weekly price of No. 2 diesel was $3.635 per gallon. Thus, a loaded mile would cost (6.9 gallons x $3.635/gal / 35 miles) $0.72 per loaded mile for fuel cost only. This price does not include deadhead miles when the truck is empty. If the transport distance were reduced to 25 miles, the cost per loaded mile would increase to $1.00. Adding in $2.00 per loaded mile for driver salary, vehicle maintenance, etc., would increase the cost to $2.72 to $3.00 per loaded mile; this is still lower than the business plan assumption. Tons per Semi Load The total number of trucks required is dependent on the volume of Miscanthus each truck can hold, and the total volume of Miscanthus produced. The assumption used was 23 tons per truck. The trucks hauling Miscanthus would be classified by ORNL as Class 8 trucks 14, that is, a vehicle capable of hauling 33,001 pounds or more. Class 8 trucks have a maximum payload of 40,000 to 54,000 pounds, or 20 to 27 tons. Twenty three tons is in the middle of the capability of a Class 8 truck STORAGE Storage options include infield or at facility. For this project it is considered that a portion of the material will be stored at the River Trading Company s fuel yard in Muscatine. Storage processes may include unloading, stacking, and de twining. A lift for lifting and stacking bales is required. River Trading Company, Muscatine facility, will provide these storage services as part of the plan. In the event there is limited storage space at the Muscatine facility, in field storage can be used. Bales can be stacked and covered on field edge for future use. In the event harvesting is performed using a forage chopper it is recommended that harvested product be stored in a silage bags. Equipment like a Miller LX1214 Ag Bagger can be used. Bagged Miscanthus has been shown to preserve the quality of the biomass while reducing risk of fire. As part of the development phase of this project we will consider this process in the final design of the supply chain PROCESSING / DENSIFICATION Currently, a technologically compatible product specification has not been determined. It is recommend during the development phase of this project to work with industry experts to determine a specification of product that meets technology requirements while staying within the University s target price per MMBtu. 18

19 Processing and densification reduces the overall material volume by increasing bulk density, but it also creates a consistent product for the coal/biomass fuel blend. This stage includes grinding/pre processing; the actual densification process such as a pellet mill or briquette system; the required drying to meet densification equipment specifications; storage of densified biomass; blending of the biomass with coal; and delivery of the biomass to the University s boilers. Equipment needed at this stage includes densification equipment; conveyors; automated bale handlers; magnets, metal detectors, and sensors to ensure moisture content is within parameters; and possibly a bale shredder. As part of the development phase, the project team should determine a product specification compatible with the technology prior to commercial scale plantings. Once product specification is developed further development will be needed to fully understand capital requirements and development timeline. Additional information about project densification technologies can be found in the Frazier Barnes & Associates Phase 2 report. Table 5 below provides an example of technology types to consider along with capital and production cost estimates. Table 5: Example of densification technology types to consider. Capital and production cost estimates are based on 30,000 tons / year. Economics will defer depending on production volumes and equipment requirements SUPPLY CHAIN SCENARIOS Supply chain scenarios should be designed specifically to meet the facility s needs. The biomass usage rate and product specification are the key components to designing the supply chain that delivers a technologically compatible product at the lowest cost. The project base scenario used to produce the project financials are: 25% scenario 1, 25% scenario 2 and 50% scenario 3 as described below. This combination delivers a 15yr average cost of $7.52/MMbtu to the facility, which includes operating costs only shown in the financial section of the plan. To meet the target price of $5/ Mmbtu, further evaluation of densification technologies and optimal supply chain design will be required. 19

20 Figure 8: Are conceptual diagrams showing the various supply chain scenarios to consider. The projected supply chain scenarios can deliver a cost range of $4.20 to $11.47/MMBtu. See base case inputs section for more detail. Determining the optimal combination mainly depends on the fuel specification for the university boilers. In addition, the complexity of each supply chain scenario must be factored into the selection of the optimal combination. Each of these supply chain scenarios have advantages and challenges to manage. Scenario 1 Advantages This scenario has the lowest delivery cost with minimum number of operations. This scenario provides a to spec product directly harvested from field and delivered to the facility for use. No storage or processing cost is needed., thus no dry matter losses and storage footprint. Scenario 1 Challenges The facility must be able to accept and use the material on time and without any further processing. Strong coordinating is needed between the harvesting operation and the facility. Unexpected weather conditions add a level of risk to on time delivery, facility usage flexibility would be required. Scenario 2 Advantages In Scenario 2, harvested material is directly transported to the university boilers for use. The supply delivery timing is managed by storing the product on the field edge in an agricultural silage bag or AG Bag. The net result is less transportation compared to scenarios 3, 4 and 5. Scenario 2 Challenges The facility must be able to accept and utilize the material without any further processing. In this scenario, storage sites are distributed within the supply radius leading to large number of small storage sites. This makes transportation management challenging. 20

21 Scenario 3 Advantages In this scenario, all harvested Miscanthus is stored at a central location (the storage yard). This streamlines storage and transportation management. The Ag bagging operation takes place at the storage yard. This could lead to increasing the efficiency of the ag bagging operation compared to Scenario 2. Scenario 3 Challenges In Scenario 3, chopped Miscanthus is first transported to the storage yard. Thereafter, it is gradually transported to the university boilers based on the Main Power Plant s weekly/daily demand. Thus, more transportation would be required compared to Scenarios 1 and 2 in which Miscanthus is directly transported to the university. Scenario 4 Advantages The densification of Miscanthus in this scenario has two advantages. First, the densified Miscanthus is a uniform feedstock, which increases the efficiency of both the transportation operation and the handling operation at the university. Fewer trucks would be required to transport densified Miscanthus to the University boilers compared to chopped Miscanthus. Secondly, densified Miscanthus has more consistent quality and lower moisture content. This can result in a more predictable and higher heating value than that of chopped Miscanthus. Similar to scenario 3, all harvested Miscanthus is stored at a central location (the storage yard). This streamlines storage and transportation management. In addition, the ag bagging operation takes place at the storage yard. This could lead to increasing the efficiency of the ag bagging operation compared to Scenario 2. Scenario 4 Challenges The densification process requires new equipment. The capital and operating costs of these pieces of equipment significantly increase. Similar to Scenarios 1 and 3, harvesting operation and transportation operation are coupled in this scenario and would require proper coordination. Scenario 5 Advantages Baling improves the density of the biomass prior to transport lowering the overall cost to transportation. Bales also reduce the amount of storage space required. Scenario 5 Challenges This scenario has the highest number of operations compared to the chopping scenarios. It has the highest delivery cost. Bales also pose a considerable fire risk. The fire risk has been a serious concern when large numbers of bales are stored in a central location. This concern has risen after fire accidents occurred to the stacks of bales in Abengoa and DuPont commercial scale cellulosic ethanol plants. Additionally, Miscanthus is a high yield biomass crop that can pose harvesting and collection challenges with conventional baling equipment. 5. PROJECT DEVELOPMENT 5.1 GENERAL STRUCTURE OF PROJECT BUSINESS RELATIONSHIPS The role of the University will be primarily oversight and monitoring of project performance. Repreve Renewables will act as the agricultural service provider, whose responsibilities include land procurement, holding project land contracts, Miscanthus crop establishment, contracting service companies and providing an onsite project manager. The University s Facilities Management team will be the technology lead, whose responsibilities include coordinating product testing and overseeing product specification development. The procurement of a third party densification technology lead is 21

22 recommended as part of the development phase of the project. Responsibilities will include developing a technologically compatible product specification, providing densified samples for test burns and providing recommendations for technology development. Figure 9: Project organizational structure 22

23 5.2 TIMELINE AND KEY MILESTONES Exhibit A Project Deliverables and Timeline Timeline to Fall Winter Spring Summer Fall Winter Spring Summer Fall Winter Spring Summer Fall Winter Spring Summer Fall Winter Spring Summer Phase 1 Proof of Project Provide feedback on initial review of business plan and identify areas that maybe lacking $15,000 Review University business plan and provide full economic validation and risk analysis $15,000 $30,000 Position project plan with key stakeholders, local, state and federal agencies $2,387 $2,387 Phase 2 Project Development Develop product specification in collaboration with university facility $75,000 $75,000 Identify biomass densification technology type and provide plan for develop ####### ####### ####### Expert review of facility modifications $25,000 $25,000 Identify planting stock (RHZ) source $10,459 $10,459 Establish planting stock (RHZ) nursery farm Establish 100 to 200 additional acres for grower marketing campaign ####### ####### Recruit a technology developer/operators to support the project $50,000 $50,000 $50,000 Design supply chain scenarios that delivers final product specification at desired economics ####### ####### ####### Recruit and establish a local project manager $10,000 Develop grower and service contracts $22,500 Develop best management and stewardship protocols ####### ####### Develop and execute grower/landowner program ####### ####### ####### ####### Engage key stakeholders and agencies about project development ####### ####### Identify web based project management tracking software/system $7,682 Finalize project execution plan and timeline $11,543 Phase 3 Project Execution Execute project plan ####### ####### ####### ####### ####### $4,467 Contract growers/landowners ####### ####### ####### ####### ####### ####### ####### Contract service providers for crop establishment phase $2,817 $2,817 $2,817 $2,817 Establish 1000 acres in 2016 ####### Establish 1300 acres in 2017 ####### Implement web based project management tracking software/system ####### ####### Phase 4 Project Management Grower land payments ####### ####### ####### Manage grower and service contracts and payments ####### ####### ####### ####### ####### ####### ####### ####### $38,750 $38,750 $38,750 $38,750 * Service company payments Lead agronomic efforts for growers ####### ####### ####### ####### ####### ####### ####### ####### ####### ####### ####### ####### Lead stewardship efforts Contract service providers for harvesting, transport and processing activates Manage web based project management tracking software/system Manage supply inventory * Harvest and supply chain activities KEY PROJECT MILESTONES The following milestones will be used as a guide for development and execution of the project 5/2/2014 Performed successful planting demonstration on pilot field 2 10/1/2014 Successfully performed Miscanthus pellet test burn at the University of Iowa Main Power Plant 11/1/2014 Awarded contract to agricultural services vendor Repreve Renewables. 12/10/14 Central Administration project update meeting 4/1/2015 Determine biomass specification that meets the University s objectives 5/1/2015 Plant 100 to 200 acres of Miscanthus for further project demonstration purposes 5/1/2015 Host project event to continue attracting growers. Field day / power plant tour 6/10/2015 Complete densified Miscanthus pellet test burn during spring or summer outage period 6/10/2015 Identify biomass densification technology type and plan for develop 6/10/2015 Central Administration project update meeting 12/31/2015 Award densification technology development and/or facility modifications contract 1/1/2016 Contract landowners/growers for 2016 plantings 5/1/2016 Host project event to continue attracting growers. Field day / power plant tour 5/30/2016 Plant 1000 acres 1/1/2017 Contract landowners/growers for 2017 plantings 23

24 5/30/2017 Have performed first large scale harvest activities 5/30/2017 Plant 1300 acres 5/30/2018 Have performed second large scale harvesting activities 5/30/2019 Begin long term supply activities 5.3 PROJECT FINANCIALS As part of the development of this business plan, Frazier Barnes and Associates (FBA) a leading bioenergy consulting firm, has prepared the following set of proforma scenarios to determine the $MMbtu range delivered to the power facility. Further identification of the densification technology and supply chain design will be required to determine the actual projected fuel cost. Scope of Financial Projections The following financial statements are for the business of establishing Miscanthus acres, harvesting the acres, densification/blending, and transporting densified Miscanthus to the university boilers. Specifically excluded from these financial estimates are the capital costs of the densification equipment. Part 1 of this report provided an overview of densification technologies; additional discussion among stakeholders will be needed to select an appropriate technology for densification. At this time there are too many unknowns to identify the best fit technology for the university. Instead, an annual operating expense is assumed which must be paid to a third party to densify the Miscanthus for this project; this expense is shown on the proforma Preprocessing/Densification CAPITAL REQUIREMENTS These financial projections are for the business of establishing and harvesting Miscanthus. It is assumed that all expenses for the project are operational expenses except for the initial establishment of each acre. The base case assumed $1, per acre for the first year. The schedule of growth is 200 acres in Year 1, 1000 acres in Year 2, and 1300 acres in Year 3. Each of these increases are assumed to be capitalized, as shown below: Year Acres Established Capital Expense Cumulative Acres $339, $1,656, $2,154, Total CapEx $4,142,375 FBA considers all other costs, including Year 2+ crop expenses, to be operational in nature. Depreciation is calculated on initial crop establishment costs only, using the straight line method, using 15 years of depreciation OPERATING COSTS One of the key expenses will be the cost to densify the Miscanthus. In Part 1 of this report, FBA provided estimates for operating costs for different densification technologies. These costs did not include entrepreneurial profit by the densification company, or other overhead charges including depreciation of equipment. Factoring depreciation only, densification operating costs were estimated between $59 to $90 per ton (for briquetting and pelleting, respectively; torrefaction was excluded from this range). 24

25 Factoring in the need to cover business/management operational expenses and taxes (the densification company is assumed to be for profit and thus taxable), FBA estimates a minimum 10% profit would be required by a developer, indicating a price for densification services of $65 to $99 per ton processed. Other Assumptions In addition to the key assumptions for the densification technology itself (capital cost, operating cost), FBA assumed the following: 330 days per year operating time (24 hours/day) Tax free status Inflation rate of 2.4% per year after Year 1. Inflation was applied to all product revenues. It is assumed that all other services will be contracted with the densification developer, or the Agricultural Services Vendor, therefore inflation does not apply to these expenses. Working capital of 60 days for harvesting/supply chain, and establishment costs. Working capital is not capitalized, but rather financed and only interest is paid on the working capital Scenarios Shown in the Addenda are proforma for four Scenarios: Base Case: 25% of the material is delivered just in time; 25% is stored at the farm side and delivered on demand; and 50% is delivered to the storage yard at Muscatine for densification. Optimistic Case: 25% is delivered just in time; and 75% is stored at the farm side and delivered on demand. In this case, there is no need for densification services. Pessimistic Case: This scenario assumes 100% of the Miscanthus will be densified, doubling the volume and densification costs over the base case. Breakeven Case: This case examines what the breakeven price of the delivered Miscanthus would be, given all other assumptions; i.e. what is the price per delivered ton of Miscanthus that would allow a cash flow in year 15 to be $0. The graphs below summarize the cash flows for all four scenarios, and the total operating costs to deliver the Miscanthus, on a $/MMBtu basis. 25

26 The following table summarizes the cost that the delivered Miscanthus must be in order for the project to have a $0 cash flow in Year 15. Summary of Delivered Breakeven Cost Base Case Optimistic Case Pessimistic Case Cost per Ton $ $67.25 $ Cost per mmbtu* $7.52 $4.20 $11.47 * At 8,000 BTU, there are 16 mmbtu per ton Based on this information, the delivered cost of the Miscanthus can be $4.20 to $11.47 per MMBtu delivered to the facility PROFORMA INPUT SUMMARY Ag Service Vendor 10 year Contract = $1,653, to 2024 Fall Winter Spring Summer Fall Winter Spring Summer Fall Winter Spring Summer Fall Winter Spring Summer Fall Winter $44,177 $44,177 $35,425 $37,034 $40,041 $65,972 $87,999 $71,226 $59,755 $62,572 $62,572 $29,781 $29,781 $29,781 $238,250 $238,250 $238,250 $238,250 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $88, $178, $281, $151, thru 2024 $953, Development Budget BIOPOWER FEEDSTOCK SPECIFICATION DEVELOPMENT Develop product specification in collaboration with university facility $150,000 Identify biomass densification technology type and provide plan for develop $50,000 Expert review of facility modifications $25,000 Recruit a technology developer/operators to support the project $150,000 (6/ /2015) TOTAL $375,000 26

27 Capital Requirements for Crop Establishment $339,390(200 acres) $1,656,950 (1000 acres) $2,154,035 (1300 acres) TOTAL.. $4,142,375 (2500 acres) THE UNIVERISTY OF IOWA MISCANTHUS CROP BUDGET OPTIMISTIC BASE PESSIMISTIC YEAR Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 5 10 Yr Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 5 10 Yr Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 5 10 Yr Land Payment , , , , , , Burn Down Field Prep Machinery Disking Fine Cultivation Fertilizer Nitrogen Phosphorous Potassium Lime Spreading Herbicide Insecticide Planting Cost HARVEST & SUPPLY CHAIN TOTAL COST Delivered yield NOTES : Supply Chain Summary Supply Chain Summary Supply Chain Summary 8,000 Btu / lbs assumed 25% Chopped just in time deliveried to facility 25% Chopped just in time delivery to facility 100% Chopped transported to storage, processed and transported to facility 8 lbs / cf Bulk density assumed 75% Chopped stored on field edge, transported to facility for use 25% Chopped stored on field edge, transported to facility for use 4509 CF Trailers assumed 50% Chopped transported to storage, processed and transported to facility Following are four financial proforma scenarios: Base Case: 25% JIT delivery; 25% farm side storage; 50% densification Optimistic Case: 75% JIT delivery; 25% farm side storage Pessimistic Case: 100% densification Breakeven Scenario: Delivered cost of miscanthus is changed until cash flow is $0 in Year 15 Note: These statements have not been audited BASE CASE PROFORMA (25% JIT delivery; 25% farm side storage; 50% densification) 27

28 5.3.5 OPTIMISTIC PROFORMA (75% JIT delivery; 25% farm side storage) 28

29 5.3.6 PESSIMISTIC PROFORMA (100% densification) 29

30 30

31 5.3.7 BREAKEVEN PROFORMA AT $86.28/MMBTU 31