DTE Marietta: Solvay CHP Project Marietta, Ohio. May 2017

Transcription

1 DTE Marietta: Solvay CHP Project Marietta, Ohio May 2017

2 Solvay Specialty Polymers USA, LLC Company Overview Global leader in production of: Plumbing SULFONE POLYMERS Kidney Dialysis Filter Media Water Filtration Media Aviation Cell Phone Components Medical 2

3 Solvay Specialty Polymers USA, LLC Marietta, OH Site Information 309 full-time employees 24/7 operation Former UC industrial complex Process heating steam/hot oil Lost steam supply in 2010 (AMP Ohio Gorsuch Plant) Electricity supply reliability issues Two polymers units both continue to expand strong customer demand Marietta, OH 3

4 DTE Energy Company Overview Power & Industrial Headquarters 414 South Main St. Ann Arbor, MI DTE Energy Key Facts DTE Energy Co. (NYSE: DTE) is a diversified energy company involved in the development and management of energy-related businesses and services nationwide. Revenue $10.3 Billion Net Income $863 Million Assets $29 Billion Credit Rating BBB Employees 10,000 Power & Industrial Key Facts The Power & Industrial group is a leading developer of energy-related projects in North America for energy-intensive industrial, commercial and institutional customers. Revenue $2.2 Billion Net Income $95 Million Assets $0.9 Billion Employees ~700 U.S. Presence 66 Projects in 17 States 4

5 Power and Industrial Business DTE P&I Project Sites Providing fully integrated, comprehensive energy solutions 5

6 DTE P&I Third Party On-Site Energy Value Proposition On-Site Energy projects create value for customers by: Reducing operating and maintenance costs by operating utility systems efficiently and reliably Reducing labor costs Reducing fuel costs through fuel switching or efficiency gains Reducing retail power costs through self generation or efficiency improvement Reducing or eliminating capital spend on existing infrastructure Improving emissions footprint associated with utility systems Offering commodity management services to manage fuel purchases and energy purchases/sales Allowing customers to focus on their core business [Applicable to Solvay / DTE Marietta project] 6

7 Facility Development Approach Solvay drivers for CHP Reasons for CHP control of energy reliability, reduction of energy costs Reasons for third party focus on core business, eliminate capital spend on utilities Solvay initial development activities RFP process initial screen, phone interviews, short list, selection Technical solution collaboration with DTEES Commercial structure third party DBOOM, open-book design/procurement Partner with AEP to explore opportunities Solvay/DTEES development activities Site selection interconnections, elevation, access, public roadways Risk allocation EPC, operations, performance, commodity Utility interconnections natural gas, electricity, city water Regulatory issues air permitting, regulated utility triggers EPC activities Contractor selection Schedule considerations with Solvay process and temporary boiler operations Start-up / transition to operations 7

8 Power (kw) MMBtu/hr Steam Usage (lb/hr) Sizing the CHP Solution Steam and power requirements Power Required and Power Supplied 200 Natural Gas Required and Steam Supplied Purchased from AEP Purchased from DTEES Gas Turbine NG Usage Duct Burner NG Usage Steam Demand Other sizing considerations: Redundancy Size to thermal, size to electrical, import/export thermal, import/export electrical 8

9 Facility Combined Heat and Power Configuration Power to Solvay Natural Gas 80kpph boiler 80kpph boiler Air Duct Burner HRSG 8MW Gas Turbine Deaerator & Feedwater Solvay Water Treatment Make-up Water Condensate Return Solar Taurus 70 GT 150 k-lb/hr HRSG 2 x 80 k-lb/hr package boilers Water treatment Black start generation 1.75 miles of interconnects 9

10 CHP Development Schedule Request for Proposal Qualifications Selection Air Permit App Construction Proposed COD 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 Request for Proposal Qualifications Selection Site #1 Air Permit App Site #2 Air Permit App Actual Site #3 Air Permit App Raise Site Construction SCOD FCOD 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 Brady Hoke s First Game London Olympics Sochi Olympics Brady Hoke s Last Game 10

11 Be ready for development challenges #2 Americas Styrenics Energizer #1 Eramet D A Solvay C E #3 Actual Final Location B AMP Ohio 11

12 Facility Construction Progress Groundbreaking on May 14, 2014 Construction Site on June 3, 2014 Offloading HRSG on June 6,

13 Facility Construction Progress Back-up boilers on June 17, 2014 Project sign on July 9, 2014 Gas turbine on July 10,

14 Facility Construction Progress Building steel on July 29, 2014 Rack supports on August 14, 2014 Building on October 2,

15 What does CHP mean to Solvay and DTE P&I today? Solvay Estimated ~$6MM utility savings over life of supply agreement varies with markets Enlisted assistance from AEP in 2013 Energy Efficiency Program Significant incentives helped with overall plant/project justification Utilities largely provide by CHP 100% of Solvay steam and 97% of Solvay electrical requirements provided by CHP Continue to provide steam to Americas Styrenics Platform to evaluate new opportunities including efficiency improvements, expansion, additional systems DTE P&I $35 million installation over 18 months 10 full-time O&M jobs, 100+ construction jobs 20-yr supply agreement (CHP property leased to DTE Marietta) Coordination committee (w/ Solvay for key O&M decisions) Similar DTE P&I facilities: Cincinnati, OH industrial complex CHP Ashtabula, OH industrial complex CHP New regional CHP opportunities in OH, WV, MI, and KY 15

16 Characteristics of a Successful Third Party CHP Project Experienced team Collaboration of parties Transparency of costs, as necessary Aligning interests of parties COD on February 1, 2015 DTE Marietta constructed, owns, and operates a natural gasfired cogeneration system to supply steam and electricity to Solvay Specialty Polymers USA in Marietta, OH under a longterm energy services agreement. Life cycle perspective Risk analysis and allocation 16

17 CHP Project Considerations 1. Drivers for outsourcing modernizing infrastructure, right-sizing infrastructure, fuel switch, conservation of internal resources 2. Counterparty details rated entity, creditworthiness 3. Term expectation minimum/maximum 4. Commercial operation date expectation drivers, absolute deadline 5. Decision process/milestones 6. Power requirement voltage and expected MW with as much granularity as possible (hourly, daily, monthly, seasonally, annually, etc.) demand side review 7. Steam requirement pressure, temperature, and expected flow with as much granularity as possible (hourly, daily, monthly, seasonally, annually, etc.) demand side review 8. Condensate return requirement temperature and expected flow with as much granularity as possible (hourly, daily, monthly, seasonally, annually, etc.) demand side review 9. Fuel purchase obligations pass-through actual 10. Land availability greenfield/brownfield 11. Land ownership lease/purchase/site license 17

18 CHP Project Considerations 12. Land condition environment issues, indemnities 13. Current steam/power configuration electric utility, natural gas utility, other fuels, existing equipment 14. Industrial interconnections responsibility install/own/maintain 15. Utility interconnections responsibility natural gas, electric 16. Existing infrastructure/site services available back-up equipment, water treatment, waste water, potable water, fire water, compressed air 17. Capital cost treatment expectation open book, closed book 18. Permit expectations air, water intake, water discharge, separate permits, combined with existing 19. Operations approach labor, routine maintenance, major maintenance, etc. 20. End of term expectation seller own, buyer own, seller purchase at fair market value, remove, abandon in place 21. Termination event expectation Buyer events, Seller events, extended force majeure, change in law, cure periods, termination payments, ownership 22. Incentives federal, state, and local 23. Draft term sheets or pro forma agreements 18

19 Thank You Mike Larson Director, Business Development DTE Energy Services (o) (c)