Gasification in the UK how to seize the opportunities. Chris Manson-Whitton Progressive Energy

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1 Gasification in the UK how to seize the opportunities Chris Manson-Whitton Progressive Energy

2 Overview Introduction UK Market opportunity for Gasification UK Energy situation Role for Gasification How to seize the Opportunity Right feedstock Navigate the incentives Learn lesson s from the mistakes of others Where are we now?

across the clean & renewables sector, with a strong emphasis on biomass & waste resources & emergent technology.

3 Progressive Energy Progressive is a clean energy project development company From the development of carbon capture and disposal infrastructure for large scale, fossil fuel power stations and energy intensive industry to a broad slate of smaller projects across the clean & renewables sector, with a strong emphasis on biomass & waste resources & emergent technology. Progressive also undertakes Research and Development Programmes (EU and UK) Advisory Work for Government Technical and Commercial Due Diligence for Investors

4 UK Market Opportunity for Gasification

5 Pressing UK Energy Imperatives Tight power generation capacity Renewable Energy Strategy DECC Oil and Gas data & PEL analysis, OFGEM Gas demand scenarios, NG Winter 2014/15 Outlook

6 Millennia s years Rationale for biomass as an energy source Using biomass displaces the release of carbon from long term storage with short cycle carbon This limits the increase in our current carbon inventory However it is subtle in practice

potential to address the need directly in all sectors In some sectors there are few other options of substantive scale

7 Sectors needing low carbon Solutions Electricity Heat Fuels H-C Chemicals Wind Biomass Solar Tidal/Wave Nuclear Clean Coal Biomass GSHP & Electricity Solar Biomass Decarbonised Electricity Or Hydrogen for some applications Biomass Biomass has the potential to address the need directly in all sectors In some sectors there are few other options of substantive scale Strategically biomass should be directed preferentially to these sectors To maximise biomass use it should be a fossil fuel analogue fungible.

8 Advanced Transformation Technologies Preparation of feedstock Pyrolyse Gasify Hydrolysis AD Bio-Char Biogas Bio-Oil Combust Syngas Upgrade Bio-SNG Synthesis Ferment Liquid HCs Refine Distil Heat and Power Chemicals Transport Fuels

9 The UK recognises value of gasification in its subsidies and support Electricity Heat Fuels Renewables 2017 Obligation 2002 Gasification enabled waste eligibility 2009 Gasification received double incentives 2015 Electricity + Market Reform Gasification supported 2011 Renewable + Heat Incentive 2011 Biogas support includes syngas and SNG 2013 Specific gasification support category Renewable Transport Fuel Incentive Resulted mainly in conventional biofuels Recent demonstration support: Department for Transport Advance Biofuels Competition Launched Dec 2014 Incentivised gasification within its suite of incentives

Gasification UK Commercial opportunity Time and Development Now: Power generation the intermediary prize Higher cycle efficiency than conventional combustion at moderate scale Attracts

10 Gasification UK Commercial opportunity Time and Development Now: Power generation the intermediary prize Higher cycle efficiency than conventional combustion at moderate scale Attracts preferential support treatment Perception benefits Future: Platform for stewarding biogenic carbon molecules Liquid fuels SNG Chemicals Mainly driven by the current UK Incentive Regime..

11 How to seize the Opportunity

12 Components for Successful Projects Market Innovators & deliverers Right Feedstock Right Technology Right Product & Route to Market Exploit Policy Instruments Willing Investors

13 Right Feedstock Selection

Approx Mte pa Waste UK s primary biomass resource 40 30 Biomass MSW 20 10 0 UK Sweden United Kingdom Area: 230,000km 2

14 Approx Mte pa Waste UK s primary biomass resource Biomass MSW UK Sweden United Kingdom Area: 230,000km 2 Population: 60 million Sweden Area: 450,000km 2 Population: 9 million NB: Figures indicative, biomass estimated at 12GJ/te

15 Feedstock: UK perspective Indigenous: ideally waste-derived Factors Waste wood Solid Recovered Fuel Almost certainly not raw municipal waste in the first instance

16 Navigate the Incentive Regime

17 Power, transport fuel & heat commodities Commodity prices are indicative. They vary with time and should reflect the cost of carbon Electricity cost is around 2.5 that of heat given cost of conversion & efficiency Transport fuel is similar value to electricity For renewables, it is the incentives which dominate: The Renewables Obligation (RO), Renewable Transport Fuel Obligation (RTFO), Renewable Heat Incentive (RHI) & Electricity Market Reform (EMR).

18 Biomass incentives to date Incentives aim Recognise underlying fuel cost & conversion efficiency/cost Intended to provide a risk adjusted return for investors Potentially bring forward new, currently higher cost technologies for future benefit Note that currently Gasification includes staged combustion Based on MWe scale facilities. Not include the RHI incentive for heat from gasification. Based on the Renewables Obligation not Electricity Market reform. Assumes 0.5 ROC uplift & no RHI for combustion CHP. SNG being revised

19 Biomass-rich waste fuel incentives Waste derived fuels Waste derived fuels are a key source of biomass The incentives broadly scale with biogenic fraction... Although this isn t the case with combustion of waste Note: Simplification of constantly changing picture refer to latest legislation!

None Bid 80 on renewable Portion Electricity Market Reform Feb 2015 Note: Simplification of constantly changing picture refer to latest legislation!

20 None Bid 80 on renewable Portion Electricity Market Reform Feb 2015 Note: Simplification of constantly changing picture refer to latest legislation! Electricity Market Reform A New regime based on a different structure Originally set to be a smooth transition from the Renewable Obligation However, constrained allocation meant auctions Prices lower than the RO in the first round (Feb 2015), competing directly with offshore wind However - still a substantial incentive

21 /MWhr Delivering CHP with the RHI An important way to deliver renewable heat & power to industry Heat: Incentive Heat: Commodity Electricity: incentive Electricity: Commodity Based on pure biomass Assumes heat export is 50% of power export (ie power driven projects, shown as per MWhr electricity) Note that for gasification with engine, heat export does not reduce power output 0 Gasification <200KWth Gasification <600KWth Gasification >=600kWth Combustion Note: Simplification of constantly changing picture refer to latest legislation! For combustion with steam turbine, heat export erodes power output

22 Gasification in the UK Gasification offers short term and long term carbon and resource utilisation benefits Should be able to exploit available indigenous fuel resources A unique & specific policy support environment for Gasification, albeit in an environment of policy change A industry keen to develop for over a decade

RO Accredited, Operational Gasifiers Based on the RO Register Compare with period Apr 2013 to March 2014 Extrapolate to full year Assumes 50% bio content for

24 RO Accredited, Operational Gasifiers Based on the RO Register Compare with period Apr 2013 to March 2014 Extrapolate to full year Assumes 50% bio content for waste stations Station Number of stations Output (MWhrs) All ( ) ~5,500 ~59,000,000 Gasification (all) 5 16,000 Gasific. % 0.1% 0.03% Very limited...why is that?

Transformation Technology Generation Preparation

quality Defined by Feedstock & Gasifier Established

for large scale, high intensity gasifiers Standard

waste / biomass applications demanding high quality

Established technology at large scale Emergent for

25 Transformation Technology Generation Preparation Gasification Gas cleaning Established, subject to gas quality Defined by Feedstock & Gasifier Established for large scale, high intensity gasifiers Established for large scale, high intensity gasifiers Standard technology, but critical Emergent for smaller scale, waste / biomass applications demanding high quality output Emergent for smaller scale, waste / biomass applications demanding high quality output Synthesis Established technology at large scale Emergent for smaller scale

26 Upstream of the Gasifier, Feedstock

27 Upstream of the Gasifier Successful Projects Design for a particular feedstock Recognise specific feedstocks need specific gasifiers Define a comprehensive fuel specification and stick to it Use experts in fuel processing and handling Research Needs Impacts of fuel composition and morphology on down stream processes. This is Thermo-chemical-mechanical

28 Gasifier

29 Gasifier Successful Projects Understand the phases in gasification processes (drying, devolatilisation, pyrolysis, gasification and combustion) Manage thermal conditions Consider carbon burnout and ash removal mechanisms Well-instrumented pilot plants run consistently & continuously Research Needs Gasifier Thermo-chemicalmechanical understanding Process control approaches Materials and metallurgy

30 Down stream of gasifier

31 Down stream of gasifier Successful Projects Know tar generation is inevitable Exploit chemical engineering to address tars and contaminants Understand effluent pathways Have a mass & energy balance for the system Design for reinstatement Research Needs Enhance understanding of evolution & control of tars Provide analysis of real plants Illuminate unexpected chemical pathways

32 Contaminent mg/nm3 gas Gas Quality Requirements Raw Engine Synthesis Tars Particulate Sulphur Halides

33 Contaminent mg/nm3 gas Contaminent mg/nm3 gas Gas Quality Requirements Raw Engine Synthesis Tars Particulate Sulphur Halides 0 Tars Particulate Sulphur Halides

34 Commercial issues Successful Projects Engage with stakeholders early, especially the regulators Are realistic in their promises, but are driven to succeed Recognise their commercial limitations & partner appropriately Recognise commissioning can be lengthy & needs deep pockets Industry Needs Policy Certainty Appropriate investors

35 Where are we going now? Examples of Operating UK Demonstration Projects with hours on the clock A number of Commercial Gasification Projects under construction based on international demonstrators. Majority of gasification projects are staged combustors Active work on projects which produce more than direct heat or power.

36 Summary Gasification has received special treatment under our support regimes for over a decade For power, currently, this includes staged combustion The UK is also seeking to steward our biomass resource into heat and fuels There has been mixed success over the last decade due to commercial and technical reasons, many of which can be addressed in a well configured project and by translation of sound research into commercial practice. Despite lots of changes in the regime, even today, few other countries provide such preferential revenue support Success requires carefully conceived projects

37 Thank you Dr Chris Manson-Whitton Director, Progressive Energy /

Natural Resources Consumer Emissions to air, water and soil Material Flows & Transformations Raw Material or feedstock Semi-finished Products Finished Products Secondary raw material

39 Natural Resources Consumer Emissions to air, water and soil Material Flows & Transformations Raw Material or feedstock Semi-finished Products Finished Products Secondary raw material Recycled Product Product for re-use Compost Transformation Process Waste for Recovery Recovered Fuel Recovered Energy Discarded Waste Fuel Energy Exploitation Production and Recovery Use Disposal

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