Smithfield Packing, Co. Tar Heel Biomass Steam Plant

Transcription

1 Smithfield Packing, Co. Tar Heel Biomass Steam Plant

2 Aerial View 90 Million Gallon Effluent Storage Basin 8,500 Head 2-3 Hour Hog Resting Area 1 Million Sq Ft Facility

3 Smithfield Packing Tar Heel Division Employs nearly 5,500 people with an annual payroll of more than $100 million. Makes significant annual contributions to support local government and services in the counties surrounding the plant. One of the largest taxpayers in Bladen County. Currently processes about 33,000 hogs per day.

4 Objectives 100% Compliance 100% of the Time Move beyond compliance to pollution prevention/environmental and ecological systems stewardship. Reduce Smithfield s overall impact on environment. Enhance communication with external sources. Improved community involvement.

5 Methane Gas The wastewater treatment system produces approximately $100,000 per month of renewable energy in the form of methane gas that is used instead of natural gas in the boilers.

6 Methane Gas The Tar Heel Plant captures methane gas that is produced as a byproduct of anaerobic digestion. The Tar Heel Plant has two boilers capable of using this methane as a substitute fuel instead of natural gas or fuel oil. The Tar Heel Plant was the first plant in Smithfield Packing to capture and use methane. Use of methane at the Tar Heel Plant offsets our use of fossil fuels by 15%. The capture and use of methane as a fuel significantly reduces our green house emissions.

7 Methane Utilization Boilers vs. Flare 20,000,000 18,000,000 16,000,000 14,000,000 16,427,624 sfc 12,000,000 10,000,000 8,000,000 6,000,000 13,545,572 Boilers Flared 4,000,000 2,000, ,288, ,303 Jun-09 Apr-09 Feb-09 Dec-08 Oct-08 Aug-08 Jun-08 Apr-08 Feb-08 Dec-07 Oct-07 Aug-07 Jun-07 Month Boilers 2-year monthly average = 13,928,079 sfc Flared 2-year monthly average = 980,157 sfc

8 Existing Tar Heel Steam Plant Eight 20.3 BTU/hr boilers Permitted to burn Natural Gas, Biogas, and Animal Fat. 750 HP each Provides steam to Rendering, Wastewater and Production Areas

9 Biomass Cogeneration Project Summary Wellons Energy Solutions has provided a proposal to design, build, own and operate a biomass cogeneration energy facility for Smithfield s Tar Heel plant. The proposed facility will be owned and operated by Wellons Energy, a division of Wellons Inc., a renewable energy design/build engineering and manufacturing firm based in Vancouver, WA

10 Assumptions Natural gas, when not curtailed, is the primary fossil fuel for steam generation at the Tar Heel facility. Analysis assumes that natural gas will average $7.00 per DT over the next 6 years. Approximately 50,000 pounds per hour of steam is provided by fossil fuel boilers with the remaining steam provided by a methane fired boiler. Smithfield s current cost is approximately $9.28 per 1,000 pounds of steam.

11 With natural gas prices low today, will this continue?

12 Proposal Wellons Energy would design, build, own and operate a 50,000 pph cogeneration facility to be located on property leased from Smithfield Packing Company. Wellons provides all capital, equipment, operating personnel as well as assuming operational and fuel procurement risk while providing a fixed cost contract proposal. All permits, including the construction and operating permit, are held by Wellons and all associated emissions are the responsibility of Wellons Energy.

13 Proposal Smithfield agrees to purchase 80% (average 40,000 pph) of boiler capacity on a yearly basis for 6 year term. Steam Contract discussions targets a weighted average cost of $6.531 per 1,000 pounds. At the conclusion, Smithfield can terminate, renew or purchase equipment. If contract renewed, Smithfield can acquire the equipment at the end of the second term for the sum of $1.00.

14 Value Proposition Assuming a fully allocated cost of $9.280 per 1,000 pounds, proposal provides for $1,079,000 per year in annual savings with no capital investment. Eliminates the volatility of natural gas pricing, which has ranged from $13.00 per DT in 2008 to a recent low of $4.50 per DT in Project eliminates the risk of natural gas curtailment, which is likely to continue to develop as power generation moves away from coal to natural gas.

15 Value Proposition Combustion of biomass is considered Green House Gas (GHG) neutral as the amount of carbon dioxide released during combustion process is equal to the volume released during the natural decaying process of the logging residues. Installation results in an estimated reduction of 27,000 tons of CO2 per the Steam System Assessment Tool, a program developed by the Department of Energy. Project results in the Tar Heel facility utilizing 100% renewable energy for thermal requirements.

16 LaCapra study that shows biomass availability.

17 Fuel availability, as shown below, is readily available and can be structured with a long-term contracts.

18 Diagram of a typical 50,000 pph panel boiler

19 Example of a 40K PPH Panel boiler Installation

20 Questions