Reducing GHG Emissions Improving Energy Efficiency Lowering Carbon Intensity. CarbonSaver Overview - NS Clean Energy R&D Forum

Transcription

1 Reducing GHG Emissions Improving Energy Efficiency Lowering Carbon Intensity CarbonSaver Overview - NS Clean Energy R&D Forum May 17, 2012

2 Agenda CarbonSaver Overview AHI CarbonSaver R&D History Scale Process Validation the Beta Phase The Importance of Strategic Partners and Investor Growing and Immediately Addressable Markets (they do not have to be the same!) Next Steps Field Demonstration Critical to Commercialization! 2

3 Value Proposition CarbonSaver offers the lowest (cost/kg) of hydrogen for the distributed scale market. Low cost is driven by carbon black sales. CarbonSaver plants have no direct CO2 emissions. SMR plants produce an estimated 6,000 tonnes/year CarbonSaver plants can operate at full capacity within seconds from start-up. CarbonSaver technology offers the potential for production of hydrogen to volumes of 100,000 kg/day. CarbonSaver Plasma Plant Configuration Natural Gas Hydrogen Power CarbonSaver Plasma Plant Carbon Black Metallurgy & Rubber 2

4 Natural Gas Market Fundamentals Natural Gas Supply and Production Forecasted Natural Gas vs. Oil Prices Distillate Oil Residual Oil 63% Spread Natural Gas Natural gas is abundant due to unconventional gas: bcf/d of the current 59 bcf/d U.S. production and growing. The natural gas/oil price spread will continue as shale production drives new paradigm of supply. Natural Gas Demand Growth Gas Transmission Power Generation Cogeneration Transportation Industrial Processes 3

5 Introduction Past, Present & Future Development Process Bench Unit 5 kw Generator 75 kw Generator $4M $3M $6M CarbonSaver Demo Project (Compressors) $8M Market Entry Carbon Development (Metallurgy and Rubber) H2 for Gas Distribution $4M $3.7M H2 for Power Generation Alpha CarbonSaver Plant in Fredericton, NB Left to right: transformers, reactor systems, Alpha plant with carbon collection system, instrumentation and controls. 4

6 CarbonSaver Demonstration Project (Beta) Partnership Collaborators $3mm Equity 2010 Province of NB $2mm Grant $3mm Loan CarbonSaver Plant ($8mm Project) 2010 Development Timeline Beta System Achievements Phase 1 Phase 2 Phase 3 Laboratory and prototype test July 2008 March 2009 COMPLETED Scale-up, preliminary design and test April March 2010 COMPLETED Detailed plant design, build and operate April November 2011 COMPLETED Tested microwave reactor Tested pilot plant Gained plant operational experience Trained staff in plant operations and maintenance Developed relationships with carbon black offtakers Completed foundry trials AHI carbon black used to make iron castings at Wells Foundry to validate value. Validated remote plant operation and integration with engine control systems. 5

7 AHI Demo Plant

8 Partners, Investors, & Collaborators Vital in Technology Development and Commercialization. Partner Description Size Role Assets include Nova Scotia Power, Brunswick Pipeline, and an interest in Maritimes & Northwest Pipeline North America s largest natural gas producer Integrated oil and gas company One of the largest investor-owned utilities in the world, with operations in the U.K. and U.S. Provide 97% of the generation, transmission and distribution of electricity in Nova Scotia Recently acquired by Birla, and is now the world s largest producer of carbon black. Total Assets: $6.6 billion Total Assets: $34.0 billion Total Assets: $22.1 billion Total Assets: $74.3 billion Installed Capacity: 2,293 MW Total Capacity: 1.2 million tonnes Equity Investor 37% of Voting Shares Financial Sponsor CarbonSaver Demo Project Financial Sponsor CarbonSaver Demo Project Financial Sponsor Gas Distribution Financial Sponsor Power Generation Collaborator Carbon Off-taker Italian engineering firm specializing in natural gas and hydrogen plants with offices in Italy and the UAE Total Assets: $185.0 million Licensee and Collaborator Product Development & Sales 7

9 Market Opportunities 1. Natural Gas for Distributed Electricity production. The shale gas production in North America has resulted in a high supply and low cost availability enabling low production of electricity from the natural gas for industrial use or sale to the grid. 2. Renewable Energy Storage Smart Grid. There is a growing demand for H2 to enable the improvement of Smart Grid implementation to integrate renewal energy technologies into the legacy grids. 3. Remote production of power for local loads, peak shaving and back up power. Pike Research forecasts that demand for hydrogen for fuel cells and internal combustion engines (ICEs) will reach $785 million globally in Remote H2 production for emission reduction in the gas compression industry Natural Gas Demand Growth Gas Transmission Power Generation Cogeneration Transportation Industrial Processes 8

10 Natural Gas to Green Electricity Concept Overview CarbonSaver reforms natural gas to produce H2 and carbon black. The H2 feeds the CLEARgen to produce green electricity for the grid. The carbon black is sold to foundry and/or tire industry. Potential to generate $1.75M/yr Project IRR approx 16-25%. Startup Power Only = 0.4 MW 0.4 MW Green Energy 0.6 MW $750K/yr Natural Gas Well $4 mmbtu 0.4 MW CarbonSaver 1.0 MW Nat. Gas 350 m 3 /h 98% - H 700 m 3 /h To foundry/tires $970K/yr 1080 T/yr Carbon Assumptions: - Electricity sold to $ /kW-h (FIT) - Value of Carbon = $900/tonne Contact : mike.oliver@ah2inc.com 9

11 Smart Grid Renewable Energy Storage System CarbonSaver reforms natural gas to produce H 2 and carbon black. CarbonSaver operates 8 10 hours per day when wind is available. -off peak Power generated during peak demand or continuously. The carbon black is sold to foundry and/or tire industry. Project IRR 10-22%. Depending on pricing and load factor. Green Energy 1 MW $ K/yr 0.4 MW 1.0 MW Natural Gas Well $4 mmbtu 8400 m 3 /d (8 10 hrs/day) Compression 400 m 3 (@250 psig) CarbonSaver H 2 Storage 7000 Nm 3 (10 hrs ) 98% - H 700 m 3 /h To Foundry/Tires $608K/yr 676 T/yr Carbon Assumptions: - Electricity sold to $ /kW-h (FIT) - Value of Carbon = $900/tonne - Potential to generate $1.75 M/yr Contact : mike.oliver@ah2inc.com 10

12 Competitive Landscape for Hydrogen Production Estimated Distributed Hydrogen Production Costs ($/kg) Cost Item SMR Wind Electrolysis CarbonSaver Capital (CapEx) $0.40 $0.96 $0.46 O&M $0.51 $0.73 $1.40 Feedstock $1.72 $5.06 $3.19 Carbon Black Sales ($2.99) Total ($/kg of H2) $2.63 $6.755 $2.06 Assumptions SMR and electrolysis cost estimates come from: drogen.html. Assumptions from EIA are that plants have a capacity of 1,500 kg/day, plant life of 20 years, capacity factor of 70%, gas price of $11 USD per MMBtu, and electricity price of 9.5 cents US per kwh. Microwave Generator Power Efficiency: 0.6 kwh/scm H2 CarbonSaver Hydrogen Purity: 98% PSA unit included in CarbonSaver plant cost to achieve 99.9 hydrogen purity. Carbon Yield: 490 grams/scm of natural gas Price of AHI Carbon $1,000 USD tonne. 11

13 Compressor Engine Abatement System

14 Value of H2 Blend for Natural Gas CarbonSaver dissociates CH 4 into carbon (C) and hydrogen (H 2 ) without generating CO 2. CH 4 C + 2H 2 (est. energy requirement is ~ 5.7 kw/mcf or 200 W/scm). 5% to 15% hydrogen is optimal for efficiency gains and emissions reductions. Reduces NOx by extending the lean limits of combustion while maintaining stable operation. Reduces CO and HC by improving combustion and decreasing misfires. Reduces CO 2 by capturing and reforming it to create energy and improving engine efficiency. Stringent EPA and state targets for efficiency and emissions are achievable. - 1 g-bhp NOx for large engines and 2 ppm NOx for turbines. Emissions Reductions from Reciprocating Engines Efficiency Gains for Reciprocating Engines Change in Emissions 0% 10% CO 2 20% CO 30% 6% - 8% 40% 50% 60% nm-hc 70% 80% NOx 0% 10% 20% 0% * Summary experimentalstudy 10% ENEA (Feb 20% ) Hydrogen-Enriched Natural Gas Hydrogen-Enriched Natural Gas 30% 20% 10% 0% -10% -20% -30% -40% 13 Change in Efficiency 13

15 Example - Interstate Pipeline Compressor Systems New clean air regulations have a major impact on existing and new compressor stations. Operators are expected to reduce NOx, CO and CO 2 using BACT Best Available Control Technology AHI is targeting compressor stations located in the U.S. Gulf Coast and Northeast. - Market includes high speed 4 stroke, legacy two-stroke engines, then moving to turbines. CarbonSaver is the only multi-purpose control technology to reduce NOx, CO and CO 2 emissions and improve efficiency for large legacy engines. - More than 2,000 large legacy engines by 3 manufacturers provide 20% of the total HP on the system. Mainline Compressor Stations Common Large Legacy Engines Make Units Total HP Ave HP Clark 718 1,371,175 1,910 Ingersoll-Rand ,823 1,413 Cooper-Bessemer 846 1,350,938 1,597 2,075 3,443,936 1,660 Total System HP 16,880,345 14

16 Carbon from Natural Gas CarbonSaver TM produces high-quality carbon from natural gas, not oil and petroleum coke Ultra low sulphur and nitrogen No CO 2 in the carbon production process vs. 3 to 5 tonnes of CO 2 for 1 tonne of carbon from oil Potential to reduce the cost of production Equivalent cost today: $80 oil and $6 natural gas Projections for : 20% to 40% cost advantage Global Carbon for Iron Casting Annual Sales: $3B Production: 2.5MMT Global Carbon Black for Rubber Annual Sales: $5B Production: 7MMT Metallurgical Carbon for Iron Casting 10 to 12 kg of carbon for 500 kg of iron Current production methods have high GHG co-production ~50% premium pricing to carbon black for rubber Metallurgy: $750/t to $1,500/t Carbon black: $600/t to $900/t World Market For Carbon for Iron Casting China India 10% Rest of World China 36% Rest of North World America 27% North America and Western Europe North America 13% 750,000 tonnes per year Higher quality than rest of world Western Many users/few suppliers Liquids Europe 5% 16% 2,200 foundries in the U.S. and Canada Other 1% 15

17 Summary CarbonSaver R&D Journey Build a good team that can anticipate and manage change. CarbonSaver transitioned from abatement technology to low cost H2 provider. Carbon black evolved from a necessary by product to an economic driver. Strategic partners and investors are key. Access to capital and operational expertise is critical. No short cut to success follow rigorous process design test -scale prototype -test again Beta system operation test refine Field Pilot project Commercial CarbonSaver will be in the Field Demonstration phase in 2013! CarbonSaver Plasma Plant Configuration Natural Gas Hydrogen Power CarbonSaver Plasma Plant Carbon Black Metallurgy & Rubber 2