Providing Safe - Dependable On-Site Energy

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1 Providing Safe - Dependable On-Site Energy 1

2 DownStream Generation Systems Self Contained Modular Design Natural gas to the box customer utility outputs Below EPA emissions standards Sound management based on site requirements Safeguards / Security / SCADA / Protocols Applications Electricity, heat, steam, cooling. System Life years 2

3 Wellhead Energy Systems Formed in December 2009 Division of Enerfab, Inc. Cincinnati HQ Eight locations throughout the US Kentucky New Energy Ventures Equity investment for innovative energy production Demonstration Site Jackson Energy Coop East Kentucky Power Cooperative (G&T) Service and Maintenance BESCO Knoxville, Nashville, Oak Ridge, Chattanooga 24 hour service and support for our installations Packaging Best in Class Technologies 3

4 Market Drivers DownStream Generation Energy Demand Growth in Residential Flat at best in Industrial Sector Sustainability Renewable goals cannot be attained Public policy will drive clean coal and some nuclear Large natural gas finds are offering cleaner solutions with stable pricing. Delivery Constraints EPA is driving the bus Retrofits and new Plants Permitting and timings don t match demand Infrastructure needs a facelift Pricing Many distributors and cooperatives are concerned about pricing tsunami on the horizon. This tsunami fear has industry in a holding pattern. 4

5 Advantages DownStream Generation Systems (DGS) Flexibility Electricity, Heat, Steam, Cooling Cost Savings Basic CHP systems average about 20% savings Redundancy Always grid connected Energy Production Surplus Net metering to utility 5

6 A Site Installation Substation DIST Net Metering Juice Plant Electricity for: Power Steam - Hot Water Chilling - AC GridFox tm 3 GridFox tm 4 1 megawatt of Electricity and 4,000,000 BTU/hour of Heat Energy 3600 pounds of steam / hour Chilling capacity of 250 tons GridFox tm 2 Downstream Generation 6

7 Energy Costs All-In Cost of Energy Generation* Concentrated Solar Offshore Wind CC Gas Turbine Conventional Wind Coal with Sequestration Nuclear Biomass IGCC Geothermal CHP $0/MWh WES GridFox Old Coal $100/MWh $200/MWh $300/MWh Renewable Conventional Energy Reuse Coal $400/MWh * Includes Transmission, lines losses, backup generation & subsidies. Average retail is approximtately $100 per MWh $500/MWh 7

8 The Cost of Energy Centralized Generation Electrical Usage = 1000 $.07 per kwh Steam Needs = 3600 pounds per per 1000 Total Cost of Energy $890, DownStream Generation Systems Electrical Generation Costs = ($.045 per kw) Waste Heat Steam Generation = no cost Total Cost of Energy $ 378, Yearly Savings $ 512, (single system) 8

9 Acquisition Options System Purchase 1020 net kw modular units Preventative Maintenance program included Remote Monitoring Depreciation advantages Potential tax credits / CO 2 reduction System Purchase $.035-$.045 per kwh* Purchase Energy Price based on delivered costs Preventative Maintenance program included Fixed rate pricing (flat rate or escalating) Purchase Energy $.05-$.08 per kwh* Complete System Operations available *The numbers shown are estimates and provided for planning purposes only. 9

10 Plant Analysis Energy Study Trusted Equipment Providers / Utility Equipment Design w/options Developed Specifically for Location Expansion of Basic System Financial Analysis / ROI Internal Metrics are Key Methods of Acquisition Own, Lease, or Buy Power 10

11 Benefits Strategic Plan for Energy Needs Fixed Costs / Cost Savings / Competitive Edge Fit for the Purpose Flexibility of Power Produced Energy Integrity Voltage Support / Less Demand Options for Operation In-House / Outsourced Sustainable Solution DownStream Generation is a Smart and Efficient Idea 11

12 Thank You! WELLHEAD ENERGY SYSTEMS, LLC 203 North Main Street, Somerset, KY