Sustainable Energy with Reciprocating Engines

Sustainable Energy with Reciprocating Engines Diego Matrajt Business Development Manager Electric Power Division Caterpillar Inc.

Agenda Introduction: The Energy Challenge Sustainable energy solutions using reciprocating engines. Biogas Landfill gas. Sewage gas. Industrial biogas. Agricultural biogas. Coal Mine Methane. Cogeneration (CHP). Caterpillar Sustainable Solutions Final Remarks. Page 2 CATERPILLAR CONFIDENTIAL: GREEN

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I d Like One Page 4 CATERPILLAR CONFIDENTIAL: GREEN

An Upward Trend Page 5 CATERPILLAR CONFIDENTIAL: GREEN

The Impact of Energy Consumption Upstream Depletion of non-renewable resources, oil spills. Downstream Air pollution, greenhouse gases. Page 6 CATERPILLAR CONFIDENTIAL: GREEN

Another Upward Trend Page 7 CATERPILLAR CONFIDENTIAL: GREEN

The Challenge: Sustainable Development Meets the needs of the present without compromising the ability of future generations to meet their own needs. Page 8 CATERPILLAR CONFIDENTIAL: GREEN

Caterpillar Sustainability Commitment Our vision is to contribute, through our diverse businesses, to a society in which people s basic needs are not only met but fulfilled in a way that sustains the environment. Page 9 CATERPILLAR CONFIDENTIAL: GREEN

Reciprocating Engines & Sustainable Energy RENEWABLE ENERGY SUSTAINABLE ENERGY ENERGY EFFICIENCY Utilize diverse low energy fuels. Proven technology. Used in diverse applications. High efficiency (CHP) Sustainable Energy Projects Page 10 CATERPILLAR CONFIDENTIAL: GREEN

Sustainable Energy Projects Biogas Projects. Agricultural biogas. Landfill gas. Sewage gas. Industrial biogas. Coal Mine Methane. Page 11 CATERPILLAR CONFIDENTIAL: GREEN

What is Biogas? Biogas: Is a methane rich flammable gas produced by the anaerobic digestion or fermentation of organic matter. Component Estimated Content (%) Methane, CH 4 50-75 Carbon dioxide, CO 2 25-50 2% 2% 5% 2% 1% Methane Carbon Dioxide Nitrogen, N 2 0-10* Hydrogen, H 2 0-1 33% 55% Hydrogen Sulfide Ammonia Nitrogen Hydrogen sulphide, H 2 S 0-3 Oxygen, O 2 0-2 Oxygen Hydrogen Page 12 CATERPILLAR CONFIDENTIAL: GREEN

Biogas Main Contaminants Hydrogen Sulfide (H 2 S): Depends on the process and type of waste. Need to keep this at the lowest levels possible. Ammonia (NH 3 ): Usually low, but could be higher with poultry excreta and also when special types of waste are fermented. Siloxanes (Si0 2 ): Can be found in cosmetics, detergents, printing inks and building materials. (Waste Water & Landfill) Page 13 CATERPILLAR CONFIDENTIAL: GREEN

Some Facts About Methane Methane is a short-lived Greenhouse Gas (GHG) with an atmospheric lifetime of approximately 12 years compared to over 100 years for carbon dioxide. Methane is 23 times more potent as a GHG, kilogram for kilogram, than carbon dioxide. Some 60 percent of methane emissions come from anthropogenic sources. Page 14 CATERPILLAR CONFIDENTIAL: GREEN

Biogas Project Benefits Direct GHG (CH 4 ) reduction. Avoided GHG from fossil fuel generation. Increased energy independence. Use of local, renewable energy source. Increased efficiency. Enhance air and water quality. Jobs, revenue, cost savings. Page 15 CATERPILLAR CONFIDENTIAL: GREEN

Landfill Gas-To-Energy Description Sanitary landfills produce large amounts of methane and CO 2 gas due to the natural biological digestion of the organic materials incorporated in the fill. Internal combustion engines are used to consume (destroy) the Landfill gas extracted from landfills with the aid of a gas collection system. The gas produced is composed of about 50 percent methane, about 50 percent carbon dioxide and a small amount of non-methane organic compounds. Industries Applications Municipal Landfills Private Landfills Heat Intensive Applications Locations close to the landfill Greenhouses Chemical Processes Food Processing Page 16 CATERPILLAR CONFIDENTIAL: GREEN

Landfill Customer: Dekalb County Seminole Road Landfill Dekalb County, Seminole Road Landfill Ellenwood, Georgia, USA 2 Cat 1,600 kw generator sets We were able to attain an average generator set availability of over 91 percent, said Malone. We were under contract with Georgia Power to produce 22,500 MW, and we met that goal. To place this output in perspective, Malone notes that the two Cat generator sets, producing a combined 3.2 MW of electric power per hour, are generating enough electric power for approximately 2,500 homes. Page 17 CATERPILLAR CONFIDENTIAL: GREEN

Landfill Customer: Biogeracao Energia S.A. Biogeração Energia S.A. São Paulo, Brazil 24 Cat gas gen sets producing 22 MW 170,000 MW-hrs/yr (enough energy for 58,000 homes) Reduces 1.5 MMt/yr CO 2 e initially 16 MMt CO 2 e in the next 16 years CER CO 2 value ~ $240 mil (at $15/Mt) Page 18 CATERPILLAR CONFIDENTIAL: GREEN

Sewage Gas Description Sewage treatment, or domestic wastewater treatment, is the process of removing contaminants from wastewater and household sewage, both runoff (effluents) and domestic. It includes physical, chemical, and biological processes to remove physical, chemical and biological contaminants. Industries Applications Wastewater treatment facilities Heat Intensive Applications Locations close to the landfill (Used to improve landfill gas quality) Greenhouses Chemical Processes Food Processing Page 19 CATERPILLAR CONFIDENTIAL: GREEN

Digester Gas Customer: City of Hamilton City of Hamilton Ontario, Canada One Cat G3520 @1.6 MW gas generator set, fuel conditioning system, heat recovery equipment, switchgear and utility interconnections, PLC-based controls, and a sound-attenuated enclosure The dealer delivered the complete cogeneration system in a stand-alone module with a soundattenuated enclosure. At the heart of the system is a Cat gas engine in a configuration designed to be durable and reliable in burning low-energy fuels without needing extensive fuel conditioning. The facility operates continuously, fulfilling nearly all of the wastewater treatment plant heat load and 20 percent of its electrical load. Total cogeneration plant efficiency exceeds 80 percent. Projected simple payback on the cogeneration equipment is five years. Page 20 CATERPILLAR CONFIDENTIAL: GREEN

Digester Gas Customer: Thames Water Utilities Thames Water Utilities Kent, England Two Cat G3516 biogas specialized generator sets Engineering planning, equipment testing, delivery, set-up and installation, 24/7 remote monitoring, ongoing product support and financing. Due to the critical nature of the application, the site demands 90% uptime. By using methane gas resulting from sewage, 2.3 MW of green electricity is produced, enabling the site to be fully self powered. In addition to the electricity, 2 MW of heat is needed to supply the digester load. Page 21 CATERPILLAR CONFIDENTIAL: GREEN

Industrial Biogas Description Water is often used in the processing of foods, beverages and ethanol made from agricultural crops. The waste water from the process is collected and treated as effluent in a digester plant. The anaerobic digestion of the effluent creates a biogas that consists of varying amounts of methane ands CO 2. The methane can be collected for consumption in a gas generator set to create electricity while enabling emissions credits. Industries Applications Food processing Beverage processing Heat Intensive Applications Heat for facility process or cleaning Locations close to the facility Greenhouses Chemical Processes Food Processing Commercial Byproducts Fertilizers Soil enhancement products Animal bedding Page 22 CATERPILLAR CONFIDENTIAL: GREEN

Industrial Biogas Customer: Kalasin Waste to Energy Kalasin Waste to Energy Co., Ltd. Kalasin Province, Thailand One Cat G3516@ 1,040 kw generator set - Digester application (Cassava) (Starch) Kalasin anticipates that the unit will meet its target return on investment of approximately 16 million baht per year. Plans are currently underway to expand this biogas project to generate up to 9 MW of power in the future. Beyond the economic benefit, the waste gas will not be released into the environment. Page 23 CATERPILLAR CONFIDENTIAL: GREEN

Industrial Biogas Customer: Guangzhou Zhujiang Brewery Guangzhou Zhujiang Brewery Group Co. Ltd. Guangzhou, People s Republic of China Cat G3508 @ 460 kw generator set Cat G3516 @ 960 kw generator set Cogeneration System The Cat dealer began by presenting a comprehensive cost analysis to the brewery, including initial investment and operating costs, estimating that up to 95% of their biofuel methane could be used by the new system. Currently, the overall efficiency of the generator sets is up to 80%. The brewery s current cost savings from the system is an estimated RMB400,000 (over USD58,000) per month. Page 24 CATERPILLAR CONFIDENTIAL: GREEN

Ag Biogas Description Organic matter is flushed or loaded into large lagoons (pits), or sealed containers where bacteria in the natural anaerobic digestion process produce biogas (typically 65% methane and 35% CO 2 ). The effluent can be heated to accelerate the process (38 degrees C or 56 degrees C). In many parts of the world, ag biogas is responsible for up to 10% of greenhouse gases. The methane can be collected for consumption/ destruction in a gas generator set to create electricity while enabling emissions credits. Industries Applications Swine Farrowing/ Feeding Cattle Feeding & Milking Fowl Brooder House/ Feeding Heat Intensive Applications Locations close to the operation Heat for operation facilities Heat for improved digester operation Greenhouses Food Processing Etc. Commercial Byproducts Fertilizers Soil enhancement products Animal bedding Page 25 CATERPILLAR CONFIDENTIAL: GREEN

Ag Biogas Customer: Nong Rai Farm Nong Rai Swine Farm Rayong, Thailand Cat 105 kw generator set Cat 70 kw generator set As the generator sets would be running continuously, it was important to work with a supplier that could provide guidance on engine care and also have parts available in a timely manner when necessary. Caterpillar was chosen because of its reputation for quality power generating equipment and extensive field validation of similar units operating on methane gas. Page 26 CATERPILLAR CONFIDENTIAL: GREEN

Ag Biogas Customer: Seacliff Energy Seacliff Energy Leamington Ontario, Canada Cat 1600 kw generator set Cat 1600 kw generator set Project financing for the construction and operation phases was supplied by Cat Financial. Seacliff also secured a longterm service agreement with Toromont to mitigate operational risks, maintain equipment efficiencies and ensure high levels of availability. Page 27 CATERPILLAR CONFIDENTIAL: GREEN

Coal Mine Methane Description Methane gas is naturally occurring in coal seams. It is released during coalification process. One of the ways Kyoto participants pursue the goal of carbon reduction is through the Clean Development Mechanism (CDM). One of the most promising and effective greenhouse gases used in CDM projects is coal mine methane (CMM). Cat gas engines can destroy the methane gas to create electric energy while enabling emissions credits. Industries Applications Privately held coal mines State-owned coal mines Abandoned coal seams Heat Intensive Applications Locations close to the sight of generation Mine facilities heating and cooling Chemical Processes Food Processing Page 28 CATERPILLAR CONFIDENTIAL: GREEN

Coal Mine Methane: Jincheng Sihe Mine Jincheng Sihe Mine Shanxi Province, China 60 Cat gen sets in a combined cycle steam turbine application producing 120MW @ 1060m (3,500 ft) altitude Largest CMM project worldwide 840,000 MW hrs/yr sold to utility 233,600 GJ heat recovered (winter only) System efficiency of 80% 2.9 MMTCO2e CERs Economic value: $45.3M/yr @$15US) Page 29 CATERPILLAR CONFIDENTIAL: GREEN

Complete Line of Gas Gensets & Solutions Olympian G3300 G3400 CG132 G3500 G3600 CG260 CM 12.5kVA to 7,375kVA at 50Hz Our Gensets run on a variety of fuels (Natural Gas, Biogas, propane, etc.) Full Support from our dealer network Parts Service Engineering Consulting Financing Turnkey Solutions Page 30 CATERPILLAR CONFIDENTIAL: GREEN

18GW Gas Genset Capacity in 15 years! 2.9GW 4,150 units 7.8GW 5400 units 895MW 562 units 725MW 1000 units 1.6GW 1,400 units 4.1GW 3,600 units Page 31 CATERPILLAR CONFIDENTIAL: GREEN

Combined Heat & Power The simultaneous and sequential use of electric power and heat from the same fuel source. Utilize the heat that otherwise would have been wasted. Heat Hot water Cool water Steam. Page 32 CATERPILLAR CONFIDENTIAL: GREEN

Final Remarks Plenty of opportunities in diverse applications. Reciprocating engines are a cost effective, viable, sustainable and readily available solution. Projects that allow CHP schemes can help you maximize efficiency and savings. Consult with your Cat dealer to get guidance and support to develop your project solutions. Page 33 CATERPILLAR CONFIDENTIAL: GREEN

Questions? Diego Matrajt Business Development Manager Caterpillar Electric Power Division Matrajt_diego_t@cat.com