attracting and maintaining institutional investment: biomass

Biomass Risk Management

Darren Williams

Commercial Director

Eco2 Limited

Background

• Swalec • Joined generation business in 1993

• Energy Power Resources – 2006 • Biomass and waste energy • Ely Straw fired station project manager • Largest biomass generator in UK

• Founding Director of Eco2 – 2002 • Wind – Dummuie, Betws, Hatton, Bogenlea • Landfill Gas • Tidal Energy Limited • Biomass – Western BioEnergy, Sleaford, Brigg and a

further 8 biomass plants throughout UK and Europe under development

Is Biomass Riskier than Wind?

• Both offer construction and fuel risk • Proven technologies available • Long term contracts achievable • A biomass plant has a team on site to make

sure it runs 24 hours a day • Lots of projects with good operating history;

but • DEBT FUNDERS ARE NOT SURE!

Key Biomass Risks

Three Key Risks:

•Fuel •Fuel •Fuel •Other Risks

• Construction/Technology Risk • Offtake provisions • Operating Risks

Fuel – Key Risks

•Is there enough? •What will the price be in the long term? •How do you get it to the plant at all times?

•Counter Party Risks?

Is there enough?

Sleaford

What will the price be in the long

term?

• In depth knowledge of the market • Needs third party confirmation • Long term fuel contracts • Ability to utilise back up fuels

How do you get it to the plant?

• Need to fully explain the fuel logistics strategy

• A track record of managing fuel for a UK biomass plant

• Appropriate contingency planning

• No substitute for having done it before

Counter Party Risk

• Wide range of fuels with wide range of suppliers

• Some large scale suppliers in the market • Strength of counter part vs number of

contracts

Construction/Technology

• Proven track record of technology on the chosen fuel • Proven contractor within the biomass/waste sectors • Appropriate contract and guarantee structures

• Liquidated Damages and Bonds • Parent Company Guarantees • Owner management of construction

Off-take Provisions

• Key off-take risk is the Power Purchase Agreement • Bankable counter party • Guarantee Structures • Floor price or not? • Change of law

• Ash and effluent provisions • Grid Connection

Operating Risks

• Long term Operations and Maintenance Contract • Operations and Maintenance Contractor – track

record • General Plant Management

• Fuel and O&M contract interface • PPA management • Accounting function

• Really important to understand who is going to do what and make sure it gets done

Is it all possible?

• Thankfully yes!

INSTRUCTIONS

Guidance on

formatting the

beam is

available in the

notes pages of

this document.

The UK biomass opportunity

Eversheds conference – July 2012

Ref: 1126192

Page

Section 1 The Ernst & Young Environmental Finance team 3

Section 2 The investment landscape for biomass 6

Section 3 The impact on financing of CfD 11

Section 4 The funding backdrop 13

Section 5 Summary 20

Agenda

Eversheds conference June 2012 2

Ref: 1126192

Ernst & Young Energy Infrastructure Advisory team

We are a market leading renewable energy

corporate finance team, with over 60

dedicated professionals advising on

energy and environmental finance

Financial Adviser of the Year - Renewable Energy

Financial Adviser of the Year – Power

Financial Adviser of the Year - Social Infrastructure

Ernst & Young acted as lead financial advisor to SeaEnergy Plc.

SeaEnergy Plc

This announcement appears as a matter of record only.

has disposed its offshore wind development subsidiary,

SeaEnergy Renewables

Ltd

Repsol

to

for £50 million

Ernst & Young acted as financial advisor to RES UK & Ireland Ltd.

has disposed of a majority stake of

Wadlow Energy Ltd

to

Barclays Infrastructure Funds

RES UK & Ireland Ltd

This announcement appears as a matter of record only. August 2011

Ernst & Young acted as lead advisor to the company and founder shareholders, HSBC Environmental Infrastructure Fund and Carbon Trust Enterprises Limited.

has raised addit ional funding for its onshore wind development portfolio through the sale of a minority stake in the company to OPTrust

for an undisclosed sum

Partnerships for Renewables Ltd

This announcement appears as a mat ter of record only. November 2010

3 Eversheds conference June 2012

Ernst & Young acted as financial advisor to the shareholders of Eco2 Lincs Limited.

Eco2 Lincs Limited


has raised £115 million of senior debt funding to construct and operate the Lincolnshire based 38 MW straw fired

Sleaford Renewable

Energy Plant The lending club consisted of NIBC Bank NV, The Royal Bank of Scotland, Siemens Bank GmbH and Unicredit Bank AG

We are currently advising on:

► Over 5GW of renewable M&A

transactions in Europe

► Over £300m of project financing for

renewable projects in Europe

In the last 15 months, we have:

► Disposed of four consented onshore

wind farms in the UK

► Secured c.£115m senior debt and a

PPA for Sleaford biomass plant

► Advised on PPAs for over 130MW of

renewable energy capacity.

► Provided complex financial modelling

and structuring services to the largest

solar project finance facility in the UK

(Eaga - £225m)

Since 2005, we have:

► Raised project finance for over 785MW

of renewable energy assets

► Advised on PPAs for over 1.1GW of

renewable assets

Ernst & Young provided accounting, tax and modelling services to Eaga plc.

has provided accounting, tax and modelling services on Eaga's £300m project f inancing of a portfolio of social housing rooftop solar PV installations

Eaga plc

UK Solar PV project financing

This announcement appears as a matter of record only. March 2011

Ernst & Young acted as advisor to HeliusEnergy plc.

has disposed of a

73M W fully-consented

biom ass site

for £28 million and 13% carried-interest

Helius Energy plc


Ref: 1126192

Ernst & Young Energy & Environmental Finance

Our EEIA team sits within the wider EMEIA

Infrastructure Advisory team, allowing us

to understand financing trends across a

broad range of asset classes.

Eversheds conference June 2012

► We have undertaken in excess of 800

infrastructure transactions that involved

complex structuring in the project

finance market.

► We are lead advisor on a number of

ongoing high profile assignments

► We are currently advising on £10 billion

of infrastructure project financings,

including a number of high profile

assignments in the energy and

environment space

► We are consistently ranked number 1 in

the project finance market

► Our awards is a reflection of our market

leading position in the infrastructure

financing space

Source: “Project Finance International” and “Infrastructure Journal” League Tables – 2011

Rank Financial adviser Deals Value ($m)

1 Ernst & Young 31 $16,290

2 PwC 19 $7,834

3 KPMG 18 $6,051

4 HSBC 15 $16,469

5 BNP Paribas 12 $19,495

Global infrastructure advisory mandates closed – 2011


Ongoing

Financial Advisor on the structuring and financing of the £4bn Thames Tunnel project


Ongoing

£1.5bn Smart meter funding and commercial strategy Financial Advisor


Ongoing

Structuring and financing advice on £1.5bn major infrastructure roll out Financial Advisor

4

INSTRUCTIONS

The font size on the slide master

has been increased by 1pt, so that

text sizes are applied to the

standard two column layout in the

correct font size.

Go to the View menu and select

Header and Footer… to update

the Proposal title and Date.

No.1 by Global and EMEA Mandates Won

2005 - 2009

No.1 by Global PFI/PPP Deals closed

2009 & 2011

Ernst & Young 2011 No.1 by Global

Mandates Won

2009 Renewable Energy Advisor of Choice

Ernst & Young 2010 No.1 by Global

Mandates Won

Financial Advisor of the Year – Renewables

2008

PPP Financial Advisor of the Year

2005, 2007 & 2009

2011 Best Project Finance Adviser in EMEA and CEE

2009 Best Project Finance House – Financial Advisor

Best Advisory Firm – Renewable Energy Europe

Financial Adviser of the Year - Renewable Energy

Financial Adviser of the Year - Power

Financial Adviser of the Year - Social Infrastructure

2011 Middle East Power Deal of the Year

Sur IPP

2011 Best Infrastructure Deal in CEE - Polish Airports State Enterprise’s PLN700mn fund

raising

2011 PPP Deal of the Year Suffolk Waste PFI

European Transmission Deal of the Year - Robin Rigg OFTO

2011 Best PPP Deal in the Middle East – Bahrain Housing

2011 Asia-Pacific PPP Deal of the Year

Adelaide Hospital

Infrastructure Advisory– our awards

5

Partnerships Awards 2012

Best Local Government Project Team Devon Waste Partnership

Partnerships Awards 2012 Partnerships Awards 2012

Best Waste/Energy/Water Project South West Devon Energy from Waste PFI

Project Grand Prix South West Devon Energy from Waste PFI

Overall Project Finance Firm of the Year: UK

Partnerships Awards 2012

Best Financial Adviser

Eversheds conference June 2012

Ref: 1009231

Section 2

The investment landscape for biomass

Ref: XX00000

Generation

68% Offshore

power

transmission

5%

Onshore

power

transmission

6%

Power and

gas

distribution

2%

Smart

meters

5%

Other

14% Nuclear

generation

27%

Gas

generation

5%

Coal with

CCS

5%

EY’s assessment of UK energy investment requirements


UK energy investment requirements to 2020 (£199bn) Generation investment £136bn

£85bn £136bn

Replacement cycle

Environmental targets Demand growth

Renewables

generation

63%

Ref: XX00000

Government is increasingly supportive of bio-energy


Charles Hendry MP – 28 June 2012

► Biomass could meet 40% of the Government’s 2020 renewables target and provide

‘sustainable, cost-effective and low-risk‘ energy generation as part of a balanced energy mix.

DECC April 2012 (launch of the bio-energy strategy)

► “[The] new biomass strategy targets a sector supporting 50,000 jobs and producing 11 per

cent of UK energy by 2020”

DECC RO Banding consultation (ongoing)

► 1.5 ROCs

► 0.5 ROC uplift for CHP maintained until April 2015

► Co-firing and coal conversion

Green Investment Bank

► Biomass waste a priority area

Renewable Heat Incentive

► First of its kind support for renewable heat generation

Ref: XX00000

What is the investment opportunity?


Large scale (greater than 20MW) biomass - consented •Source: Department of Energy and Climate Change/ EY proprietary knowledge

Corpach (20MW) –

Peel

Immingham (50MW)

– Real Ventures

Billingham (45MW) –

Gaia

Tees Renewable

Energy Plant

(295MW) – MGT

Sleaford (40MW) –

Eco 2 (Straw)

Tilbury Green Power

(65MW) – Express

Energy

Avonmouth

(100MW) – Helius

Port Talbot (300MW)

– Prenergy

Pollington (53MW)- -

Dalkia

Stallingborough

(60MW) – RWE

Bristol (150MW) –

E.ON

Nevis (50MW) –

Welsh Power

Anglesey (299MW)

– Anglesey

Aluminium

Brigg (40MW) –

Eco2 (Straw)

Ridham CHP Plant

(25MW) – Evonik

Tansterne (25MW) -

GB Bio (Straw)

Stockton on Tees

(50 MW) - Bio

Energy Investments

Morgan Credit

(25MW)

► C.2GW ‘here and now’ investment opportunity

► Pipeline increases significantly for:

► Coal conversion

► Co-firing upgrade

► Pre-consent pipeline

► Sub 25MW CHP

► Advanced Conversion Technology

► Biomass boiler market

► Anaerobic digestion

► Related supply chain upgrades (eg

upstream and midstream)

► Investment opportunity could be in excess of

c.£10bn

Immingham

(299MW) - Drax

Ref: XX00000

What are the challenges?


Primary

► Regulatory support (RHI, ROCs, FITs, ECAs, CFDs, grandfathering………)

► Contract bankability

► fuel, fuel, fuel!!!!

► PPA, PPA, PPA!!!

► Accessing financing

Potentially

► Sustainability agenda

► Project returns

► Technology risk

► Construction risk

► Operating risk

Ref: 1009231

Section 3

The impact on financing of CfD

Ref: XX00000

The proposed FiT CfD

► Will investors be turned off by lack of power price

exposure?

► Will 15 year tenor attract investors seeking long term, low

risk returns?

► Strike price mechanism?

► Guarantor between generator and supplier?

The key to achieving these objectives will be to bring forward the level of investment needed in

new low-carbon generation capacity and infrastructure at the required pace and through a

combination of measures.

Source: DECC

► Overlap of RO provides some continuity, but without

absolute certainty on revenue

► Gross margin indexation linkeage RO and FiT CFD –

loss of natural hedge?

► Competition against transport fuels (revenues linked to

oil price)

Ref: XX00000

Section 4

The funding backdrop

Ref: XX00000

Utility balance sheets remain constrained


Traditional corporate finance not up to the task

► In 2001, 10 of the top 13 utilities in Europe were

rated AA+ to A+

►In 2012, one (EDF) is in that range

► Downgrade to BBB category increases the cost of

debt, and cost of doing business

► Management of their balance sheets and off-book

liabilities has become a key feature of Utility

finance (IFRS eg lease accounting)

► Utilities’ capacity to carry out renewable energy

ambitions of Europe is constrained

2001 2012

BB+ BBB BBB+ A- A A+ AA- AA

Credit ratings trajectory – top 12

integrated utilities

Ref: XX00000

Financing considerations – market backdrop


Source: Bloomberg Source: Bloomberg

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Jan-1

0

Mar-

10

May-1

0

Jul-

10

Sep-1

0

Nov-1

0

Jan-1

1

Mar-

11

May-1

1

Jul-

11

Sep-1

1

Nov-1

1

Jan-1

2

Mar-

12

May-1

2

Yie

ld (%

)

US, German and UK Government

Bond Yields

US Germany UK

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Jan-1

0

Mar-

10

May-1

0

Jul-

10

Sep-1

0

Nov-1

0

Jan-1

1

Mar-

11

May-1

1

Jul-

11

Sep-1

1

Nov-1

1

Jan-1

2

Mar-

12

May-1

2

Yie

ld (%

)

Greek, Spanish and Portuguese Government

Bond Yields

Greece Spain Por tugal

Key drivers

► Volatility in the financial

markets

► The ongoing Eurozone

debt crisis

► Basel III

.

Impacts

► Banks raising capital in a tough wholesale market or

shrinking their balance sheets

► Project finance loans will attract steep capital weightings

► Some banks may look to sell down their project finance

portfolios to bolster ‘Tier 1’ capital

► Banks that are less well capitalised and/or lacking support

from Government with ready access to the capital markets

have seen their cost of debt increase

Ref: XX00000

Project finance has become a less preferred choice


► Increasing trend towards:

1. Club lending

2. Credit committee decision making driven by

relationships and geography

3. Mini-perm structures

4. Aggressive cash sweeps and restrictions on

payments to equity

5. Rise in margins (although offset by recent fall in the

long-term swap rate)

► Major deals continue to be done (see graphic)

► Role of ECAs and Multilaterals key for overall funding

strategy and market approach

► Deals are being closed for biomass (Sleaford, Helius

Cord) and more are in the pipeline

Source: Infrastructure Journal

0

50

100

150

200

250

300

350

2005 2006 2007 2008 2009 2010 2011

US

$ b

n

Global project f inance volume by funding source

Equity Bonds Loans IFI Suppor t

Ref: XX00000

Biomass offers various business models for different

classes of funders


Institutional capital - >100MW / conversion

► Larger institutions/those with infrastructure experience

can participate through in house teams (eg Ontario

Pension Trust, Aviva)

► Typically looking for investment tickets >£50m, and in

some cases alongside another institution

► Looking for long term stable yields to balance 25-30

year index linked liabilities

► Equity investment currently provides exposure to

power price risk - a challenge for institutions seeking

stable revenues

► Challenges

1. Perception of renewables as an infrastructure

asset class

2. Deal ticket size

3. Lack of residual asset value

4. Volatility in gross margin

5. Construction risk

Fund model <100MW

► The historic fund model of 20% carry and 2%

management charge is under pressure

► Smaller institutions/those without infrastructure

experience may be more suited to providing debt or

participating through such funds

► Challenges

1. Availability of leverage

2. Availability of ‘shovel ready’ projects

3. Investment scalability and flexibility

Other forms of capital

► Tax driven equity (EIS/VST) – sub 10MWs and RHI

► Project bonds - >50MW

► Non-utility corporates– all asset classes

Ref: XX00000

Section 5

Summary

Ref: 1126192

Summary


Biomass investment opportunity

► C.£10bn of investment opportunity over the next few years

► Many recent blockers have been removed

► There are still significant risks that need to be worked through (fuel, offtake)

Capital needs are huge

► Biomass competing against other large scale energy infrastructure funding requirements (nuclear,

offshore, CCGT, grid)

► The UK generally needs to compete for limited funds

New sources of capital are needed

► Utilities cannot do it all / banks cannot project finance it all

► Encouraging new sources of debt and equity is essential

New capital requires new structures

► Innovative structures are needed to access capital

► CfDs could help achieve UK energy objectives if carefully structured but challenges remain

Ref: 1126192

Ernst & Young LLP

Assurance | Tax | Transactions | Advisory

www.ey.com/uk

The UK firm Ernst & Young LLP is a limited liability

partnership registered in England and Wales

with registered number OC300001 and is a member firm

of Ernst & Young Global Limited.

Ernst & Young LLP, 1 More London Place, London SE1 2AF.

© Ernst & Young LLP 2012. Published in the UK.

All rights reserved.

This document has been prepared by Ernst & Young. The information and opinions contained in this document are derived from public

and private sources which we believe to be reliable and accurate but which, without further investigation, cannot be warranted as to their

accuracy, completeness or correctness. This information is supplied on the condition that Ernst & Young, and any partner or employee of

Ernst & Young, are not liable for any error or inaccuracy contained herein, whether negligently caused or otherwise, or for loss or damage

suffered by any person due to such error, omission or inaccuracy as a result of such supply. In particular any numbers, initial valuations

and schedules contained in this document are preliminary and are for discussion purposes only.

Biomass Technology

Paul Noble

2nd July 2012

1

Context in today’s workshop

• Biomass Technology – Paul Noble

• Managing Project Risks – Darren Williams

• Financial Modelling and funding structures of

renewable projects – James Barrett-Miles

Contents

1. Biomass in the UK Energy Mix

2. Technology Review

3. Biomass Co-firing and Conversion

4. What is happening now?

5. What of the future?

UK Bioenergy Strategy, April 2012

“The potential scale of bioenergy deployment: although highly

uncertain, our analysis indicates that sustainably-sourced bioenergy

could contribute by 2020 around 8-11% to the UK’s total primary

energy demand and around 12% by 2050 (within a wide range of 8%-

21%)”

“Biomass in power generation currently accounts for less than 3% of

the total electricity generation in the UK. Going forward our analysis

indicates that biomass in power generation has an important

transitional role which can contribute to the cost effective delivery of

our renewable targets. The range of biomass in power generation to

2020, which are consistent with our principles, could be 20 to 40 TWh

of delivered energy in 2020, accounting for 5% to 11% of total power

generation”

4

National Grid View, 2011

5

Contents





Technology Map

Waste

Chemicals

Biofuels

Biotechnology

Reverse cracking

Algae

Ethanol

fermentation

Enzymes

Anaerobic digestion

Fischer-Tropsch

Transesterification

Biocatalysts

Separation

processes Petrochemical processes

Infrastructure:

energy supply, services, land,

logistics

Electricity

generation

Energy from

Waste

Coal

Biomass

CCGT

Wind

Pyrolysis

Gasification

FGT ASH

BOILER EQUIPMENT

CONTROL

FUEL STORE 1

FUEL STORE 2

EQUIPMENT

CONTROL

FUEL

CONVEYORS *

FUEL DELIVERY

FUEL

*

RAW WATER – SUPPLY AND DISTRIBUTION (S & D) PIPING *

COMPRESSED AIR - (S & D) *

LV ELECTRICAL (S & D) *

STG*

EQUIPMENT

CONTROL

STEAM *

STEAM*

FW *

EQUIPMENT

CONTROL

DEMIN*

DEMIN *

WATER

EQUIPMENT

CONTROL

HV *

EQUIPMENT

CONTROL

GRID

E *

COOLING * (ACC)

EQUIPMENT

CONTROL

CON

EQUIPMENT

CONTROL

FIRE PROTECTION*

WATER *

(IF WET COOLING)

(NB - EFW-SINGLE STAGE)

(BIOMASS – 4/5 STAGE)

OVERALL CONTROL SYSTEM * - “PLANT” OR “STATION LEVEL” *

BUILDING SERVICES *

Biomass Technology for Power Generation

1) Fuel Preparation and Processing:

Separation, Drying, Pelletisation, Torrefaction

2) Combustion:

Grate Combustion – open flame

Fluidised Bed Combustion Groups

Pulverised Fuel

3) Low Oxygen Processing

Gasification or low oxygen processes including pyrolysis

Project Development Process

Concept Screening

Pre-Feasibility Assessment

Cost Estimate

-20% to +50%

Design Basis

Concept development and finalisation

Project Definition

Cost Estimate

-15 to +30%

Basic Design

Front End Engineering Design (FEED)

Cost Estimate

-10% to +10%

Detailed Design

Construction

Ranking of Options

Select preferred

option

Engineering work to

finalise the project

scope and

implementation

Early Stages of Final

Design.

For EPCM, the 3rd party

engineer and the

tenderers, through supply

chain engagement, carry

out enough engineering to

achieve +/- 10% capex

Contractor team

performs much of the

engineering at this stage

although for some items

the 3rd party engineer

continues the

engineering to ‘issued for

construction’ stage

GATE 1 GATE 2 GATE 3

Fuel Processing and Storage

11

Fuel/Raw Material

‘Field of Origin’

Fuel/Raw Material Processing

Storage Density and moisture

variation

Combustion

12

Typical Stoker Fired

(Grate) Combustion Boiler

Typical Atmospheric (Bubbling)

Fluidised Bed Combustion Boiler

(AFBC)

Combustion Fuel Compatibility

Fuel Stoker /

Grate Bubbling Fluidised

Bed Circulating

Fluidised Bed

Existing Coal Boilers - includes a range of options such as

co-milling and direct injection

Straw Yes

MSW Yes

Wood Chip Yes Yes

Waste Wood Yes Yes Yes

Wood Pellets Yes Yes

Milled Wood Pellets

Yes

13

Contents





NMI

Pulverized fuel

transport

Day bin

Road/Rail/Ship

receiving Milling

Boiler Pellet

storage

Typical Biomass Conversion Scope

Conveyors and

hoppers

Controls including process controls

Electrical, Civil, Structural, Mechanical, Fire Protection

Comparison of Biomass New Build and Conversion

New Build Biomass Biomass Conversion

Combustion Characteristics

designed for required fuel variability

Adjust Boiler to burn new fuel. Consider new or modified

burners. Consider heat transfer surface

modifications

Emissions Treatment

designed for required fuel properties,

Adjustments required following assessment of fuel composition and combustion characteristics

Technology Guarantee straight forward Uncertain Contracting Approach EPC or multi-package EPC or multi-package

Biomass Conversion Example Risks (1)

Process Risks Mitigations

Fire systems /

explosion

prevention

Fire/explosion caused by build up of

dust

Fire Office/Independent Certifier

Interface.

Lessons learnt captured.

Interface to be managed early on.

Electrical

infrastructure

Insufficient expansion of

infrastructure available on site.

Load study.

Road reception Incorrect design and specification Design & specification

Rail reception Flow of pellets too slow or fast once

feeders replaced. Too much dust

generated.

Drainage failure & contamination.

Modify bunker to put extraction in.

Storage / delivery

conveyors

Conveyor failure. Problems include

power, control system, motors.

Complete redundancy to be provided. Dual 100%

systems.

Storage Fire detection & storage design

interface failure.

Excessive CO2 levels, bacteria, fire

risk.

Design to meet code of practice.

Design in movement and turning of stock to reduce risk.

Maintain relationship with silo providers as a fallback.

Reclaim conveyor Conveyor failure. Problems include

power, control system, motors.

Complete redundancy to be provided. Dual 100%

systems.

Biomass Conversion Example Risks (2)

Process Risks Mitigations

Milling towers Fire & explosion Dust Control Systems. Design in easy

access for cleaning floors, walls and

ceilings (removing flammable fuel build).

Milling equipment Power consumption excessive.

Reliability (particularly hammers).

Use equipment tested elsewhere.

Understand loads.

Use high quality equipment – assess

supply chain.

Pneumatic conveyor &

intermediate storage

Fire & explosion Dust Control Systems. interconnections

between equipment.

Furnace Exit Gas

Temperature

Poor Boiler Performance Detailed assessment. Internal Boiler

redesign

Boiler air systems Poor Boiler Performance

Over fire air technology

Slagging Deposition

Behaviour

Poor Boiler Performance

Provision for Furnace Wall Blowers

Dust Control Systems Poor Boiler Performance Safety risks

Emissions Control Out of compliance with permit to operate Detailed assessment of Boiler System

What is the Current Situation?

Development /

Planning Construction Operating

New Build 2,010MW 175MW 275MW

Conversion

(including cofiring) 6,350MW 300MW 1200MW

19

What of the future?

Energy Policy

Power sector is characterised by large scale investments with long

lead times and 10-15+ year payback requiring 10-15+ year regulatory

clarity, stability and internal consistency

CCS plus Biomass – potential for negative emissions

Technological advancement in the supply chain

20

attracting and maintaining institutional investment: biomass

Technology

fuel fuel fuel

fuel key risks

key biomass risks

biomass plants

biomass riskier

counter party risks

matter of record

fuel logistics strategy