Keith Pronske President & CEO CES 3035 Prospect Park Dr. Suite 150 Rancho Cordova, CA 95670

Clean Energy Systems, Inc.

Oxy-Turbine Technology Update

UKCCSRC Gas Networking

31 May 2013

• Company Background

• Technology Overview

• OFT-900 Oxy-Turbine Program

• Market and Application

Agenda

2

Company Background

3

• Founded in 1993 in Sacramento, California by former Aerojet (a GenCorp

company) aerospace engineers; incorporated in 1996

• CES technology portfolio

➯ 20 MWt 4ʺ GG has completed over 2,000 hours of running and is now insurable

➯ 200 MWt 12ʺ GG has been successfully tested on more than 500 starts

➯ 30 – 45 MWe oxy turbine has successfully produced power in less than 10 seconds on more than 50 starts

➯ 150 MWe oxy turbine being commissioned/tested at part-load

• 30 patents issued on zero-emissions oxy-combustion technology power cycles, 36 patents pending

• Owner of two power plants

➯ 5 MWe Kimberlina power plant (R&D site)

➯ 120 MWe Placerita power plant (commercial facility)

History and Recent Developments

Company Background

4

Equity and Strategic Partners

Company Background

Equity Partners

Paxton Corporation is an energy-focused company based in Calgary, Alberta; aggregator of technologies including CES’ oxy-fuel combustor for use in the extraction of hydrocarbons; significant equity position currently held by the largest shareholder of Paramount Resources Ltd.

Southern California Gas Company (a subsidiary of Sempra Energy; $16.0 B+ market capitalization) sells, distributes, and transports natural gas in the United States.

The AES Corporation ($8.5 B+ market capitalization) is a global power company with generation and distribution businesses.

Strategic Partners

Maersk Oil (subsidiary of A.P, Møller – Maersk A/S. with a $29 B+ market capitalization) is an international oil and gas company with operated production of about 625,000 barrels of oil (equivalent) per day.

Siemens Aktiengesellschaft ($80 B+ market capitalization) is a diversified international electrical and engineering company that provides solutions to the energy and other sectors.

Paramount Resources Ltd. ($2 B+ market capitalization) is an independent energy company that engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids in North America.

US Department of Energy works together with the country’s private sector to develop and foster new technologies to ensure America’s long-term energy security.

LM Alternatives Inc. and its sister companies have been providing quality parts and related services to turbo machinery users in industrial, utility and aviation applications for more than four decades.

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• CES’ Kimberlina Power Plant (“KPP”) is the world’s largest oxy-fuel combustion facility (160 MWt)

• Enables efficient development of technology solutions to commercial maturity

• Today is primarily for R&D and sub-commercial operations

CES Kimberlina Power Plant

Company Background

• Forty-acre site provides ample space for both future R&D programs and continuous, full-scale commercial operations

• Ideally situated: wedged in between heavy and light oil fields thirsty for steam and CO2

➯ Also amongst the water-deprived nut and fruit orchards of California’s Central Valley

➯ Sitting on top of a WESTCARB identified CO2 storage site

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150MWe Oxy-Fuel Turbine OFT-900

De-Min Tank

Company Background The World’s Largest Oxy-Fuel Facility

7

12” Gas Generator 200MWth

Re-Heater Test Stand Geo/Solar Thermal Booster Demo

24MWe Load Banks

Oxygen Accumulators

Areva Solar Thermal Plant

Oxygen Tank and Vaporizer

OFT-900 Gas Accumulator Pad

CES Kimberlina Power Plant October 2012

60MWe Generator

Gas Accumulators

G2S2 SAGD Steam Separator

30MWe Oxy-Fuel Turbine OFJ-79

4” Gas Generator 20MWth

(Inside Biomass Boiler Building)

6MWe Elliott Steam Turbine

(Inside Building)

• CES’ Placerita Power Plant (“PPP”) is a former 120 MWe combined heat and power plant

➯ Located in the hills of the Placerita oilfield, close to Santa Clarita in northern Los Angeles County

➯ CES is also the owner of 38 acres of oil-rich land and mineral rights adjacent to the facility

• Acquired in early 2011 primarily due to its existing infrastructure such as a 120 MWe power interconnect and a gas pipeline interconnect

• PPP allows CES to deploy equipment in a wide variety of configurations while building on existing infrastructure

CES Placerita Power Plant

Company Background

8

CES Technology Overview

9

Contaminated Gas

(CH4/CO2)

Recycle Water

C.W.

Cond .

Fuel Processing

Plant

Air Separation

Plant Air

N 2

Coal, Refinery Residues, or

NG

HP IP LP

CO 2 Recovery

* CH 4 , CO, H 2 , etc.

Excess Water

Direct Sales

HX

Elect Gen.

Multi - stage Turbines

Gas Generator

CO 2

RH

Recycle Water

C.W.

Cond .

Fuel Processing

Plant

Natural Gas Compressor

Air Separation

Plant Air

N 2

Air Separation

Plant Air

N 2

Air Separation

Plant Air

N 2

Coal, Refinery Residues, or

Biomass

Coal Syngas

NG

HP IP LP

CO 2 Recovery

CO 2 Recovery

* CH 4 , CO, H 2 , etc.

Excess Water

EOR

Direct Sales

HX

Elect Gen.

Multi - stage Turbines

Gas Generator

CO 2

RH

Contaminated Gas

(CH4/CO2)

CES Technology ZEPP Generic Cycles

Key Technology

10

CES Technology Platelets

11

• CES Technology: Platelet-Based Fuel Injectors

➯ Hundreds of individual platelets are photo-etched to form 3-D channels

➯ Precisely stacked the platelets get pressure bonded into monolithic structures

➯ Intricate pathways channel bulk fuel, oxygen, and water into hundreds of combustors

➯ Intimate, stoichiometric mixing for complete combustion

CES Technology Oxy-Fuel Combustion Gas Generator

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• CES Technology: Oxy-Fuel Combustors ➯ Gaseous hydrocarbon fuels ➯ Natural gas, associated gas,

recycle CO2

➯ High CO2 content natural gas ➯ Intimate mixing of fuel and

oxygen to provide clean and complete combustion

➯ Producing only steam and high-purity CO2

CES Technology Oxy-Fuel Combustion Gas Generator

• CES 12” GG

• 200MWth capacity

• 15-25MMscfd of CO2 from natural gas

• Up to 500,000lbs/hr of drive gas

• Fuel flexibility

• Full power in seconds

• Combustor: 6’ length/12” dia.

• Packaged in 40’x11’x11’ container

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CES Technology Oxy-Fuel Turbines

• CES Technology: Oxy-Fuel Turbines

➯ Retrofit turbines 1. Removed compressor

2. Thrust balance piston

3. Steam/CO2 intake

4. Operate with steam in gas turbine conditions

➯ GE J79 retrofit to OFJ-79 o Up to 43MWe from 12MWe baseline

o CES design

➯ SGT-900 (W251 B12) retrofit to OFT-900 (SXT-150)

o Up to 150MWe from 50MWe baseline

o CES re-heat combustor

o CES, FTT, Siemens design

➯ Turbines designed for high-quality steam and high CO2-content drive gas

➯ Future turbine potential for new designs matching temperature/pressure profile of CES gas generators

CES OFJ-79

CES OFT-900

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OFT-900 Oxy-Turbine Program

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DOE Contract - Phase 2A:

• Objective: OFT-900 Demonstration

➯Turbine modification and test

➯150 MWe, 15.5 bar, (340 1180 ˚C)

➯ Support systems development

• $43MM Total Budget

➯70/30 Cost Share;

➯$30MM from DOE (ARRA)

• 4-year Project Schedule (Sep 2010-Sep 2014)

➯To finish > 1 year ahead of schedule

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Project Perseus Oxy-Fuel Turbomachinery Development

Main Tasks:

• Finalize OFT-900 Design

• Develop Oxy-Fuel Reheater System

• Purchase, Disassemble & Inspect SGT-900

• Manufacture New Components & Assemble OFT

• Design OFT Test Site

• Upgrade Test Site

• Test OFT-900

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Project Overview Oxy-Fuel Turbomachinery Development

CES Technology OFT-900 Installation at KPP

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19

First Steam to Turbine; 17-Jan-2013

216: Install & Test OFT 900

Platelet Injector Re-Heat Combustors

Burner Body/Platelets

Oxygen Closeout

Fuel Closeout

NG Inlet

Oxygen Inlet

Gas Generator Screen

Combustor Chamber

Igniter

Typical Re-heater Platelet

CES Technology

• CES Re-Heaters replace conventional gas turbine combustor cans

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Reheat Combustor Manufacture

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Manufacture, Assemble & Ship OFT

➯Final assembly of Pathfinder completed Jan-2013

➯Remaining RH manufacture to complete mid-2013

Oxy-Fuel Combustor Development

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Single-Can RH Testing

RH Hot-Fire/Performance Testing ➯Kicked off in May-2012

➯Run times limited by Oxygen and NG supply

➯Experienced delays due to BOP equipment failures

➯Ramped to ~full power

Jan-2013

The Technology Path Forward

O-F

Cyc

le E

ffic

ien

cy

Time

~20-29%

~35-45%

~48-54%

DEPLOYING

DEVELOPING 3rd Generation Oxyfuel Turbines

2015-2020

2005-Today

OFT-900 Combined Cycle

OFJ-79 Combined Cycle

OFJ-79 Peaking Power Plant

KPP 4” Simple Cycle ST

CES Technology

23

Market and Application

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CES Technology Application Universe

Water / Oxygen

CES GG

HRSG

Steam / Gas Turbine

Heavy Oil EOR

Power / Peaker / EOR

/ SAGD

Light Oil EOR / CCS /

Industrial CO2

Multi Stage Turbines + CES

Re-Heater

Geothermal Steam +

Natural Gas

CES Re-Heater

Natural Gas/High-CO2

NG

Renewable Liquids and

Gases

Micronized Petcoke

Emulsified Solutions

Steam/CO2

Steam

CO2

Steam

Power

H2 / Methanol F-T Liquids / Chemicals

CO + H2

Gasification/Synthesis Gas

Surplus Water

25

• TriGen™ / ZEPP / CO2 EOR

➯ Partnership with Maersk and Siemens (licensing and joint development agreements)

➯ Entails utility-scale (200+ MW) base load zero emission power generation, water production, and on-site CO2 for incremental oil recovery

• Heavy Oil Extraction

➯Efficient application of steam to motivate heavy oil extraction through a water and emission neutral process

• Peaking Power

➯ Unique application that capitalizes on the rapid response and low emission potential of the GG

Most Advanced Market Segments

Market Application

26

• TriGen™ intends to harness currently marginal hydrocarbon reserves

• Initially focused in the Middle East/North Africa and Asia to provide

➯ EOR: clean CO2 useable in tapping depleted oil or “fizzy” gas reservoirs

➯ Green power: single unit provides enough power for approximately 125,000 homes

➯ Water: produces large quantities of clean water: ~ 360,000 gallons/day

CO2 EOR / ZEPP – Maersk TriGen

Market and Application

27

Market and Application

GG

Air

Typical CES Oxy-Fuel Cycle – Entry or Pilot Level

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Natural Gas/ Contaminated Gas/

Associated Gas

CO2

Co

nd

ense

r

Excess Water

J79/PT

ASU

Power Output

CW

CW

CO2: 15,000Mscfd Power: 20-30MW Water: 1,000tpd

Typical CES Oxy-Fuel Cycle for ZEPP / CO2 EOR

Market and Application

GG

OFT

HRSG

LP

RH Air ASU

Natural Gas/ Contaminated Gas/

Associated Gas

HP

Co

nd

ense

r

Natural Gas/ Contaminated Gas/

Associated Gas

CO2

Excess Water

Power Output

CW

CW

Power Output

CO2: 50,000 Mscfd Power: 200MW Water: 2,600tpd

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CES Technology Gas Generator / Steam Separator G2S2

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• CES Technology: G2S2

➯ 4” Gas Generator (G2)

➯ Physical separation of water and steam in 20’ Steam Separator (S2)

➯ Consumption of filtered but untreated produced water

➯ 80% quality steam generation

➯ Results in pure, 100% quality steam/CO2 mixture at 1,000psia

Typical CES Oxy-Fuel Cycle for SAGD

Market and Application

GG Air

Natural Gas

Steam/CO2 to Injector

ASU Power

Stea

m/B

rin

e

Sep

arat

or

Basic H2O Treatment

3-Phase Oil Separator

Fuel Blending

Produced Water

Associated Gas

Bitumen from Producer

Bitumen

Courtesy ARC Concentrated Brine

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50%

39%

1%

91%

52%

84%

71%

5%

59%

0%

77%

67%

60%

3%

93%

52%

91%

87%

7%

88%

1%

85%

WECC Fleet Capacity Factors 2012-2036 (1)

Min Max

• US Capacity shift to renewables and gas fired technologies over the next 25 years (1)

• Gas turbines (GT) and combined cycle (CC) growing by 300GW by 2036, due to retirements in coal and gas assets (1)

• During that time renewable capacity expected to triple, mostly from wind, (1) increasing intermittency and grid instability

• Low plant usage during times of high energy costs favors low CAPEX GT solutions

• Response times of typical peaking facilities are too slow to match supply side volatility

Peaking Power – US Market Situation

Capacity Mix Forecast in MW (2012 to 2036) (1)

38,881

-

209,730

136,583

91,401 120,131

98,816

313,926

2012

119,040

9,909

408,058

249,692

49,731

121,132

123,274

193,945

2036

Sources: (1) Black & Veatch presentation, “Western Energy Market Perspective”, March 7&8, 2012.

- Renewables

- Coal - IGCC

- Nuclear

- Combined Cycle

- Combustion Turbine

- Conventional Coal

- Steam Gas & Oil

- HydroCapacity Additions

2012-2035

Market and Application

Supply Curve (1)

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Market and Application

GG

Oxygen from

Storage

CES Peaking Power Plant 40 MWe Net

33

Natural Gas

CO

-Cat

alys

t

To stack

J79/PT

Power Output

Water