How VEECs reward bioenergy

projects in Victoria

Sydney, 22 November 2017

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Agenda

• About us

• Challenges for bioenergy developers

• Biomass opportunity for industry

• Certificate summary

• Emissions Reduction Fund (ACCUs)

• Renewable Energy Certificates (LGCs, STCs)

• Energy Savings Scheme (ESCs)

• Victorian Energy Upgrades (VEECs)

• Examples

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About Wattly & Northmore

Gordon

• Wattly: helps business and householders unlock funding

from government schemes for energy and carbon

projects

• Accredited Certificate Provider

• ~2.5 million certificates (VEEC, ESC, STC, LGC, ACCU)

• $50m in funding

• Northmore Gordon: helps industry and large

commercial business reduce energy costs by 30%

• Energy efficiency

• Bioenergy

• Solar 3

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Challenges for bioenergy

developers• Fuels can be diverse, difficult, or disappear

• Every project is unique

• Everyone wants to be second

• Payback is too long

• Technology isn’t trusted

• Regulators don’t understand it

• Permitting is a problem

• Biomass invites concerns over social licence

• So…

• Complexity kills deals

• Money does not like uncertainty

• Traditional sources of debt or project finance are hard to find

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The Biomass opportunity

• ARENA Study “Renewable

energy options for

industrial gas users”

• $2.4bn spend on

gas for industry

• Gas is $6-$20+ / GJ

• Biomass is $-ve to $12+/GJ

• Best suited to high temperature

thermal loads

• Steam

• Hot water

• Power generation 5

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Major long term schemes

LRET

• For renewable electricity projects such as biogas power generation, embedded biomass STG, or solar PV.

• Uncertain LGC price outlook for current projects.

• Can create annually to 2030

SRES

• Solar PV <100kW

• Solar thermal unlimited size

• Allows forward creation of STCs to 2030.

ERF

• Broad scope captures GHG emissions reductions not eligible for above programs, i.e. any state.

• Potential for ACCU market to grow as Safeguard Mechanism of ERF comes into force, and following Paris?

• E.g. biogas flaring, biomass boilers for heat

ESS• Electricity or gas saving projects in NSW (but you can’t create ESCs by using biomass instead).

VEET• Electricity or gas saving projects in VIC (non-EREP sites), and CAN create VEECs by using biomass

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Renewable Energy Target

• Certificates

• Large-scale Generation Certificates (LGCs)

• Small-scale Technology Certificates (STCs)

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Emission Reduction Fund

• Certificate = Australian Carbon Credit Unit (ACCUs)

• Methods

• Agriculture

• Energy Efficiency

• Facilities

• Mining, oil and gas

• Transport

• Vegetation Management

• Waste and wastewater

Register ProjectRun project, report, audit

Claim ACCUs

Hold or sell ACCUs

•Fed Govt

•Secondary market

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Emissions Reduction Fund

• $2.2 billion committed, $300 million remaining, 189 million tonnes CO2e

• Example biomass projects:

• Biogas to electricity - Piggery anaerobic digestion

• Biogas flaring – Piggery

• Refuse derived fuel – Cement plant

• Organic food source-separation – avoiding landfill methane9

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Energy Savings Scheme

ACCREDITED Person (ACP)

Creates certificates and sells to Liable Parties

Liable Party -Registered Certificate holdings

ENERGY RETAILERS

Buys certificates at most competitive prices

Pays $$ for registered certificates

Customer assigns certificate rights ACP –

Certificates Pending

Registration

ACP –Certificates

fully registered

ACP sells registered certificates

Aggregates and submits certificates for creation

ELECTRICITY CUSTOMERS

Every customer pays a little bit extra on each bill $$

Pays $$ for completed paperwork after project is done

ELECTRICITY CUSTOMERS doing energy

projects

AD

MIN

ISTRA

TOR

/REG

ULA

TOR

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VEECs for biomass heating

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30/06/2017 Blue lake Milling – Technical Proposal rev 0 / 1. 08841 Page 1 / 41

Technical Proposal

FOR A 14 TPH OAT HULL FIRED STEAM BOILER

1.08841

30/06/2017

A SOLUTION FOR

• Biomass to replace natural gas in Victoria

• Baseline:

• 5 MWth average load

• 5,000 hour p.a. operation

• 106,000 GJ of natural gas p.a.

• $1m of natural gas at $10/GJ

• With biomass

• $500k of biomass at $5/GJ

• 5,850 tonne CO2e saving p.a.

• VEECs @$14 each (net after fees) for 10 years

• Max VEEC benefit = $819,000 within 1 year

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VEECs for Biomass cogen

• Biomass cogeneration

• Baseline:

• 2 MWe engine / 1.5 MWth thermal

• 5,000 hour p.a. operation

• 82,000 GJ of natural gas p.a.

• $820k of natural gas at $10/GJ

• With biomass wood gas

• $500k of biomass at $5/GJ

• 1,350 TCO2e saving p.a. from heat recovery / 10,000 MWhe

• VEECs @$14 each (net after fees) for 10 years

• LGCs @ $60 each (net after fees) for 4 years

• VEEC (heat recovery) benefit = $189,000, 1y after start

• LGC benefit = $600,000, over 4 years

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Your AirClean Representative: Craig Morgan Northmore Gordon +61 1300 854 561 craig@northmoregordon.com

Blue Lake Milling c/o Energy Action Page 4 of 14 ACQ-17135-BLM

6/27/2017 Confidential and Proprietary Information of AirClean Technologies, Inc.

Copyright © 2017 AirClean Technologies, Inc. All Rights Reserved

Proposal: ACQ-17135-BLM

2.0 TURBINE SELECTION For your application, we have selected an SST-110, dual steam turbine. This unit has two separate turbine wheels which turn a centralized shaft which operates the generator. This unit has the advantage of being both highly efficient for its size and designed to accommodate the extraction steam you require of 500 kg/h.

SST-110 Dual Turbine

Backpressure Steam Turbines

Stage #1

Mass flow 15000 kg/h

Inlet pressure 29 bar(a)

Inlet temperature 380 °C

Extraction pressure 11 bar(a)

Extraction temperature 292 °C

Stage #2

Mass flow 14500 kg/h

Inlet pressure 11 bar(a)

Inlet temperature 292 °C

Exhaust pressure 0.15 bar(a)

Exhaust temperature 54 °C

Generator Performance

Outlet speed 1,500 RPM

Estimated power at terminals 2,440 kWe This system includes:

• Siemens SST-110 dual turbine drive • 2.5 MWe Generator • Control panel with a complete PLC based

turbine steam control scheme • Quick acting inlet trip valve • Bearing temperature monitoring • Vibration monitoring for gearbox housing

and generator bearings • Skid mounted water-cooled forced

lubrication system • Turbines mounted on a structural steel

base plate • All skid piping and wiring brought to edge

of the skid for a single point of connection

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The VEEC process is

complicated

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Spot prices

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Contacts

• Craig Morgan (Director)Mob: 0448 119 979

Email: craig@wattly.com

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