Case 2:17-cv-00077-JDL Document 6-1 Filed 02/28/17 Page 1 of 8 PageID #: 75 D. Project Description – Penobscot Biorefinery 1. Executive Summary: Nature of the Project: Construction of a Biorefinery for Production of Second Generation Renewable Biofuels on Stored Solar EMEP site in East Millinocket – Maine. Motivation of the Applicant The primary goal of the applicant is to re-purpose the facility at East Millinocket, build a biorefinery, refurbish the steam plant and the power plant and execute all necessary works to attract energy co-hosts in other related activities and ensure a high energy efficiency facility on the Energy Park. Scope of the Project This project benefits from the opportunity of re-purposing the former East Millinocket paper and pulp mill to construct and operate a IH² hydrotreating pyrolysis technology that converts forest biomass into a “drop in” ready fuel in the form of bio-crude or diesel, gasoline and jet fuel and maximize the overall added value. This approach requires the efficient, valued-added use of the entire biomass stream, generating near-zero waste. Key metrics of the Project Applicant Sponsors Location Available surface area Required surface area for the Project Logistics access to the site Feedstock (s) Feedstock volume Capacity Primary Products Diesel Gasoline Secondary product GHG Reduction Anticipated Job Creation Point of Contact Stored Solar LLC Capergy US LLC (lead) State of Maine DECD Gardner Companies East Millinocket, Maine 230 acres owned by a subsidiary of Capergy US LLC 80 acres Rail, road (I-95) and waterway (Penobscot River to coast) Forest biomass, hard & soft woodchips, bark, branches, saw mill waste, etc. 355,000 dry metric tons of forest biomass per year, 1000 dry metric tons per day 92,000 gallons per day of biofuel liquids Bio fuel liquids: biodiesel and gasoline EN 590 (ASTM SPEC) EN 228 (ASTM SPEC) Biochar Up to 95% reduction versus fossil product for biodiesel liquids, based on Life Cycle Assessment report by MICHIGAN TECHNOLOGICAL UNIVERSITY (see appendix E2d) 102 Full time jobs in the biorefinery including the biomass plant system and during the 24-month construction period up to: • 1,020 direct project development/onsite labor and technical positions, • 866 indirect construction services, support and supply jobs, and • 652 induced jobs in local community (Penobscot County; Maine Congressional District #2) William HARRINGTON, Stored Solar LLC (219) 712 4764 bharrington@storedsolarllc.com 1 Applicant requests, as business proprietary, to restrict the use and disclosure of all data submitted in the Application Case 2:17-cv-00077-JDL Document 6-1 Filed 02/28/17 Page 2 of 8 PageID #: 76 Project Description “A biorefinery is not a new concept; many traditional users of biomass, sugar, starch and pulp industries, run biorefineries today. However it is the rapid expansion in biofuel production and the need to derive value from all the co-products which is driving the development of modern biorefineries at the moment. To be a viable proposition, the production of bio-based energy, materials and chemicals alongside biofuels should improve the overall economics of biorefinery operation and, in some cases, may even be the primary revenue stream”. In line with the above IEA Bioenergy Task 42 definition of a biorefinery that “allows it to be viewed as a concept, a facility, a process, a plant or even a cluster of facilities”, the overall goal of the Penobscot Biorefinery project is to design, build, and operate a full scale biofuel plant that will produce, from a variety of lignocellulosic feedstocks, 92,000 gallons per day of clean, and zero sulfur renewable biofuels offering the State of Maine an alternative to existing petroleum-based diesel. An important technical differentiator is that this system can accommodate waste from the forest feedstock (bark, saw dust, etc.). The process by-product (biochar) will be, in priority, fed to a biomass boiler on site to cover 100% of the biorefinery feedstock heat needs, namely consisting of drying the biomass from 50% to 20% and heating the offices and indoor occupied area. The Penobscot Biorefinery, uses in its first stage, a bubbling fluidized bed reactor where oxygen and water are removed and hydrogen with catalyst are added. The biochar and the gas are then separated. The gas is fed into a second stage reactor that is a fixed bed reactor before it passes through a 3rd stage upgrade and distillation column to become “drop- in” ready fuel out of this process. The light gases from the process are fed into a methane reformer that produces renewable hydrogen used in the process. This closed loop exothermic process operates on lower temperature than similar ones and will allow the use of the excess heat to be used by other co-hosts on the same facility. The project will use forest biomass from the Penobscot County wood basket that has suffered the loss of over 3 million tons of biomass consumption with the closing of multiple paper and pulp mills (Millinocket, East Millinocket, Lincoln, …) due to the worldwide decline in the demand for certain types of paper, this provides the project an opportunity to repurpose a distressed asset and benefit from its existing features (Rail access, water access, highway access, connection to the NE ISO grid, direct access to the 97-mile Golden Road, etc.) thus significantly reducing the total project costs (namely for the infrastructure) as well as the permitting timeline for the construction of the biorefinery. The Penobscot Biorefinery project consists of the process technologies and equipment for biomass handling and pre-treatment system, Hydropyrolysis, Hydroconversion and Hydrogen Reforming processes as well as liquid fuel storage, loading equipment, and integration of the required energy and utilities. The core innovative technology, the IH2 TM process is developed and provided by CRI Catalyst Company headquartered in Houston, TX, USA in conjunction with the Gas Technology Institute in Des Plaines, IL, USA. It uses an integrated process of Hydro-pyrolysis followed by Hydro-conversion to convert cellulose and wood in a mixture of light hydrocarbon gases (C1 - C3) and paraffinic hydrocarbon liquids. This mixture can be further treated at a third stage process to remove any remaining traces of aromatic compounds. The mixture is then fractionated to combustion products comprising of gasoline, kerosene and diesel. The end products are of high quality biofuel that is readily useable as a blend stock. The 2 Applicant requests, as business proprietary, to restrict the use and disclosure of all data submitted in the Application Case 2:17-cv-00077-JDL Document 6-1 Filed 02/28/17 Page 3 of 8 PageID #: 77 technology has been demonstrated and proven at the demonstration plant level by GTI with over 5,000 continuous operational hours at a 5 kg of feedstock per day level. Commercial feasibility of the technologies The technologies have gone from a small scale lab pilot of 0.02 liters per day to a larger lab pilot of 1 liter per day, to a demonstration plant of 22 liters per day. Incentive alignment The Maine biomass stakeholders (Landowners, loggers, lumber saw mills and trucking professionals, biomass power plant operators, paper and pulp mills…), with the support of the State Government, have demonstrated successful collaboration to join forces for the Maine biomass industry revitalization initiative. The present loan solicitation to DOE illustrates how all these parties can work for a common goal of creating domestically available renewable energy to reduce U.S. dependence on oil and decreasing the carbon footprints in Maine. One of the powerful features of this project is that the biomass suppliers are equity participants which assures a long-term alignment of interest. As per enclosed Pierce Atwood letter (Appendix D1a): “The Fund is being organized as a Maine limited liability company, investors in which are expected to include the Fund’s sponsors and many Maine-based businesses with various interests in or relationships to Maine’s biomass industry including landowners, forestry and biomass plant owners and operators, and others with an interest in the industry (“Biomass Interests”). The Fund’s sponsors are in the process of soliciting interest in the Fund from these Biomass Interests, several/numerous of which have signed a Statement of Concept and Cooperation (see section D60) in support of the initiative described in the Application, as shown in the attached list (see appendix D6 for executed Statements of Concept and Collaboration).” 3 Applicant requests, as business proprietary, to restrict the use and disclosure of all data submitted in the Application Case 2:17-cv-00077-JDL Document 6-1 Filed 02/28/17 Page 4 of 8 PageID #: 78 Key design features include: - - - Highest quality ASTM-grade fuel Conversion of a wide range of biomass feedstock (Hard wood, soft wood, bark, lims, leaves, sawmill wood waste) Methods for the production of hydrogen allow higher process efficiency. Easier control and direction of the process on the selected fuel products (bio-crude, diesel, gasoline, jet fuel) as needed based on market conditions or our off-take agreement Lower operating cost due to lower operating temperature of the process Potential Impacts The technologies being demonstrated through this project are scaled to fit within the EMEP cluster existing industrial infrastructure. The approach is cost-effective, scalable and transferable to hundreds of other locations in the US. Maine’s unique advantage is its immediate ability to replicate this biorefinery to other locations within the State, achieving DOE’s goal of multiple deployment and full scale commercialization. 4 Applicant requests, as business proprietary, to restrict the use and disclosure of all data submitted in the Application Case 2:17-cv-00077-JDL Document 6-1 Filed 02/28/17 Page 5 of 8 PageID #: 79 Key features of the Penobscot Biorefinery include: Most Biomass projects suffer from price volatility in, both feed-stock and off-take, plus high start-up and processing costs. This project has significant competitive advantages for all four: 1. Start-up costs: We have obtained a pulp and paper site and facilities recently shut down due to foreign competition in the paper markets. Costs to construct our facility will be considerably lower than any greenfield effort could be. And there are many of these sites available. 2. Processing: Our core technology has been tested and vetted by DOE, GTI, and several industrial companies. It is ready for commercial deployment. 3. Feed-stock: One of our most significant equity partners is also one of the most experienced and integrated forestry supply companies in Maine. It is both in their capability and best interest to supply feed at the most competitive prices. And due to exit of the paper industry from Maine, the supply of low cost wood is expected to be in over-supply for decades. 4. Off-take: For a variety of reasons, the characteristics of our biodiesel makes it attractive to a wide range of fuel related consumers and blenders. As a second-generation bio-fuel we have a 15 year off-take at floor prices that provide a very high return. Additionally, we have multiple buyers interested in more fuel than we could supply. All of these factors combine to result in a rather unique, potentially very successful proof of a new, innovative technology to produce cost competitive bio-fuels. Key Target dates • • • • • • • • • • • • Purchase of the property Maine DECD agreement of sponsorship Completion of initial environmental assessment for site acquisition List of valid permits from Maine DEP Basic Engineering FEL2 package Conditional Commitment from DOE Finalization of Off-take agreement Financial close of the Loan Guarantee Agreement: Detailed Engineering FEL3 package Commencement of site preparation and construction: Commercial operation: Commence delivery of biofuel: June 2016 July 2016 August 2016 September 2016 March 2017 June 2017 July 2017 September 2017 November 2017 4th quarter 2017 4th quarter 2019 1st quarter 2020 5 Applicant requests, as business proprietary, to restrict the use and disclosure of all data submitted in the Application Case 2:17-cv-00077-JDL Document 6-1 Filed 02/28/17 Page 6 of 8 PageID #: 80 1. PROJECT LOCATION DESCRIPTION The selected location of Penobscot Biorefinery is on the currently idled East Millinocket site formerly owned by Great Northern Paper Company, and currently being transferred from North American Recovery Management to EMEP LLC. The site is being re-purposed by its owner into an Energy Park, called East Millinocket Energy Park (EMEP). It includes 230-acre land as well as several mill buildings, (“The Site”) namely: 1. 2. 3. 4. 5. 6. Reclaim Building Mill Buildings Finishing Area Office Building Fuel Storage Building Other Miscellaneous Buildings EMEP LLC is a joint company between Capergy and Gardner Companies. The re-purposed overall site is converted into an Energy Park that will primarily use forest biomass for the Penobscot Biorefinery project, and potentially the 2 to 3 million tons feedstock of the nearby Dolby biomass landfill to generate electricity, while mining and cleaning the landfill in order to avoid further pollution of the aquifers by the leachate. It is scheduled that the EMEP 30MW power plant be re-fired as a combined heat and power plant, to benefit from sustainable synthetic Thermal Energy Purchase Agreements (TEPA) revenues as well as REC’s from Massachusetts or other neighboring states that focus on energy efficiency. ____________________________________________________________________________________________ Applicant requests, as business proprietary, to restrict the use and disclosure of all data submitted in the Application Page 1 Case 2:17-cv-00077-JDL Document 6-1 Filed 02/28/17 Page 7 of 8 PageID #: 81 The rest of the site is being upgraded and developed by the owner (EMEP LLC) to attract hosts for competitively priced by-products, such as hot water, steam, chilled water and CO 2 . The current potential co-hosts on EMEP site are: • Penobscot Refinery • Nature Fresh greenhouse • Chop Sticks manufacturing facility • C5 and C6 extraction process from Biomass The Penobscot Biorefinery project would be the corner stone of a sustainable biomass use in the State of Maine and would potentially help the biomass players recover the levels of feedstock consumptions they have lost with the shutdown of the pulp and paper as well as power generation industries. ____________________________________________________________________________________________ Applicant requests, as business proprietary, to restrict the use and disclosure of all data submitted in the Application Page 2 Case 2:17-cv-00077-JDL Document 6-1 Filed 02/28/17 Page 8 of 8 PageID #: 82 The support of the DECD of the State of Maine is motivated by the fact that properly maintained forests regrow over years, and their very presence helps remove greenhouse gases from the atmosphere. Biomass is, in the long view, carbon neutral, as it encourages sustainable woodland management. In that way, the industry can help keep the Maine forests healthy, and the communities and businesses that rely on those forests keep their jobs and their prosperity. The contemplated location of the Penobscot Refinery project is situated on the East Branch of the Penobscot River where in 1907, Garret Schenck and Charles W. Mullen built their third paper mill in Maine. East Millinocket paper mill also had its own dam and hydroelectric facility. East Millinocket and Dolby facilities are located 2.5 miles from each other and about 3 miles from I-95 north of Bangor. Both facilities are equipped with rail access. Both were built and managed by Great Northern Paper Company. Penobscot Refinery project location is situated on the 97-mile Golden Road in Maine therefore accessible to woody biomass, which gives fuel supply security to the Penobscot Biorefinery project. ____________________________________________________________________________________________ Applicant requests, as business proprietary, to restrict the use and disclosure of all data submitted in the Application Page 3