earth power - project feasability report
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An economically and environmentallysustainable
infrastructure for Sustainable Regional Development.
Waste to Liquid Fuels ProjectNovember 2009
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Contact Information
Contact Person: Biodun Ogunleye
PowerCap Limited
B39 Eko Court
Kofo Abayomi Street,
Victoria Island, Lagos
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Table of Contents
Table of Contents ............................................................................................................................................ 2
Chapter 1 Introduction .................................................................................................. 3
Overview .......................................................................................................................................................... 3
Project Introduction ........................................................................................................................................ 3
Project Objectives ........................................................................................................................................ 3
Combined Technology Benefits ....................................................................................................................... 4
Chapter 2 The Process ................................................................................................... 5
The Approach .................................................................................................................................................. 5
The Objectives of the Process ..................................................................................................................... 5
The Modular Approach ................................................................................................................................ 5
Process Overview ............................................................................................................................................ 6
The Combined Technologies ........................................................................................................................... 7
The Bio-Reactor ........................................................................................................................................... 7
The AC Plasma Gasifier ................................................................................................................................ 8
The Fischer-Tropsch Synthesis Reactor ....................................................................................................... 9
Carbon Dioxide Capture & Reprocessing .................................................................................................. 10
Chapter 3 Project Financials ..................................................................................... 11
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Chapter 1
IntroductionOverview
This document details a project overview from Earth Power Group (EPG) to manage the municipal waste for
a city of approximately 1.5 million people, and reprocess this waste into high grade transport fuels andchemicals.
Project IntroductionWaste Management is currently a costly and environmentally damaging process. Many towns and cities
have already undertaken some practical steps to reduce their impact on the environment and to reduce the
costs of waste management by recycling wherever possible; however the percentage of waste that is
currently sent to landfill is still much higher than the global targets.
The waste that local municipalities have most difficulty in dealing with is the organic material such as food
waste, nappies and animal by-products. Earth Power Group(EPG)has developed a method of transforming
this waste into a useable product and is able to turn this waste into a valuable revenue stream.
Project Objectives
Th l i t i t d W t R li P i l t d F l & Ch i l F ilit th t di t
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Combined Technology Benefits
The combined technologies will produce the following benefits:
No more waste will be sent to environmentally damaging landfills and open dumpsites; All waste is converted into a valuable resource; Transport fuels will be created with almost no sulphur and no tar; The fuels created are cheaper than traditional fossil fuels; The fuels burn cleaner reducing CO2 emissions and exceed the strict California Clean Air Standards; The fuel can be pressurised allowing for additional mileage from the same fuel tank; The fuels can be blended with existing fuels to enable no changes to existing engine systems; The Gasification system creates no waste or low value fraction; All the technologies used in the system are mature with many years of practical field applications,
precluding the need for extensive testing and market entry delays required by new technologies.
The AC Plasma torch and gasifier was originally developed in the late 1960s, with patented
refinements being developed constantly;
Using the latest thermal transfer technologies, even the waste heat from our systems are used to
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Chapter 2
The ProcessThe Approach
The EPG solutioncan process nearly all waste streams and low value carbon materials. We can manage:
Municipal Solid Waste Agricultural, Commercial & Speciality Waste Hazardous Waste Tyres Sewage Low Grade Oils, Coal & Oil Shale
The Objectives of the Process
Once the waste has been delivered to the waste processing facility, there are 3 main components of the
process, all of which play a part in ensuring the quality control of the end product:
Separation Separating recyclable materials; Transformation Transforming biomass waste into sterile materials; V l C ti Cl T t F l Ch i l & G El t i it
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Process OverviewTo enable you to better understand the interaction between the technologies and the flow of materials the following diagram has been inserted.
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The Combined Technologies
The Bio-ReactorThe concept of waste sterilisation has been in operation for over 80 years. The EPG process uses a straight
through processing sterilisation unit founded upon existing engineering concepts to destroy bacteria in the
waste stream and create long form inert fibrous material which retains its energy value and is then
pelletized for use in the AC Plasma gasifier.
Once processed the problems of bacteria have been removed, moisture and volumes have been reduced,
and the fibrous pellets produced have been engineered specifically to be the most efficient feedstock for
gasification retaining the maximum energy values.
The process is adaptable to a variety of waste materials, and is designed to be accommodated within an
existing building in the city that it serves. This allows for the waste to be managed in the closest proximity
to where it was collected and the reduced volumes of sterilised waste pellets are then sent to a central
gasification facility for energy creation. As many waste streams can be managed by the processing facilities,
economies of scale can be facilitated by managing the municipal, industrial and agricultural wastes in the
same manner.
This allows for a regional approach to waste management, and provides cost savings to the local
governments through a consolidated waste strategy.
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The AC Plasma Gasifier
Gasification is a technology where a hydrocarbon (i.e. coal, coke-petcoke, or biomass) feedstock is inserted
into a high temperature pressurized reactor until the chemical bonds of the feedstock are broken. The
resulting reaction produces a synthetic gas known as synthesis gas (syngas). The syngas is cleansed to
remove impurities such as sulphur, mercury, and other possible inorganic contaminates. (Carbon dioxide,
hydrogen, nitrogen, and oxygen can be separated or removed at this stage.)
EPG Gasifiers use a patented AC Plasma Torch as a heat source. They operate at normal atmospheric
pressure, have an electrical energy to heat energy conversion efficiency of well over 90%, and these systems
can also operate on a full range of mixed and single type feedstock. They are highly controllable thermo-
chemical reactors. Most importantly the creation of the syngas has zero negative environmental impact .
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The Fischer-Tropsch Synthesis Reactor
The Fischer-Tropsch (FT) process, with coal as a feedstock, was
invented in the 1920's and used by Germany during World War II. It
has been utilised in South Africa for decades by SASOL supported by
the Witwatersrand University. Today, it is also used in Malaysia and
the Middle East with natural gas as the feedstock.
To date, the major drawbacks to the Fischer-Tropsch Synthesis (FTS)
have been the high capital and operational & maintenance costs
which require the frequent need to replace the catalysts as a result
of impurities in the produced syngas and the presence of oxygen.
These issues have been resolved by the EPG combined solution. The proprietary improvements our group
has made on the Fischer-Tropsch (FT) and AC plasma gasification technologies has reduced the capital cost
of the technologies by more than two thirds, and increased current overall efficiency by more than 40%.
These improvements allow EPG to produce FT fuels or DME fuels (Synthetic crude oil) for less than US$20
per barrel. These fuels are far superior to their naturally resourced petroleum counterparts.
What is Fischer-Tropsch?
The FTS is a catalysed chemical reaction operated in a
reactor. Efficient and rapid removal of heat from the
highly exothermic FT reaction from the catalyst particles
is an important factor for the design of an FT reactor. The
h h d ddl d ll d
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Carbon Dioxide Capture & Reprocessing
The EPGprocess has recently been designed to capture all CO2 produced from the process. Not only will this
add significant environmental benefits to the process, but additional revenues will be generated byconverting this CO2 into a range of higher alcohols & chemicals including but not limited to Methanol,
Dimethyl-ether (DME), Olefins, Plastic and Ammonium.
The industrial uses of the above chemicals and alcohols are widespread, however EPG will discuss with local
chemical and fuels companies to determine the outputs that are required for the local market. The
chemicals and alcohols produced will enhance the revenues and environmental reputation of the local
companies involved.
The Process of Higher Alcohol & Chemical Production from available CO2
The chemistry of this reaction is the chemical combination of carbon dioxide and hydrogen in the presence
of a catalyst. Carbon dioxide is present in high concentrations in the gases of the Flue gas/waste heat fuelled
CO generation equipment and in our gasification to FischerTropsch system as well as other various exhausts
from the mini refinery.
Earth Powerknows that having a method for safely disposing of carbon dioxide so that it does not enter the
atmosphere, is of significant environmental benefit. Aside from the ecological benefit of removing carbon
dioxide from the atmosphere, it produces major economic benefits. It is also beneficial to conduct chemical
recycling of carbon dioxide as this would provide an inexhaustible carbon source for producing fuels and
synthetic hydrocarbons. This has always been the Earth Powergoal of economic sustainability, while at the
same time mitigating global climate change that is caused or affected by the increase of carbon dioxide in
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Chapter 3 Project Financials
Each processing plant operates on generating revenue streams from every waste stream, ensuring nothing is
sent to landfill and value is recovered. The following figures have been used in preparation of the project
financials.
Calculation of the Volumes
Waste to Pellets
The conversion we have used for generating the waste to pellets conversion for this project is 55% due to
the high percentage of organic waste in the waste stream. This means that 1 tonne of waste is transformed
into 550kg of inert pellets, as shown below.
Water/Moisture: 320kg. The water is recovered and purified for re-use. Metals: 40kg. The Metals is recovered, batched and sold for recycling. Glass: 90kg. The Glass is recovered, cleaned and sold for recycling. Organic, Paper & Plastics: 550kg. This is processed into pellets and sent for energy conversion.
FT Fuels
The Mass balance for the process which provides the detailed chemical conversion information has been
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Daily Product Output Calculations
Whilst the fractions that are produced can be modified to suit the market need. The fractions that have been
calculated through the system on a daily basis from the project are as follows:
Product Output Barrels per Day
FT Fuels
Diesel 51% 753
Gasoline 29% 428
Kerosene 16% 236
Lubricants 3% 44
Heavy Lubricant 1% 15
Total FT Fuels 100.00% 1,475.92
Higher Alcohols
DiMethyl Ether (DME) 50% 2,158
Methanol 50% 2,158Total Higher Alcohols 100% 4,315.57
FT Gases
Butane 50% 129
Propane 50% 129
Other Gases
Oxygen N/A 863
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Revenues per UnitThe following table shows the market prices that have been used to generate the revenues for this project.
Waste Revenues Per Ton
MSW Gate Fee $0
Carbon Credit Value per Ton Processed $15
Recyclables Per Ton
Sale Price of Avg Plastics / ton $75
Sale Price of Cardboard / ton $35
Sale Price of Print Paper/ton $30
Sales Price of Aluminium/ton $1,200
Sales Price of Stainless Steel/ton $1,700
Sales Price of Carbon Steel/ton $300
Sales Price of Copper/ton $5,400
Sales Price of Clear Glass / ton $26
Sales Price of Coloured Glass / ton $18
Sales Price of Ceramic Glass / ton $20Oil Market Per Barrel
NYMEX Crude Oil (Futures August 2009) $63.46
Refined Product Outputs Per Barrel
Diesel $91.38
Gasoline $91.38
Kerosene $91.38
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Annual RevenuesThe following table details the annual revenues generated from the project.
Revenue Stream Per Annum % of Revenues
Gate Fee $- 0%
Synthetic Fuels $55,727,041 23%
Gases & Oxygen $11,627,530 5%
Higher Alcohols & Chemicals $110,028,399 46%
Electricity $18,446,400 8%
Product Manufacture $24,042,260 10%
Recyclates (Glass, Metals etc) $12,883,984 5%
Carbon Credits & Energy Credits $9,024,725 4%
Total Revenues $241,780,339 100%
Plant Capital and Implementation CostsThe cost of the proposed Earth Power Waste to FT Fuels facility for this project is shown below.
Waste Processing Facility
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Plant Operating Costs
The following table shows the estimated Annual Operating Costs of the Facilities.
Operating Costs Per Annum
Total Staff & Central Costs$16,094,802
Total Material Costs$-
Total Professional Fees & Insurance
$497,677
Total Ancillary Operating Costs$291,323
Total Maintenance Costs$15,277,042
Total Operating Costs$32,160,844
Staffing Levels & Salaries
It is projected that the following numbers of staff will be employed within the facilities implemented. The
salary levels have been estimated, and will require validation from local market sources at the appropriate
time.
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Staffing Levels per Shift at all Facilities
Employees Staff Salaries
Gasification FacilityQty of Staff Total Salaries
Shift Supervisor A 1 $14,880
Control Room Technician B 2 $22,320
Material Handler D 3 $15,624
Operator (Gasifiers) D 3 $15,624
Mechanic (General) C 3 $33,480
Mechanic (Controls) C 3 $33,480
Totals 15 $135,408
FT Fuels Facility Qty of Staff Total Salaries
Shift Supervisor A 1 $14,880
Control Room Technician B 3 $33,480
Material Handler D 3 $15,624
Operator D 3 $15,624
Mechanic (Controls) C 3 $33,480
Totals 13 $113,088
Carbon Reprocessing Facility Qty of Staff Total Salaries
Shift Supervisor A 1 $14,880
Control Room Technician B 4 $44,640
Material Handler D 4 $20,832
Operator D 4 $20,832
Mechanic (General) C 4 $44,640
Totals 17 $145,824
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P a g e | 17 16th October 2009
Project TimescalesThe following chart has been included as an indication of the approximate timescales for the project.
Project Timescales
(Months)1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Front End Planning
Project Evaluation
& Project Initiation
Project Design
Equipment
Manufacture
On Site
Construction
Test & Operational
Readiness
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P a g e | 18 16th October 2009
Revenue Projections by TypeThere are many sources of revenue that can be generated from the Earth Power process. The revenue generated by this project is shown below by type of
revenue generated.
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P a g e | 19 16th October 2009
Summarised Financial Statement
Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Fund structure
Investment - equity 61,108,169$ 15,277,042$
Investment - Loan 244,432,675$ 61,108,169$
Investment - Total 305,540,843$ 76,385,211$
Debt Financing
Loan 244,432,675$ 329,984,111$ 302,485,435$ 274,986,759$ 247,488,083$ 219,989,407$ 192,490,731$ 164,992,055$ 137,493,379$ 109,994,704$ 82,496,028$ 54,997,352$ 27,498,676$ -$ -$
Amortization -$ 27,498,676$ 27,498,676$ 27,498,676$ 27,498,676$ 27,498,676$ 27,498,676$ 27,498,676$ 27,498,676$ 27,498,676$ 27,498,676$ 27,498,676$ 27,498,676$
Interest 14,849,285$ 13,611,845$ 12,374,404$ 11,136,964$ 9,899,523$ 8,662,083$ 7,424,642$ 6,187,202$ 4,949,762$ 3,712,321$ 2,474,881$ 1,237,440$ -$ -$
Debt Repayment 42,347,961$ 41,110,520$ 39,873,080$ 38,635,640$ 37,398,199$ 36,160,759$ 34,923,318$ 33,685,878$ 32,448,438$ 31,210,997$ 29,973,557$ 28,736,116$ -$ -$
Revenues
Total revenues -$ 181,759,067$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$
Ebitda
Operational costs -$ 24,173,634$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$Ebitda -$ 157,585,433$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$
Amortization/Depreciation
Depreciation -$ 29,378,927$ 29,378,927$ 29,378,927$ 29,378,927$ 29,378,927$ 29,378,927$ 29,378,927$ 29,378,927$ 29,378,927$ 29,378,927$ 29,378,927$ 29,378,927$ 29,378,927$ 29,378,927$
Real depretiation(*) 29,378,927$ 28,662,368$ 27,963,286$ 27,281,255$ 26,615,858$ 25,966,691$ 25,333,357$ 24,715,470$ 24,112,654$ 23,524,540$ 22,950,771$ 22,390,996$ 21,844,874$ 21,312,072$
Income Tax
(+) Net Revenues -$ 181,759,067$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$ 241,780,339$
(-) Operational costs -$ 24,173,634$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$ 32,160,844$
(-) Interest -$ 14,849,285$ 13,611,845$ 12,374,404$ 11,136,964$ 9,899,523$ 8,662,083$ 7,424,642$ 6,187,202$ 4,949,762$ 3,712,321$ 2,474,881$ 1,237,440$ -$ -$
Gross profit -$ 113,357,221$ 167,345,282$ 169,281,805$ 171,201,277$ 173,104,113$ 174,990,721$ 176,861,495$ 178,716,823$ 180,557,079$ 182,382,633$ 184,193,843$ 185,991,058$ 187,774,621$ 188,307,422$
(-) Corporation Tax -$ 11,335,722$ 16,734,528$ 16,928,180$ 17,120,128$ 17,310,411$ 17,499,072$ 17,686,150$ 17,871,682$ 18,055,708$ 18,238,263$ 18,419,384$ 18,599,106$ 18,777,462$ 18,830,742$
Net Profit -$ 102,021,499$ 150,610,754$ 152,353,624$ 154,081,149$ 155,793,702$ 157,491,649$ 159,175,346$ 160,845,140$ 162,501,371$ 164,144,370$ 165,774,459$ 167,391,952$ 168,997,159$ 169,476,680$
Free Cash Flow
(+) Ebtida -$ 157,585,433$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$ 209,619,495$
(-) BNDES Repayment -$ 42,347,961$ 41,110,520$ 39,873,080$ 38,635,640$ 37,398,199$ 36,160,759$ 34,923,318$ 33,685,878$ 32,448,438$ 31,210,997$ 29,973,557$ 28,736,116$ -$ -$
(-) Investment - Equity 61,108,169$ 15,277,042$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
(-) Corporation Tax -$ 11,335,722$ 16,734,528$ 16,928,180$ 17,120,128$ 17,310,411$ 17,499,072$ 17,686,150$ 17,871,682$ 18,055,708$ 18,238,263$ 18,419,384$ 18,599,106$ 18,777,462$ 18,830,742$
NET Cash Flow -61,108,169$ 88,624,708$ 151,774,446$ 152,818,234$ 153,863,728$ 154,910,884$ 155,959,664$ 157,010,027$ 158,061,935$ 159,115,349$ 160,170,234$ 161,226,554$ 162,284,273$ 190,842,033$ 190,788,753$
(*) The real value of depreciation in the long run
The Financial summary shows that the Internal Rate of Return is 182%. The facility can generate an EBITDA in excess of $200 Million per annum. Over the 40 year
operational-life of the facility the profit potential from such a plant is anticipated to be in excess of$4billion, therefore the capital return on this investment during this
period is exceptional. The detailed financials that have been used in the creation of the Financial summary are available for full review, as required.
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