earth power - project feasability report

8/2/2019 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




Operator D 3 $15,624

Mechanic (Controls) C 3 $33,480

Totals 13 $113,088

Carbon Reprocessing Facility Qty of Staff Total Salaries




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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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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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.

earth power - project feasability report

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