Biomass derived energy Southwest KS Project Sector Eléctrico Biomass derived energy Southwest KS Project Kansas Renewable Energy Conference September 25-26, 2007 Topeka KS Thomas W. Robb, Ph.D. Abengoa Bioenergy R&D

Sector Eléctrico Abengoa Bioenergy www.abengoabioenergy.com

Abengoa overview Sector Eléctrico Abengoa is a technological company that applies innovative solutions for sustainable development in infrastructures, environment and energy sectors. It is present in over 70 countries where it operates through its five Business Units: Solar, Bioenergy, Environmental Services, Information Technology, and Industrial Engineering and Construction.

CO2 – Industrial applications Sector Eléctrico Abengoa Bioenergy Business Abengoa Bioenergy Ethanol production from vegetal raw materials (cereal and biomass) Renewable Biofuel Null CO2 emissions DGS – Animal feed Cereal CO2 – Industrial applications ETBE Ethanol Direct blending Biomass Hydrogen Bioproducts

Technology based in fermentation of sugars Sector Eléctrico Production Process Technology based in fermentation of sugars Sugar (glucose)+ Air CO2 + Ethanol C6H12O6 + O2 3 CO2 + 3 C2OH6 Yeast Used feedstock is transformed into sugars, the process would change depending on the chemical composition: Sugar beet or sugar cane: direct fermentation Cereal: starch, previous saccharification (enzymes) Lignocellulosic biomass: cellulose and hemicellulose. Hydrolysis to break long chains and produce C6 and C5 sugars Level of Complication Feedstock price Each feedstock yields different co-products

Production Processes Feedstock Preparation Transformation into sugars Sector Eléctrico Production Processes Feedstock Preparation Transformation into sugars Fermentation Distillation Collection Sugar case Milling and filtering C6 Cereal case Cooking Saccharification Liquefaction Milling Feedstock cleaning Lignocellulosic Biomass case Conditioning Separation L/S Termochemical hydrolysis 2nd Enzymatic Hydrolysis C5

Feedstocks Abengoa Bioenergy Goals Sector Eléctrico Feedstocks Abengoa Bioenergy Goals Promote development of seeds with improved characteristics to establish win-win contracts with farmers, link certified seeds to the contracts. Abengoa Bioenergy is establishing strategic alliances with seeds companies to develop/improve specifics crops Promote better agronomic practices under long term contracts to increase farm income Promote energy crops for ethanol production Abengoa Bioenergy is working closely with research centers to promote the development of crops for ethanol production. Abengoa Bioenergy is helping governments define policies and R&D programs to promote energy crops.

Sector Eléctrico Feedstocks Objective Taylor made energy crops for the different conversion pathways and for particular regions ensuring sustainability and environmental quality. Main crops characteristics: Domestic crops, high starch and biomass yields per hectare, stress tolerances (abiotic, disease…) Minimum inputs maintaining sustainability Composition to maximize the ethanol Ensure sustainability and environmental quality (from…analysis of microbial communities underlying soils… to formulation of management guidelines for biomass removal)

Technology Cereal technology – current situation Sector Eléctrico Technology Cereal technology – current situation All Abengoa Bioenergy plants are currently running on cereals Yields varying depending on cereal used DDGs produced containing 30% protein and 10% humidity Cereal technology – Future situation Objective Increase competitiveness of the production facilities. Abengoa Fuel and Feed (AFF) process to be patented by Abengoa Bioenergy Steps Decrease amount of residual starch (minimum facility modifications) Increasing protein content (>40%) Increase digestability Increase the quality of the co-product (DDGs)

Technology Enzymatic hydrolysis technology – current situation Sector Eléctrico Technology Enzymatic hydrolysis technology – current situation Abengoa Bioenergy has develop a proprietary fractionation technology for biomass processing. Pilot scale plant in York, (Nebraska, US) to validate our biomass fractionation process and integrate downstream systems Demonstration plant in Babilafuente (Salamanca, Spain) to validate biomass to ethanol enzymatic technology at a commercial scale. Enzymatic technology – Future situation Objective Competitive production of ethanol from biomass. Steps Complete the process engineering development demonstrations phases. Build first of a kind commercial facility after the demonstration of the technology in Salamanca and Nebraska Valorization of all biomass fractions

Technology Steps (continue) Sector Eléctrico Technology Steps (continue) Research in the biological deconstruction of the biomass to produce tailor made enzyme mixes for each specific case: Determine fundamental physical and chemical factors in the recalcitrante of lignocellulosic biomass to processing Understand cellulase and cellulosome Develop new enzymatic systems to soften termochemical pretreatment conditions Advance in the sugar fermentation to ethanol through the engineering of microbial systems to achieve: high yield with complete sugar utilisation, minimal by- product formation, and minimal loss of carbon into cell mass. high final ethanol concentration tolerance to inhibitors present in hydrolysates higher overall volumetric productivity, especially under high solids conditions

Sector Eléctrico Technology Biomass gasification and synthesis (BtL) technology –current situation Available catalysts are not productive enough to make the process economically feasible. Low conversion per pass Mixed alcohols product with low ethanol selectivity Several existing technologists licensing gasification processes for syngas production for further chemical synthesis. Catalysts development programs in European research centers, combined with process design and analysis. Recently granted by the US-DOE a program (3 MM$) for synthesis catalysts development

YTD Production Capacity Sector Eléctrico YTD Production Capacity Production Facilities in EU Production Facilities in U.S. EU (Mgal) 2006 2007 2008 Production 142 142 208 Construction * 66 66 US (Mgal) 2006 2007 2008 Production 110 198 286 Construction 88 88 • Cartagena (40 Mgal) • La Coruña (50 Mgal) • York, NE (55 Mgal) • Portales, NM (30 Mgal) • Salamanca (52 Mgal) • AB France (65 Mgal) • Colwich, KS (25 Mgal) • Ravenna, NE (88 Mgal) Abengoa Bioenergy is the only international producer of ethanol

Build first commercial scale cellulose facility by 2011 Sector Eléctrico Abengoa Bioenergy plans to be a leader in commercialization of cellulosic ethanol production Objective Build first commercial scale cellulose facility by 2011 15 million gpy from biomass, 85 million gpy from starch (hybrid facility) Cornerstones Two biomass facilities now underconstruction York, NE pilot plant (operational 2006) will demonstrate biomass fractionation and fermentation technology Salamanca, Spain facility (2 mgpy - operational 2007) will demonstrate enzymatic hydrolysis technology

DOE integrated biorefinery solicitation Sector Eléctrico DOE integrated biorefinery solicitation Overview DOE will award of up to 40% of the cost of a biorefinery facility ($76.8 million) Award criteria: Facility must be able to utilize 700 bone dry metric tons of biomass per day Facility must be replicable and proposal to include appropriate deployment plan of the proposed technology After construction costs are paid, the facility must be profitable without subsidies Additional merit points given for: Significant showing of state support Energy generation from multiple sources feedstocks Barrels of oil displaced

Risk mitigation for biomass availability and site selection Sector Eléctrico DOE integrated biorefinery proposal Risk mitigation for biomass availability and site selection Risk factors Inclimate weather during biomass harvest period Due to this risk factor, Eastern US corn-belt was not considered as a viable location for plant location until one-pass harvest technology is available (potential for one in seven years for biomass harvest to be limited) Biomass crop residue abundance As the DOE is focused on cereal crop residues, areas such as California and South East US (wood residue) were not considered as viable locations for proposal Multiple sources of biomass Multiple biomass sources demonstrate plant replicability over a wider geographic area Multiple biomass sources with harvest periods during different times of the year reduce risk of biomass harvest being compromised by bad weather Multiple biomass sources and harvest times spread harvest machinery investment and will reduce feedstock costs

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Biomass available in Kansas 38 million tons per year Sector Eléctrico DOE integrated biorefinery proposal, con’t Biomass available in Kansas 38 million tons per year

Abengoa’s hybrid plant concept Sector Eléctrico DOE integrated biorefinery proposal, con’t Abengoa’s hybrid plant concept 35 million bushels grain facility 88 million gallons ethanol 290,000 tons feed co-product 245,000 BD metric tons biomass (315,000 short tons-as is) 400 BD metric tons/day 15 million gallons ethanol 300 BD metric tons/day Syngas production 1,597,200 MMBTU (syngas+flue gas) 100% steam needs of biomass processing ~30% steam needs of grain to ethanol processing Syngas can be utilized for production of chemical intermediates Opportunity to leverage infrastructure and many plant operations

Sector Eléctrico DOE integrated biorefinery proposal, con’t Technical process Enzymatic Hydrolysis (EH) will convert biomass to ethanol, lignin and biomass animal feed. - The EH technology is being developed in house and will be tested and improved at the facilities in York, NE (pilot plant) and Salamanca (demo plant). - Coproduct development (lignin and biomass animal feed) is being performed and will contribute to the overall profitability of the facility. Gasification will convert biomass to syngas, which will be combusted for steam generation.

Oil Displacement From 245,000 BD metric tons biomass Sector Eléctrico DOE integrated biorefinery proposal, con’t Oil Displacement From 245,000 BD metric tons biomass 386,721 barrels of oil displaced

Strong showing of state support Sector Eléctrico DOE integrated biorefinery proposal, con’t Strong showing of state support State government Attractive incentive package Strong governmental support Producer organization support Kansas Farm Bureau Kansas Wheat Growers association Kansas Milo Growers association Kansas Corn Growers association Kansas BioAuthority Kansas Association of Ethanol Processors

Biomass logistics – P&L cornerstone Sector Eléctrico DOE integrated biorefinery proposal, con’t Biomass logistics – P&L cornerstone Biomass inputs 50 mile radius of plant site 65% wheat straw, 20% milo residue, 15% corn stalks Opportunistically use other residues such as gin trash, wood chips, etc. Areas evaluated = ~5% of total available 80 to 85% of input needs Producer harvests and stores material field side Abengoa collects material as needed 15 to 20% of input needs Producer delivered material to plant site

Contracted at least one year in advance Sector Eléctrico DOE integrated biorefinery proposal, con’t Biomass economics 80 to 85% of material Contracted at least one year in advance Crop residue is valued at $10/short ton in the field Added to the $10/ton Custom rates for harvesting Custom rates for transporting/stacking at field side Storage fee dependant on amount of time between harvest and Abengoa collection – to include competitive insurance rate and weather protection $10 plus rates above = price paid for biomass at field side 15 to 20% of material Spot market pricing

Biomass economics What $10/ton means to biomass producers Sector Eléctrico DOE integrated biorefinery proposal, con’t Biomass economics What $10/ton means to biomass producers Of the $10/ton, between $3 to $4 needs to be returned to the soil for nutrient loss Producer net will be $6 to $7 per ton Wheat @ 1 ton/acre net = $6 to $7 per acre Corn/milo @ 2.4 ton/acre net = $14.4 to $16.8 per acre Switchgrass @ 5 ton/acre net = $30 to $42 per acre Many Kansas producers live on $25 per acre profit

Wheat versus corn/milo residue and switchgrass Sector Eléctrico Wheat versus corn/milo residue and switchgrass

Cost effective enzymes Pentose to ethanol organism (s) Sector Eléctrico Needs to make cellulosic ethanol cost effective/ competitive with grain ethanol Process Cost effective enzymes Pentose to ethanol organism (s) Fractionation process Plant design and operational learning curve Feedstock High density balers One-pass harvesting systems Storage infrastructure and systems to maintain quality Improved genetics of feedstock varieties Energy efficient harvesting systems Transportation infra- structure and biomass friendly regulations

Abengoa Bioenergy Thank you Question? www.abengoabioenergy.com Sector Eléctrico Abengoa Bioenergy Thank you Question? www.abengoabioenergy.com