Registered Office: Marston House, Walkers Court, Audby Lane, Wetherby, LS22 7FD Company Reg: 06845511 VAT Reg: 177 724180 T: 01937 581011 E: info@earthmill.co.uk W: www.earthmill.co.uk

ArborElectroGen 45

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Introduction

Established in 2009, Earthmill is the UK’s number 1 for the supply, install and maintenance of agricultural wind

turbines. Our experience of power generation combined with our understanding and reputation within the

agricultural market make CHP (combined heat and power) the perfect partner to our wind turbine services.

As fellow investors in renewable technology, we own and operate a fleet of our own turbines and have a clear

long term commitment to the industry. We are proud of our achievements within this fast paced industry. Over

90% of our business comes from recommendations due to our commitment to providing exceptional customer

service.

As we have proven with our wind turbine partners, we will carefully consider power, performance and reliability

in order to supply our customers with only the best technology available. For last 5 years we have kept a

careful eye on other renewable technologies that would be complimentary to our clients businesses. We

believe CHP offers unrivalled returns as up until now the RHI tariff for biogas CHP has been relatively

untapped.

Expertise in all areas

On site Assessment

Feasibility & System Design

Grid connection & Installation

OFGEM registration & accreditation

Ongoing servicing and maintenance

Regional focus

Supplying and installing CHP technology available is relatively straight forward, providing quality support and

maintenance throughout the 20 year life of your machine is more challenging. To ensure our customers receive

the service levels they expect Earthmill will only install a CHP system within easy reach of our regional support

teams.

Earthmill Managing Director Steve Milner (Right) and

Arbor Heat and Power CEO Richard Griffin (Left)

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What is CHP?

Combined heat and power or ‘CHP’ is an efficient, low-carbon approach to generating both electricity and heat from a single fuel source. A CHP system consists of a gas engine, a generator and a heat exchange system. Sustainable, ‘woody’ biomass fuels are heated to a very high temperature (1000ºC) and converted from a solid state to gas. This gas then fuels a combustion engine which powers a generator to produce 3 phase electricity. A large amount of heat is generated in the process which is captured and can be used to heat anything from dairies, poultry units or pig sheds to industrial facilities, hotels and schools. In standard power plant around 60% of the energy created from burning fuel escapes into the environment as pollutants and heat. Due to the gasification process, exhaust emissions are exceptionally low making CHP very clean and therefore even suitable for areas with emission restrictions. The illustration below demonstrates the efficiency of CHP systems due to capturing the useful heat energy created in the generation process.

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The ArborElectroGen 45 The ArborElectroGen® range of proven, combined heat and power (CHP) systems deliver cost-effective, low-

carbon heat and power for a variety of applications with incredibly low-carbon emissions.. The machine offers

exceptional operational performance and is the only wood-fueled product currently available that is accredited

by OFGEM for the Biogas RHI.

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Why Wood Chip? Wood chip is the cheapest form of timber fuel;

easily obtainable and requires minimal processing.

They suitable for automatic handling and do not

demand a fossil-fuel boiler to support their

gasification.

The generation of 1kWh of heat costs somewhere

between 1.3p and 3.8p; a notable reduction from

oil, wood pellets or LPG which can cost upwards of

5p per kWh produced.

Woodchip requirements

Your woodchip must be uncontaminated and of a consistent size and shape to prevent obstructions or wear to

the system.

Woodchip with a lower moisture content burns more efficiently, and is more cost effective when purchasing by

weight. The moisture content of your woodchip will dictate the efficiency of your heat and power production.

The ArborElectroGen 45 requires the woodchip fuel to be dried to around 15% moisture content before use.

Obtaining woodchip

By drying your own woodchip it is possible to make large savings on your cost of fuel. Dry wood is typically

around twice as expensive as wet wood. Using heat from your CHP machine to dry your own fuel is eligible for

RHI revenue thus further reducing the price of your fuel.

Woodchip can come from offcuts from sawmills, arboricultural activities or timber waste. Contractors can be

employed to chip timber you might have on your own land, and ensure that it meets the required specifications.

Woodchip delivery and Storage

Due to its bulky nature, woodchip is more difficult to move than pellets. It is therefore usually delivered in large

quantities and therefore storage space and a mechanism for transferring the woodchip from the lorry to the fuel

store must be considered, as well as a plan of access for the delivery vehicle.

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Financial Costs & Returns CHP attracts two subsidies, the Biogas Renewable Heat Incentive (RHI) for the heat that you use and Renewable Obligation Certificates (ROC’s) for the electricity you generate. Alongside this you can export any surplus electricity to the grid and receive the export rate. As you will be using the heat and electricity you will benefit from reduced energy bills and this saving can be factored into the overall returns you can expect to receive. Ideally you need to run the system for 8,000hrs a year to fully maximize the potential. Heat - The system generates 82kw of heat (656,000KWth annually) - Receive the RHI for the heat that you use - Reduce your energy bill. Example based on you using oil and saving 6p/litre

Heat generated RHI income – 7.62p Energy bill saving Total Revenue

656,000 KWhth £49,987 £39,000 £88,987

Electricity - The system generates 45kw of electricity (320,000KWh annually) - Receive 1.9 ROC’s per KWh generated - Reduce your electricity bill by using the power. Example based on 50% used paying 11p/Kwh - Export surplus electricity to the grid

Electricity generated ROC’s. 1.9 x 4.2p Energy bill saving Export Total Revenue

320,000 KWe £25,536 £17,600 £7,840 £50,976

Fuel & Service & maintenance - The system uses 38kg/hr or 304 ton per year based on 8,000 operating hours - 18% moisture wood chips approx £120 a ton - Annual fuel costs £36,480 - Service & Maintenance £15,000 per year inc parts and labour

Summary

Electricity ROC income

Heat RHI income

Energy bill saving

Electricity Export

Fuel & Maintenance

costs

Total Net Revenue

£25,536 £49,987 £56,600 £7,840 £51,480 £88,483

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Eligible Uses for Heat To claim the Non-Domestic RHI for biogas you must be prepared to demonstrate that your installation meets the strict eligibility criteria. Regulations stipulate the RHI will support heat that is used to:

Heat a space in an enclosed building or structure

that is permanent or ‘long lasting’

Heat water within a building for commercial use

such as in hospitals or hotels

Carry out a process within a building such as

industrial cooking, drying of wood or use in

manufacture

Carry out a process outside of a building for

commercial cleaning and or drying

To see if your heat requirement would qualify for RHI support; speak to a member of the Earthmill team who

can provide advice on eligible heat uses. We also strongly recommend that you read the further information in

Appendix A and visit www.ofgem.gov.uk to learn more.

The ArborElectroGen 45 is most efficient when run at maximum output. Many of our clients however have a

heat requirement where the ‘baseload’ (the permanent minimum heat load that is required at their site) is less

than what a CHP system will produce. In these instances rather than reduce the output of the system (and

therefore reduce efficiency), the preferred option is to use this as an opportunity to diversify and create new

commercial operations such as drying biomass fuel for commercial resale and drying their own fuel to reduce

fuel costs.

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Key Stages of the project

Timings vary from project to project depending on grid work and infrastructure requirements. Manufacturer lead

times are typically 12 weeks from placement of order.

Site Visit – Detailed Proposal

System Design/Integration

Financial Modelling

Financing

Project Start Place Product Order

Pay for Grid Connection

Plan Infrastructure / Integration Work

Installation Schedule Heating and Electrical Infrastructure

Structural / Civil Works OFGEM Registration

CHP Installation

System Commissioning

OFGEM Accreditation

Service & Maintenance Contract

Feasibility Study

Grid Study

Technical Assessment

System Design

On-site Assessment

Decision to proceed with feasibility study

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Grid Connection Your Earthmill account manager will oversee the grid connection application with your Distribution Network Operator. An initial budget quote will be obtained; this provides an early indication of likely connection costs. A detailed quote is obtained during the later stages of planning this gives a detailed work and cost breakdown. Infrastructure and Civil Works Each project we complete is unique in design. A CHP installation can be straightforward incorporating the indoor unit in an existing building, and a simple flow and return system to distribute heat or can include new buildings to house the CHP unit with bespoke fuel stores and multiple loops to distribute heat. Upon completion of the system design, Earthmill can manage the installation of the infrastructure on your behalf or you can manage this stage of the project yourself working to the design we have provided.

Example of both an outdoor unit (left) and an indoor unit (right)

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Warranties & Maintenance

For your peace of mind Arbor offer a 12 month parts warranty on the unit as standard with the option of 5% of

the system’s cost to extend that to 24 months.

Office and on-site support

CHP units operate at high temperatures for extended periods of

time and whilst we only install the most reliable machine on the

market, they do require regular engineer support.

Our team of service engineers are employed full time by Earthmill

and are fully qualified to provide the best level of care for your

ArborElectroGen . We operate tracking devices in all our service

vehicles which enables us to deploy whichever engineer is best

located to attend a support call. Due to the density of turbines we

have across Wales and Yorkshire, there is nearly always an

engineer on hand in your area.

With remote monitoring from both our office and the

manufacturer’s, we are able to provide a proactive service to

ensure that your ArborElectroGen remains in good health and is

available for heat and power generation. The same proactive

approach is used for wind turbine maintenance and our fleet of over

230 turbines boasts an industry leading 99% availability.

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Appendix A – Non Domestic Renewable Heat Incentive (RHI) Guidance Volume One: Eligibility and How to Apply (Version 4), Feb 2015 5.1. The RHI Policy Document 35 sets out the principles underlying the government’s policy on heat uses that are eligible for RHI support: The RHI is intended to provide support for renewable heating where the heat generated is usable and useful. In order for an installation to be eligible for the RHI, the heat load it is being used to meet must be an economically justifiable heating requirement, ie a heat load that would otherwise be met by an alternative form of heating. The heat load should be an existing or new requirement, ie not created artificially purely to claim the RHI Eligible heat uses 5.2. The regulations state that the RHI will support heat where that heat is used in a building for ‘eligible purposes’: heating a space, heating water or for carrying out a process where the heat is used. Following the introduction of the RHI (Amendment)(No 2) Regulations 2013, the RHI now also supports heat where that heat is used otherwise than in a building for cleaning or drying carried out on a commercial basis. Our interpretation of these terms is described in more detail below. Heating a space: the heating of rooms or other enclosed spaces within buildings, typically through the supply of hot liquid to heat emitters, such as radiators and underfloor heating. Heating water: the heating of water within a building for direct use, such as commercial and industrial hot water or for use in schools or hospitals. Heating hot water for domestic use is also permitted, provided that the eligible installation does not provide heat solely to a single, domestic premises. For more information on what constitutes a single, domestic premises, see section ‘Installations heating one single domestic premises are ineligible’ in chapter 4 above. Carrying out a process (within a building): the use of heat to carry out a specific process such as industrial cooking, drying (including drying of wood and other biomass fuels), pasteurisation or chemicals manufacture. Other examples include heat that is used for cooling, eg passing renewable heat through absorption chillers. It does not include heat used for the generation of electricity, as set out in section ‘Ineligible heat uses’ below.

Carrying out a process (other than in a building): the use of heat to carry out a process used other than in a building for cleaning and/or drying on a commercial basis. 5.3. The regulations also set out certain conditions that must be met, in order for the heat loss by any pipework between buildings not to be discounted for RHI payments.

5.4. Any heat that is not used for an eligible purpose is classed by the regulations as an ‘ineligible purpose’, and such heat is not eligible for RHI support.41 Heat must be used for eligible purposes within a building with the exception of those specific processes used other than in a building detailed above. For example, renewable heat generated to meet the heat loads described below would not be eligible for the RHI: heating of external surfaces to prevent frost or mitigate the effects of cold temperatures, underground heating of open external spaces, eg recreational facility, heating of open air, eg partially enclosed swimming pools. 5.5. The regulations define a building as ‘any permanent or long-lasting building or structure of whatever kind and whether fixed or moveable which, except for doors and windows, is wholly enclosed on all sides with a roof or ceiling and walls‘. The definition therefore has two main components: whether the building is permanent or long-lasting, and whether it is wholly enclosed. We explain below how we will interpret these two components; you will need to ensure that your building meets both criteria.

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5.6. We will ask for information about the building(s) in which the heat is used as part of the accreditation process. To illustrate how we will apply this definition of a building in practice, we include below some indicative examples relating to both parts of the definition. These are not intended to be comprehensive and we will look at other situations on a case-by-case basis to assess whether the definition in the regulations is met. 5.7. In assessing whether a building or structure meets the requirement that it is ‘permanent or long-lasting’, we shall consider all the relevant circumstances. Considerations may include: the length of time for which it is expected that the building or structure will remain in its location the materials from which the building or structure (including any associated foundations) are constructed the degree to which the building or structure is designed to be moved and the extent of works required to effect its removal.

5.8. In considering the length of time for which a building or structure is expected to remain in its location, we would not generally consider any building which would be eligible for exemption from the energy efficiency requirements of Schedule 1, Part L of the Buildings Regulations 2010, to be ‘permanent or long-lasting’. This is on the basis that it has ‘a planned time of use of two years or less’43. In addition, we may also consider a claim for capital allowances on a moveable building44 as an indication that this building is not expected to remain in a single location on a ‘permanent or long-lasting’ basis.

5.9. Based on the above, we would normally consider that tents, polytunnels and similar structures which are erected on a temporary basis are not eligible because they do not meet the criterion of ‘permanent or long-lasting building or structure‘. However, moveable buildings or structures which are constructed with a view to having a long period of use such as porta-cabins, static caravans, greenhouses and shipping containers could be regarded as ‘permanent or long-lasting‘ provided they are expected to remain in the same location for a sufficiently long period of time.

5.10. Structures which are erected outdoors but are themselves ‘wholly enclosed on all sides with a roof or ceiling and walls’ such as distillation columns and silos would be eligible. This interpretation would generally extend to situations where a number of ‘wholly enclosed’ structures are erected outdoors on the same site; for example, where a chemical or industrial processing facility comprises a series of ‘wholly enclosed’ structures joined by sealed piping. This is subject to each individual structure meeting the requirement that it is ‘permanent or long-lasting’ (see our guidance above) and ‘wholly enclosed’ (see our guidance below in this section on apertures which are not windows and doors). It must also be shown that the eligible heat use eg the carrying out of a process is contained within the relevant structure(s).

5.11. Where heat is used for an eligible purpose within a series of ‘wholly enclosed’ structures which make up a chemical or industrial processing facility, each such structure would normally be treated as a separate ‘building’ for RHI purposes. Open structures such as uncovered tanks, reservoirs and channels would be excluded from the definition of building. We also interpret the requirement that buildings or structures should be ‘wholly enclosed on all sides’ to mean that structures with open sides (such as barns, car ports, covered terraces etc) and with retractable roofs are ineligible. A building or structure where one or more of its four walls contains a window or door which is significant in proportion to the area of the wall (such as retail shops with display windows, cafes with patio doors, loading bays and docks, garages etc.) could therefore still be regarded as wholly enclosed. 5.12. In interpreting the requirement for ‘wholly enclosed‘, we shall also take a pragmatic approach to the existence of apertures in walls, ceilings or roofs which are not doors or windows (such as vents, flues, air intakes etc.), provided that these are small in size and number relative to the area of the wall, ceiling or roof and do not, in our opinion, permit the significant escape of heat.