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WELL POWER ENERGY LLCRe-Completing Gas Wells
In Mississippi and Texas
Using Linear Driver Technology
Frank Smith, PresidentSologen Systems LLC
January 12, 2010
WHY IS THE INTERNATIONAL PRESS INTERESTED IN A GEOTHERMAL PROJECT IN TEXAS?
GENERATION TECHNOLOGY COMPARISON
Traditional Generation Renewable Generation
NUCLEAR COAL GAS WIND SOLAR THERMAL
GEO THERMAL
Targeted Generatio
n
Baseload Baseload Baseload & Peak
Variable Variable Baseload
Total CostPer MW
$4.8 M $3.2 M $0.9 M $2.5 M $11.4 M $0.75 M
Fuel Cost /MM
Btu
$0.80 $2.40 $8.60 $0.00 $0.00 $0.00
Capacity Factor
85% 85% 50% 34% 41% 90%
Cost of Electricity
8.5¢ 10.5¢ 10.5¢ 12.5¢ 21.0¢ 9.0¢
Emissions None High Medium None None None
Water Use High High Low – Medium
None High None
Source: CPS Energy, August 10, 2009 (geothermal added)
TEXAS ENERGY FACTS:
Texas consumes almost 12% of the energy used in the United States
California is second; 38% lower than Texas Electricity accounts for over 30% of energy use
Source: Texas Renewable Energy Resource Assessment, Dec 2008
TEXAS ELECTRICITY FACTS: 1995-2006
Peak demand has increased by 33.6 %, from 46,668 MW to 62,339 MW
The population of Texas has increased by approximately 28%, from 18.7 million to 24 million.
Retail sales of electricity in Texas have increased by 30.2%, from 263,278,592 MWh to 342,724,213 MWh
Retail electricity cost has increased by 221.8%, from $16.0 billion to $35.5 billion
The average retail price of electricity in Texas has increased by 70%, from $0.061 per kWh to $0.104 per kWh.
Source: Texas Renewable Energy Resource Assessment, Dec 2008
TEXAS GEOTHERMAL FUN FACTS Since 1960 there have been over 534,000 oil
and gas wells drilled in Texas The ground water temperature around San
Antonio has temperatures as high as 118ºF Geopressure wells in the Texas Gulf Coast are
able to flow with pressure up to 15,000 psi to the surface and if not controlled would shoot hundreds of feet into the air.
The hottest well recorded is 510ºF @ 23,800 ft east of Victoria, Texas
BUT, there is no significant geothermal electricity development in Texas!
TEXAS RENEWABLE ENERGY POTENTIAL
Resource Total Physical Resource
(quads*/yr)
Accessible Resource
(quads*/yr)
Energy Density
(MJ/m2/yr)
SOLAR 4,300 250 8,000
WIND 22 7 500
BIOMASS 9 1 500
WATER 0.10 0.02 10
GEOTHERMAL 400,000 81,000 600
*1 quad = 293,071,000,000 KWh or about 8 BILLION gallons of gasoline
Source: Texas Renewable Energy Resource Assessment, Dec 2008
ORGANIC RANKINE CYCLE – BINARY CYCLE
Works on the principle of thermodynamics Hot liquid is brought to the surface from a
well The hot liquid enters a heat exchanger to boil
a “working fluid” to create steam to turn a turbine
The turbine is connected to a generator The cooled liquid is either pumped back into
the ground or separated at the surface An efficient system if there is a significant
temperature difference between the hot liquid and the working fluid.
ENHANCED GEOTHERMAL SYSTEMS
Linear Drive Engine aka “Free Piston” Engine Patented Systems Exclusive North America License Combines existing technologies for a new
application High efficiency
How is it different from traditional Geothermal?
Captures Kinetic Energy EARTH PROVIDES THE SYSTEM ENERGY
(GEOPRESSURE and GEOTHERMAL)
LINEAR DRIVER TECHNOLOGY Works on the principle of Kinetic Energy, not
thermodynamics Kinetic Energy = ½ Mass times Velocity2
Uses Organic Rankine Cycle, but uses the wellbore as the heat exchanger as follows:
Liquid CO2 is pumped down to the bottom of the well where hot brine is. CO2 instantly flashes to gas creating high pressure and water “lift”
When velocity of the brine increases linearly, the power increases exponentially
The high velocity brine enters the Linear Driver where it drives a piston and creates energy
WELL CONVERSION Our principal strategy is to convert existing
oil and gas wells and turn them into electrical power producers using our proprietary Linear Power Technology.
Converting wells to electric producers does not present any significant challenges.
EARLY LINEAR DRIVER – “BIG BLUE”
REENGINEERED LINEAR DRIVER
ELECTRICITY PRODUCTION PER MW
Power Purchase Agreement with utility company $90/MWh (9¢/kWh)
24 hours/day * 365 days = 8,760 hours per year
8,760 hours * $90/MWh = $788,400/year
GOVERNMENTAL ASSISTANCE
Production Tax Credits (“PTC”) = $21 / MWh PTCs continue for 10 years!
8,760 hours * $21 / hour = $183,960 PTC/MW/yr
$183,960 * 10 years = $1,839,600 in PTCs/MW
5-year MACRS Depreciation – depreciate project cost over a five year period
ANNUAL WELL PRODUCTION
Per MW 2 MW Well 5 MW Well
Electric Production
$788,400 $1,576,800 $3,942,000
Tax Credits $183,960 $367,920 $919,800
TOTAL $972,360 $1,944,720 $4,861,800
Capital Cost $750,000 $1,500,000 $3,750,000
INITIAL OPPORTUNITY
Special Purpose Entity for Investment 4 wells in Mississippi
High power wells – estimates 5-10 MW / well 5 wells in Texas
Typical wells – estimate 2.0 MW / well Offer to include Production Tax Credits Offer to include Depreciation Offer to include Electricity Sales