Waste-to-Energy in the Philippines

EnvirOcycler GTO Technology

Pilot Project in Puerto Princesa City, Palawan, The Philippines;

Moving forward to major towns and cities, including Metro Manila and

Metropolitan Cities nationwide

Waste & Energy Issues in the Philippines

SOCIO-ECONOMIC SETTING

RAPIDLY EXPANDING PHILIPPINES’ ECONOMY projected growth of at least 6% in

2013; Fitch’s investment rating of BBB.

STRONG ECONOMIC EXPANSION creates large demographic shifts from rural

areas to large, rapidly growing urban communities.

FAST GROWING URBAN COMMUNITIES face major challenges:

• Increased municipal solid waste (MSW) and unsustainable landfill space;

• Inadequate MSW management equipment and infrastructure;

• Unsustainable MSW management practices & illegal dumping causing floods;

• Increased pollution with contamination of land and water resources;

• Increased CO2 emissions;

• Increased health concerns caused by pollution and contamination; and

• Energy security needs Renewable Energy resources.

SOLUTIONS FOR (i) MSW management and (ii) electricity supply are urgently

sought by National and local governments in the Philippines.

1

EnvirOcycler© Technology provides Long-term, Integrated Multi-Purpose Solutions with

Attractive Sustainable Returns

Versatile two-stage gasification and thermal oxidation processes create

producer gas from dry and wet biomass from MSW for generating

electricity.

Thermal oxidation products at 1,010°C can be used to produce steam for a

condensing steam turbine or, alternatively, for an organic Rankine cycle

turbine generator.

Net power generated by a single 105 GJ/h EnvirOcycler unit is

approximately 5.5 MWe.

Parasitic load is minimal making it very efficient in generating electricity,

while other gasification technologies require high power inputs.

Biomass moisture content between 35% and 60%, therefore no external

energy required to pre-dry feedstock.

2

EnvirOcycler© Technology Process

and Business Plan & Investment Benefits

Provide disposal of

raw, mixed MSW

3

Material

Recovery

Facility

Revenue from

Selling

Recyclables

Recycling

Facility

RDFStorage

EnvirOcycler

Revenue from

Selling

Ash

Bottom

&

Fly Ash

Heat

Recovery

Boiler

Revenue from

Selling

Heat

Industrial

Process

Heat

Turbine-

Generator

Revenue from

Selling

Electricity

5.5 MWe net

Electricity

to Grid

Revenue

from

Tipping

Fees

ResidentialICI

Sewage SludgeFOGs

Green WastesConstruction &

Demolition WasteLandfill Gas &Condensate

475 t/day

at 55% M.C.

US$15/t

US$0.18/kWh*

*Used the $0.18/kWh tariff rate for metro Manila. In the provinces the rate is much higher and can reach as high as $0.80/kWh.

The EnvirOcycler provides two, long-term, integrated solutions for problems

arising from rapid urban growth while generating investment benefits

The EnvirOcycler© Solution

Two-stage gasifier-thermal oxidizing (GTO) technology converts dry and

wet organic fraction of municipal solid waste (MSW) into thermally

oxidizable gases and heat for clean electrical power generation.

Gasifies dry and wet biomass in its large first stage; Oxidizes the first

stage "producer gas" in a second stage; Heat production for electricity

generation and/or industrial processes.

Two immediate solutions:

• Complete sustainable waste management solution, reducing and/or

eliminating alternative disposal methods for MSW such as landfills;

• Electricity production to meet energy security.

Flexibly configured for large and small towns and cities, and for other

industries and sectors.

Ideal for Public-Private Partnerships turn-key investment projects such as

a build, own, operate and transfer (BOOT) scheme.

4

Single EnvirOcycler offsets equivalent of

US$10 million in imported fossil fuels (at

$100/barrel) per month

MSW fuel loads, as follows:

• 287 tonnes/day of MSW at 35% moisture content; or

• 358 tonnes/day of MSW at 45% moisture content; or

• 476 tonnes/day of MSW at 55% moisture content.

Minimum 35% moisture content means energy from

the process does not need to be parasitized for

drying the waste prior to processing, unlike other

gasification technologies, produces more energy for

generating electricity resulting in a higher output

efficiency and higher revenues.

With an average of 1.5 kg of MSW per capita/day, an

EnvirOcycler unit converts the organic fraction of

MSW into electricity for communities with

populations between 184,000 to 305,000.

A cut-away of the Envir0cycler

5

Minimal EnvirOcycler Emissions

Emissions from the 2-Stage EnvirOcycler are minimal due to the vigorous,

cyclonic, double vortex, thermal oxidation process employed in the

EnvirOcycler’s 2nd stage. The EnvirOcycler’s 1st stage is a very large, gentle,

updraft gasifier.

EnvirOcycler emissions are significantly less those set by the US

Environmental Protection Agency for all emissions. This includes:

• less than 1 ppm for CO;

• less than 15 ppm for NOx;

• less than 100 mg/m3 for particulate matter;

• No traceable toxins; and

• Further reductions to these emissions if:

• a selective catalytic reactor is added to eliminate the NOx by

converting it to N2 and O2; and

• a “bag house” is added to capture particulate matter.

6

Benefits: Project registered under the

United Nation’s Clean Development Mechanism

(CDM) can generate Carbon Credits for added

revenue for offsetting CO2 and methane

7

• Increases energy security from renewable energy, generating revenue by selling

electricity to the National Grid Corporation of the Philippines (NGCP) and

Distribution Utility or Electric Cooperative;

• Offsets expensive imported fossil fuels, Reduces production of greenhouse gases;

• Marketable by-products, e.g., soil conditioners, concrete additives, etc.;

• Revenues from the recovery of recyclable materials from the upstream MSW;

• Eliminates need for expanding/new landfill sites/improved productive land use:

• Reduces soil and ground- and surface water contamination;

• Mitigates environmental pollution to rivers, land and air (Green House Gas -

methane);

• Lessens health concerns of landfills and open MSW disposal/incineration;

• Reduces pest infestations and improves community aesthetics near landfill

sites.

• Creates employment (minimum 80 persons per 105 GJ EnvirOcycler unit).

Benefits to the Project Investor

An EnvirOcycler project quickly generates benefits to investors

using the proposed Puerto Princesa project model and preliminary

analyses:

• Establish one 105 GJ/hr EnvirOcycler using 450 tons MSW/day at 50% MC;

• Estimated capital cost of $43.6 million per EnvirOcycler unit;

• Waste tipping fee of $15/ton (typical in the Philippines); and

• Electricity feed-in rate of $0.18/kWh*.

RETURNS ON INVESTMENT

• Return on investment of 17%. (EOCC in the Philippines is about 10%);

• Payback period can be as short as 5.5 to 6 years.

*Used the $0.18/kWh tariff rate for metro Manila. In the provinces the rate is much higher and can reach as high as $0.80/kWh.

8

Project Start-up Financing Requirements

AET-HPEG expressed their intent to the City Mayor of Puerto Princesa on

July 3, 2009 to provide a Build, Own, Operate and Transfer (BOOT) project

at the Puerto Princesa landfill site.

Heads of Terms Agreement was signed by AET-HPEG and Mayor Edward

Hagedorn, who formally indicated that Puerto Princesa has multiple sites and

is ready, willing and able to contract with AET-HPEG and their Counterparts

in the Philippines: H&WB Asia Pacific (Pte Ltd) Corp., an energy development

company, and CPI-TOTAL Corp., a consultant engineering company, for the

development of one or more EnvirOcycler projects.

US$ 780,000 start-up financing is required for the following initial project activities:

Environmental Impact Study and permitting US$ 100,000

Local WTE expert US$ 30,000

Legal cost US$ 30,000

Publicity US$ 20,000

Feasibility Study & project development costs US$ 600,000

Total: US$ 780,000

9

Initial Technical & Regulatory Verification and

Approval Activities

AET-HPEG and counterparts H&WB Asia Pacific (Pte Ltd) Corp. and CPI-TOTAL Corp.

will provide initial development of the project, specifically towards:

• Completing shop drawings and engineering designs for a 100 million BTU

EnvirOcycler;

• Providing emissions tests to Philippines’ regulatory authorities for verification that

the EnvirOcycler meets/exceeds EPA emissions standards for NOx, CO, dioxins, and

furans;

• Develop site specific drawings for the Puerto Princesa sanitary landfill site, allowing

the team to develop the selected project to “shovel-ready” status;

• Preparing a comprehensive bankable Feasibility Study;

• Negotiating and finalizing power purchase agreements, waste contracts and

obtaining all regulatory approvals for the project; and

• Participatory meetings with all Stakeholders to ensure the proposed project is

acceptable to the host community.

Upon completion of the above, the team will proceed to full engineering, procurement

and implementation activities to complete the project within a 12-month period,

includes training and capacity-building for O&M.

10

Preliminary Estimates of Annual Cash Flows & Rate of Return

Puerto Princesa, Palawan, PhilippinesProjected Annual Statement of Income Calculation of Blended Tipping Fee

Tons per day of various waste streams @ 50% moisture 450 Medical waste 0.25 ton/day $200 per tonne $50

kilowatts 5,500 Wastewater 0.2 ton/day $15 per tonne $3

In Tip/Tonne $15 Construction 5 ton/day $15 per tonne $75

Power tariff/kwh $0.18 ton/day per tonne

JAN FEB MAR APR MAY JUN JULY AUG SEPT OCT NOV DEC Annual Total

POWER 677,635$ 612,058$ 655,776$ 677,635$ 655,776$ 655,776$ 677,635$ 677,635$ 655,776$ 677,635$ 655,776$ 677,635$ 7,956,749$

STANDBY 1 1 1 1 1 1 1 1 1 1 1 1 $12

ALL POWER 677,636$ 612,059$ 655,777$ 677,636$ 655,777$ 655,777$ 677,636$ 677,636$ 655,777$ 677,636$ 655,777$ 677,636$ 7,956,761$

ASH -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

CERs -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

PAP & PLA -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

FUEL SAVINGS -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

TIPPING FEE 209,250$ 209,250$ 209,250$ 209,250$ 209,250$ 209,250$ 209,250$ 209,250$ 209,250$ 209,250$ 209,250$ 209,250$ 2,511,000$

Net Sales 886,886$ 821,309$ 865,027$ 886,886$ 865,027$ 865,027$ 886,886$ 886,886$ 865,027$ 886,886$ 865,027$ 886,886$ 10,467,761$

C.O.G.S. 87,000$ 87,000$ 87,000$ 87,000$ 87,000$ 87,000$ 87,000$ 87,000$ 87,000$ 87,000$ 87,000$ 87,000$ 1,044,000$

G.P./LOSS 799,886$ 734,309$ 778,027$ 799,886$ 778,027$ 778,027$ 799,886$ 799,886$ 778,027$ 799,886$ 778,027$ 799,886$ 9,423,761$

Ops Admin

Rent: 0 0 0 0 0 0 0 0 0 0 0 0 -$

Equip:

Salaries: 57,040 57,040 57,040 57,040 57,040 57,040 57,040 57,040 57,040 57,040 57,040 99,820 727,260$

Payroll Tax 0 0 0 0 0 0 0 0 0 0 0 0 -$

Benefits 0 0 0 0 0 0 0 0 0 0 0 0 -$

Lease Primary 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 576,000$

Mgmt/ops 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 180,000$

Utilities 0 0 0 0 0 0 0 0 0 0 0 0 -$

Prop Ins. 0 0 0 0 0 0 0 0 0 0 0 0 -$

Liab Ins. 0 0 0 0 0 0 0 0 0 0 0 0 -$

W.C. 0 0 0 0 0 0 0 0 0 0 0 0 -$

Tel & Comm 500 500 500 500 500 500 500 500 500 500 500 500 6,000$

Legal/Acctg 500 500 500 500 500 500 500 500 500 500 500 500 6,000$

Prof/Training 0 0 0 0 0 0 0 0 0 0 0 0 -$

E F&F 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000$

Misc. 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000$

Monitoring 0 0 0 0 0 0 0 0 0 0 0 0 -$

Permit fees 25,000 0 0 0 0 0 0 0 0 0 0 0 25,000$

R&D dev. 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000$

Engineering 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000$

QC, Consult 0 0 0 0 0 0 0 0 0 0 0 0 -$

Office, all 3,000 350 350 350 350 350 350 350 350 350 350 350 6,850$

Transport 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 36,000$

Prop Tax 0 0 0 0 0 0 0 0 0 0 0 0 -$

Waste 0 0 0 0 0 0 0 0 0 0 0 0 -$

TOTAL EXP: 165,540 137,890 137,890 137,890 137,890 137,890 137,890 137,890 137,890 137,890 137,890 180,670 1,725,110$

P/L 634,346$ 596,419$ 640,137$ 661,996$ 640,137$ 640,137$ 661,996$ 661,996$ 640,137$ 661,996$ 640,137$ 619,216$ 7,698,651$

LOANS $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $2,400,000

LSCR 3.17 2.98 3.20 3.31 3.20 3.20 3.31 3.31 3.20 3.31 3.20 3.10

PAYBACK PERIOD: 67.95 MONTHS EBITA 3.21 CAPITAL: $43,596,000 0.177 ROI

11

The EnvirOcycler in Malaysia

A third 105 GJ/hr EnvirOcycler project is

currently being implemented in Malaysia

to provide industrial process heat using

MSW from Kuala Lumpur.

First Stage gasifier

Second Stage thermal oxidizer

12

Two 105 GJ/hr EnvirOcyler units

dedicated to the use of palm oil

industry waste generate 11 MWe

provided to the Malaysian

electricity grid.

Puerto Princesa EnvirOcycler Project

The facility will be developed near the existing sanitary landfill, 26 km north

of Puerto Princesa, Philippines. The advantage of the location is to mine

and use the MSW in the landfill as feedstock in addition to the incoming

stream of MSW collected daily.

The project will consist of one or more 105 GJ/hr EnvirOcycler units with a

capacity to convert 450 tonnes of MSW per day at 50% moisture content.

One unit will generate up to 5.5 MW of firm supply of grid electricity using a

steam turbine or an Organic Rankin Cycle (ORC) turbine.

Estimate installation time of a 105 GJ/hr EnvirOcycler and electrical power

generating station is 18 to 24 months from time all legal and regulatory

permits have been received. The final estimated cost of installing an

EnvirOcycler depends on many factors to be ascertained during the

Feasibility Study after a final agreement to advance an EnvirOcycler project

has been reached.

13

Costing and Financing of the Project

The cost of the facility is preliminarily estimated at US$44 million per EnvirOcycler

Unit.

Investment will be paid back through revenues from municipal tipping fees assumed to

be $15 per ton, and the sale of renewable energy to the grid of at least $0.18/kWh (Manila

rate), although in Palawan it can be as high as $0.80/kWh.

Major electricity sales can be arranged through the Ancillary Services Purchase

Agreement (ASPA) for Peaking load, Regulating Reserve, or Load-following to the

National Grid Corporation of the Philippines (NGCP) and or a Bilateral Power Supply

Agreement with the Electric Cooperative or Distribution Utility.

Operating cost of the EnvirOcycler are estimated at $7 to $8 per ton of MSW.

Added revenues from separated recyclable materials and sale of bottom and fly ash as a

concrete strengthening and durability enhancement additive, an agricultural soil

conditioner or liming agent.

CDM revenue stream for a period of 10 years. Therefore, CDM revenues could increase

the rate of return on the project, and substantially reduce financing risks.

14

AET-HPEG-H&WB-CPITC Roles & Responsibilities

15

• Coordinate consulting and city/community teams and assist in developing the

project; however, the city will obtain land titles, building, environmental and any

other regulatory permits.

• Deliver an engineered design and process for the EnvirOcycler installation.

• Employ an on-site installation team to install a complete EnvirOcycler power plant

and auxiliaries including:

- Instruments and controls related to the operations of the EnvirOcycler;

- EnvirOcycler A-grate assembly and mechanisms located in the first stage;

- Underfire, overfire and thermal oxidation fans and blowers;

- Refractory brickwork and castings for the second stage of the EnvirOcycler;

- Ash handling and automatic ash removal system and storage units;

- Services related to the fabrication and on-site assembly of one EnvirOcycler unit;

- Design and installation of all ancillary structures to house and provide a

continuous supply of MSW to the EnvirOcycler, including facilities for upstream

separation of recyclable materials;

- Construction and assembly of electricity generating and interconnection facilities;

and

- Training of local personnel for O&M, and integration with electricity system.

tt

Schematic of the EnvirOcycler EnvirOcycler Products of Combustion to Waste Heat Boiler

16

Typical Mass & Energy Balance

17

Typical EnvirOcycler WTE Plant Layout

18

EnvirOcycler©

Resilient Multi-solutions!

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Disclaimer Clause - The information and data contained herein are deemed reliable, unless adjustments are appropriately made.

No representation or warranty is made, however, as to the accuracy or completeness of such information or data, and nothing

contained in this document is, or shall be relied upon as, a promise or representation as to future events or any fact occurring

after the date of release of the information or document. (April 26, 2013).