Reactive Flash Volatilization of Solid Nonvolatile Fuels (Z07080)

Reactive Flash Volatilization of Solid Nonvolatile Fuels (Z07080) • Principal Investigator: Lanny Schmidt • Invention • Method to convert any solid biomass into syngas (mixture of H2 and CO) which can be used to produce electricity and heat • Compatible materials: any species containing carbon and hydrogen including corn and other agricultural biomass and possibly plastics • Anticipated Product • “Micro-plant” for on-location production of electricity eliminates the need to transport solid biomass • Approximate size – 2 clothes washers

Advantages and Benefits Overcomes many of the technical hurdles hindering adoption of biomass gasification.

U.S. Renewable Electricity Market Growing • U.S. Energy Market • $135B growing to $250B U.S. in 10 years • Renewable Electricity • 6% of U.S. capacity 2006 • 9% of U.S. capacity 2025 • 18% growth rate through 2025 • Growth to 12% of capacity in Canada

Biomass Gasification is a segment of the $8B U.S. renewable energy market $135B $8B $5B Electricity (62%) Wind, Solar, Geothermal (10%) Renewables 6% Other Sources (14%) Biomass (23%) $1.1B Fossil Fuels (80%) Hydropower (67%) Heat (38%) Total U.S. Energy Market Renewable Energy Market Renewable Electricity Market U.S. Energy Market • $135B U.S.2006 • $250B U.S.2016 Renewable Electricity • 6% of U.S. capacity 2006 Biomass electricity • $1.1B U.S. 2006 • €1.7 B Europe 2006

Biomass “Micro-Gasification” is a Niche Segment in the Growing Renewables Market • Renewables will increase to 9-12% of total capacity in the U.S., Canada and Europe • Renewables include: • Wind • Solar • Geothermal • Hydro • Biomass • Combustion (provides primarily heat) • Gasification • Pyrolysis • Plasma gasification • Anaerobic digestion

Biomass Power Generation • Biomass: 500 plants in the U.S. • Combustion • Gasification – 20 Plants in the U.S. • Pyrolysis - • Plasma gasification • Anaerobic digestion Point of this slide?

In Big Buyout, Utility to Limit New Coal Plants By FELICITY BARRINGER and ANDREW ROSS SORKIN Published: February 25, 2007 Under a proposed $45 billion buyout by a team of private equity firms, the TXU Corporation, a Texas utility that has long been the bane of environmental groups, will abandon plans to build 8 of 11 coal plants and commit to a broad menu of environmental measures, according to people involved in the negotiations. U.S. Market Begins To See Change? TXU will discard plans to build eight of 11 proposed new coal plants, which would have been major new sources of emissions. Those plants — which would have added more than 9,000 megawatts of new capacity, the equivalent of 3.5 percent of the nation’s current coal-fired power — had been part of a planned $10 billion expansion of coal-fired electricity. TXU, which is based in Dallas, also intends to expand the renewable energy portion of its portfolio and reduce or offset its emissions significantly, said people who were familiar with the plans.

Minnesota – 25% Renewable Energy by 2025 CHICAGO - Minnesota pushed ahead of other US states seeking to combat climate change by enacting a requirement on Thursday that 25 percent of the state's power come from renewable sources by the year 2025. Minnesota is among several states from California to Maine demanding greater use of renewable energy sources such as solar, wind, and biomass, and for caps on emissions that cause global warming. Xcel Energy, which produces half the state's power, had its own goal of 19 percent renewable sources and had reached 10 percent, mostly with wind-generated power. Xcel's new target for renewable sources was set at 30 percent by 2025. "Today, we are leading the nation on the path to a better, cleaner, more independent energy future," said Republican Gov. Tim Pawlenty, who signed legislation on Thursday setting the new state standard. A big hurdle is limited US capacity to build the thousands of wind turbines needed, he said. The state will rely on wind power to meet most of the requirement, with solar power and cellulosic ethanol from prairie grass also potential sources, he said. US proposals to cap emissions and boost use of renewable sources are gaining traction in the US Congress after failing in previous years, Deyette said. Story by Andrew Stern Story Date: 23/2/2007

Government Initiatives Drive Growth Policy Effect RES-E Directive EU White Paper European Public Banks Kyoto Protocol Canadian National Energy Board DOE Gov. Pawlenty Renewable electricity target of 22% in Europe by 2010 €84B will be invested in biomass plants by 2010 Increased lending for renewable power generation to 50% of total financing for new electricity-generation cap. Dictates 12% contribution of renewable energy by 2010 Non-hydro renewable energy will grow to 13% of total capacity (solar, wind, geothermal and biomass) $1.2B hydrogen fuel initiative 25% of MN energy from renewables by 2025

Global Market • India • $3B investment in renewable energy • Goal to provide electricity to 18,000 remote villages by 2012 • Other areas of growth potential • Thailand • Malaysia Market outside of the US and Europe is significant with large projected growth.

Barriers Limit Growth in Biomass Generated Electricity • €1.7B European market size (2006) expected to hit maximum of €2.2B. Growth limited by: • High initial capital expenditure • Logistics of supply • Wind energy competition • High land requirement for biomass materials • Lack of planned feedstock development program • Subsidies to conventional energies

Barriers to Growth High initial capital expenditure Logistics of supply Lack of planned feedstock development program High land requirement for biomass plant Wind energy competition Subsidies to conventional energies Invention Attributes “Micro-plant” $7-13M cost can give ROI in 1st year Local source/supply Uses any biomass Small footprint Wind energy competition Subsidies to conventional energies New Invention Overcomes Many Barriers to Growth in Biomass Generated Electricity

Gasification Revenues from New Capacity(North America) Predicted market given barriers. Does invention increase growth?

Biomass Power Generation is Dominated by a Few Players • 2-4 big players operating on a global scale. • Their primary focus is on reducing waste, generating electricity is a side product. • One example is Energy Products of Idaho. They produce 81 systems to use >200 solid and liquid fuels. Best opportunity to expand into developing country markets by Licensing to a dominant partner with global reach.

Companies in the Biomass Gasification Market Other licensing options exist.

Start-ups in the Microgasification Market • Syngas International • $2.5M invested to date • 3 microplants in pipeline • No revenue to date • Expected ROI 22% with single plant • XEthanol / UTEK • Exclusive worldwide license to technology developed at U of North Dakota • Community Power Corporation • BioMax Power Generation system • Commercially available in 2006 Start-up opportunity would require significant investment.

Is the inventor(s) an ‘expert’ in this field Lanny Schmidt is a recognized leader in his field. Regents Professor Has connections in industry Opportunity Overview People Platform Position What stage of development is the technology? • Proof-of-Principle • Demonstrated in lab • Need to test more types of biomass What is the I.P. position? • Patentable • Attorney opinion – strong claims possible Is the market attractive? • Biomass gasification market • Emerging market in renewable energy • Small growth rate (<10%) • Target market size <$200M What is the technological advantage? • Platform technology • Overcomes many technical hurdles limiting adoption of biomass gasification

Sources & Assumptions Assumption • Initial target market: electricity generation. Future applications include production of ethanol, biodiesel, etc. Sources • DOE statistics • Frost & Sullivan North American Biomass Market Report (2003) • Indian Renewable Energy Report (2003) Primary Interviews (Expert Opinions) • Chris Goralski (3M)

Reactive Flash Volatilization of Solid Nonvolatile Fuels (Z07080)