Economics CAFI II Stage Gate Review Denver, CO May 1, 2007 Tim Eggeman* - Neoterics International Richard Elander - National Renewable Energy Laboratory NEOTERICS INTERNATIONAL Using Technology to Create Business Innovation

2 Boiler + Generator Block Flow Hydrolysis + Fermentation Feed Handling RecoveryPretreatment Stover Syrup + Solids ChemicalsWater EnzymesCO 2 Water EtOH Steam Power

3 Aspen Plus – GUI w/ Hierarchy

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5 Current vs. Goal Cases Current: Laboratory Performance –Pretreatment –Conditioning –Enzymatic Hydrolysis –Fermentation Goal: Likely Performance of Above Steps at Commercial Scale

6 Solicit Guidance from CAFI Advisory Board Enzymes –Loading –Type –Cost basis Fermentation –Conditioning –Concentration basis –Scale up of lab data Pretreatment Configuration –Reactor cost –Chemical recovery –Consistent basis for improvements

7 CAFI 2 vs. CAFI 1 Poplar vs. Stover Improved Definition and Consistency of Modeling Assumptions Improved/Tailored Enzyme Cocktails Conditioning & Fermentability Tests

8 Economic Modeling Capital Costs Fixed - Direct Purchased Equipment Installation - Indirect - Contingency - Start-up Working Revenues Ethanol Sales Electricity Sales Operating Costs Variable – Stover Enzymes Other Fixed - Labor Maintenance Insurance Depreciation Discounted Cash Flow 2.5 yr Construction, 0.5 yr Start-up 20 yr Operation 100% Equity, No Subsidy Rational EtOH Pricing Rather Than Market Pricing 10% Real After Tax Discount Rate Performance Measures Total Fixed Capital Per Annual Gallon of Capacity Plant Level Cash Costs Minimum Ethanol Selling Price (MESP)

9 Results (Interim)

10 Fixed Capital Stover Goal, Ideal Pretreatment

11 Cash Costs and MESP Stover Current Cases, Proof Year: 4th Year of Operation $/gal EtOH MESP Cash Cost Plant Level

12 Conclusions Consistent Protocols and Materials Improved Methodology vs. CAFI I Yield Drives Economics

13 Acknowledgements US Department of Energy Office of the Biomass Program, Contract DE-FG36-04GO14017 The National Renewable Energy Laboratory Biomass Refining Consortium for Applied Fundamentals and Innovation (CAFI) Natural Resources Canada Genencor International

14 Project Institutions

15 Feedstocks

16 Feedstocks