2. SEGI-AT Sp. z o. o.Energy from the biomass2 Production of energy from the biomass - an option for the sustainable development of industrial land

3. SEGI-AT Sp. z o. o.Energy from the biomass3 Main idea of the project Creating an integral system of renewable energy production comprising 2 main elements: –Pellets production line (production capacity: 1 t/h) –Plantation of an energy plant – a hollyhock species Sida hermaphrodita as a source of biomass for pellets production within the industrial area

4. SEGI-AT Sp. z o. o.Energy from the biomass4 Project developer Limited partnership founded for the purpose of the project: SEGI-AT Sp. z o. o. (Ltd.) KGHM Polska S.A. Other investors

5. SEGI-AT Sp. z o. o.Energy from the biomass5 Shareholders

6. SEGI-AT Sp. z o. o.Energy from the biomass6 Location of the project South-western Poland community Rudna with a deteriorating agriculture and industrial areas High unemployment rate: ca. 20% Protective area around copper works and the flotation waste reservoir (ca. 14 km 2 )

7. SEGI-AT Sp. z o. o.Energy from the biomass7 Plantation of Sida hermaphrodita (1) size: 300 ha (ca. 25.000 plants per ha) very high annual yields (up to > 20 t dry biomass/ha) low climate and soil requirements suitable for industrial land easy in cultivation, traditional methods low moisture content in the biomass (25%) good parameters as a fuel (comparable with wood)

8. SEGI-AT Sp. z o. o.Energy from the biomass8 Unique annual productivity - compared with Salix

9. SEGI-AT Sp. z o. o.Energy from the biomass9 Plantation of Sida hermaphrodita (2) harvesting: December – March stored in the open air easily cut into pieces raw material for pellets production in form of chips cost of dry biomass production: 25 EUR/t

10. SEGI-AT Sp. z o. o.Energy from the biomass10 Sida hermaphrodita – an energy plant

11. SEGI-AT Sp. z o. o.Energy from the biomass11 Plantation of Sida hermaphrodita SpringAutumn

12. SEGI-AT Sp. z o. o.Energy from the biomass12 Pelleting plant (1) Placed in the vicinity of the plantation within the existing infrastructure Production capacity: 1 t/h Expected annual output: 6000 t pellets Energy consumption: 600 MWh/year Energy output from the produced pellets –ca. 30.000 MWh/year (=108.000 GJ/year)

13. SEGI-AT Sp. z o. o.Energy from the biomass13 Pellets production line

14. SEGI-AT Sp. z o. o.Energy from the biomass14 Pelleting plant (2) Consists of 3 main elements: –a dryer –hammer mill –pellet mill Raw material supply for pellets production: –In the initial stage: waste wood from the wood industry –In the long run (after 2-3 years` operation): biomass of Sida hermaphrodita

15. SEGI-AT Sp. z o. o.Energy from the biomass15 High density pellets – environmentally friendly solid bio-fuel, very comfortable in use for both households and industrial plants

16. SEGI-AT Sp. z o. o.Energy from the biomass16 Product characteristics diameter: 6-8 mm length: 2-3 cm density: 1,15 kg/m 3 calorific value: 18 MJ/kg low ash content (0,5% - 1%) without binding agents high grade of homogeneity

17. SEGI-AT Sp. z o. o.Energy from the biomass17 Financial details (1) Total cost of the investment: 1 mln EUR over 2 years (2005-2006) –Pellet production plant: 650.000 EUR –Plantation: 350.000 EUR Initial capital of a new SEGI-KGHM partnership: 670.000 EUR Grant in frames of EU structural funds and PHARE Programme

18. SEGI-AT Sp. z o. o.Energy from the biomass18 Financial details (2) Annual operating costs: 330.000 EUR Annual revenues from pellets sales: 480.000 EUR (80 EUR/t) Annual operating profit: 150.000 EUR

19. SEGI-AT Sp. z o. o.Energy from the biomass19 Prospects for the future EU target: 12% energy from RES by 2010 Polish Strategy for Development of Renewable Energy Sources sets following targets: –7,5% energy from RES by 2010 –14% energy from RES by 2020 Biomass = over 90% RES in Poland

20. SEGI-AT Sp. z o. o.Energy from the biomass20 Comparison of different energy generation systems in family houses Type of fuelPelletsGasOil Cost of 1 GJ of energy [EUR] 5810

21. SEGI-AT Sp. z o. o.Energy from the biomass21 Risks Grant for the project not awarded RE: search for additional investors Incompetitiveness of bio-fuel on the Polish market RE: focus on foreign markets, search for pellets consumers Lower than expected productivity of Sida hermaphrodita plantation RE: supplementing Sida biomass with waste wood or other energy plants

22. SEGI-AT Sp. z o. o.Energy from the biomass22 Future developments (1) Establishing a network of local pelleting plants (1-2 t/h) combined with a system of Sida hermaphrodita plantations Pellets for the individual use (family houses) Segi-KGHM partnership as a pilot project –model system for the production of renewable energy from the biomass Searching for investors for projects based on a similar scenario

23. SEGI-AT Sp. z o. o.Energy from the biomass23 Future developments (2) In the long run: developing pellet market Modernisation of small district heating systems (power of several MW) as well as heating plants (200 kW - 1 MW) in industrial plants and public utilities (schools, hospitals etc.) Package offer: heating plant for pellets + continuous supply of fuel Looking for partners offering technologies of pellets’ combustion to apply in such heating plants

24. SEGI-AT Sp. z o. o.Energy from the biomass24 Questions ???