BIOENERGY PRESENTATION October 19, 2016 I NTRODUCTION TO P INNACLE - - PowerPoint PPT Presentation

BIOENERGY PRESENTATION

October 19, 2016

INTRODUCTION TO PINNACLE

Canada’s largest wood pellet producer:

• In business since 1989, BAT
• Operating 7 plants totalling 1,500,000 tpa

capacity

• Well funded owners (ONCAP)

The gold standard for sustainability:

• Located in BC’s rich fibre basket
• 60 million hectares of forest
• 95% of which is certified
• PEFC Chain of Custody certified
• On track for SBP certification

With superior logistics:

• Private covered hopper fleet of 500 railcars
• Own wood pellet terminal, built to

accommodate Panamax bulkers

• All mills inter-connected to 2 ports by rail
• Long term freight COA’s in place
• Highly regarded delivery track record in

Europe and Asia Winners of:

• BC Export Awards 2013
• Premier’s Award for Job Creation in 2013

Pellet Plant Port

Lavington

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PLANT LOCATIONS IN THE SUBSTANTIAL FIBRE BASKET OF BRITISH COLUMBIA

PLANT CAPACITY 2016

Houston (2006) 220,000t Burns Lake (2011) 440,000t Meadowbank (2008) 200,000t Quesnel (1988, 1999) 90,000t Williams Lake (2004, 2007) 220,000t Armstrong (2007*) 60,000t Lavington (2015) 270,000t TOTAL 1,500,000t TERMINAL CAPACITY 2016 Westview (2013) 1,200,000t Fibreco (Contracted, Third Party) 750,000t TOTAL 1,950,000t

Armstrong Mill Williams Lake Mill Quesnel Mill Meadowbank Mill Burns Lake Mill Houston Mill Legend

Sawmills / Forest Products Pinnacle Plants Ports

Lavington Mill

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PELLET PRODUCTION AT A GLANCE

Hog/Trees Sawdust Shavings Drying Hammering Green Grinding Hammering Dry Pelletizing Shipping Screening Cooling

PHASE I Conventional pellet manufacturing PHASE III PHASE II PHASE IV Pinnacle Pellet complete manufacturing process 4

LOWEST RISK WOOD PELLET SUPPLIER IN THE WORLD

• Operating 7 pellet plants, producing 1.5 million tonnes of wood pellets
• Situated in BC, one of the worlds most sustainable and plentiful fibre baskets
• Having long term residual fibre supply contracts with diversified, senior saw-

millers

• A pioneer in the diversification of feedstock (bark, sawdust, shavings, chips,

harvesting residuals and undersized logs)

• Leveraging 25 years of production experience, proprietary equipment &

technical expertise

• With dual port, rail linked and panamax capable export logistics
• And strongly positioned for growth with ONCAP as an equity partner

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Bulk truck deliveries into hoppers:

• Education facilities, community centres, recreation facilities, prisons,

hospitals, police, military and coast guard detachments, greenhouses.

• Remote facilities often heated with oil or diesel if no gas installed

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INSTITUTIONAL HEATING

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Bulk ship or rail deliveries into silo:

• Carbon neutral alternative to fossil fuels
• Often seasonal demand
• Sensitive to logistics costs

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INDUSTRIAL / CHP

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Full shiploads into storage facilities:

• Co-fired up to 15% with coal
• Dedicated firing with maybe 10% coal

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RENEWABLE ENERGY GENERATION

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PORT OF VANCOUVER

• Fibreco Terminal, third party owned and operated
• Capacity 45,000t silo and shed stored

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PORT OF PRINCE RUPERT

• Westview Terminal, Pinnacle owned and operated
• Capacity 50,000t silo stored

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Canada’s first shipping terminal designed specifically to handle wood pellets

Design Features: Four corrugated metal wood pellet storage silos: 45 m tall, 27 m diameter; 50,000 tonnes total capacity Enclosed belt conveyors and bucket elevators Dust limiting ship loader Berthing dolphins to secure ships Berth capable of handling Panamax-class vessels up to 75,000 DWT

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WESTVIEW TODAY

1 1 1 1 3 4 5 5 6 3 3 4 1

PINNACLE’S CUSTOMER MIX

OUR PURPOSE - RENEWABLE, LOW CARBON ENERGY CO₂

Renewable Bioenergy Wood Pellets Pellet Manufacturing Sawdust, shavings & bark Lumber Carbon sequestration in wood products Photosynthesis And Growth Sawmilling Sunlight and heat Waste Primary Generator Fuel

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RENEWABLES

• We believe that we need all of the Renewables: Sun, Wind, Biomass

etc. Each has their strengths and weaknesses: 1. Wind

• Low capex and low maintenance costs
• Not available all of the time (not dispatchable)
• In the UK we have massive diesel generator “farms” to provide back up
• “not in my back yard”

2. Solar

• Low operating and maintenance costs
• Not dispatchable and massive battery technology is still very expensive

3. Biomass

• Renewable, dispatchable and can be used in existing coal fired plants
• Not enough biomass to replace coal.

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BIOMASS IS PART OF THE LOW-CARBON FAMILY ALONGSIDE WIND & SOLAR

• Alberta has an abundance of

Biomass.

• Plants grow by photosynthesis -

absorbing CO₂ and emitting O₂.

• Mature trees and agricultural crops

are harvested, CO₂ is sequestered.

• Sawdust, bark, wood and

agricultural residuals are gathered for pellet production and then burned cleanly for heat and electricity in place of fossil fuel.

• New replacement trees and crops

are planted.

• A continuous and sustainable

carbon cycle.

Carbon Neutrality

CO2

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• Financial incentive for private and government PPA owners to change the fuel source for

these plants. Reduce fiscal costs.

• Wood pellets have a high level of energy content consistency.
• Conversion from coal to biomass can be achieved without a loss of firming generation

capacity.

BIOMASS CAN REPLACE COAL IN EXISTING COAL PLANTS

Coal 19 gigajoules per tonne Wood Pellets 18 gigajoules per tonne

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• Coal plants can partly or completely be converted to biomass.
• By switching fuel in the existing plants you extend their life and reduce the

shutdown costs beyond 2030.

• Reduces fiscal cost and creates jobs long term.

CHANGING THE TYPE OF FUEL AND REDUCING SHUTDOWN COSTS

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BIOMASS WORKS AROUND THE WORLD

Biomass is a proven commodity in the production

• f Electricity around the world.

BIOMASS GENERATES JOBS

Example of new construction in 2015 using Best Available Technology:

• Facility footprint is small

at only 2.0 hectares

• Capacity 270,000 metric

tonnes per year

• Construction created

120,000 hours of employment

• Full-time direct

employment at the plant (excludes inbound and

• utbound logistics) of 25

individuals

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ALBERTA

Two main levels of opportunity :

• Full scale conversion from Coal to Biomass
• Co firing Coal with Biomass
• Smaller scale community based generation is possible

Policy Environment:

• 2030
• Renewables Wind, Solar and Biomass:
• Biomass is dispatchable

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BIOMASS POTENTIAL IN ALBERTA

Excess wood fiber ~ 400,000 Oven-dried tonnes / Year:

• Beehive Burners still in operation in Alberta (examples include: Tolko Forest

Industries in High Level and Foothills Forest Products in Grand Cache)

• Stable and consistent use of residuals that are periodically utilized as absorbent

material during oil and gas exploration (market has all but disappeared)

• Deciduous species is currently under utilized and would represent an incremental
• pportunity.

Straw in excess of feed market ~ 9 million Oven dried tonnes / Year

• Study by Ian Murray and Company of Edmonton
• More work is require to understand the impact of straw on boilers and the

mitigation strategies that would support the use of this feed-stock

Power generation within existing grid infrastructure that can be dispatched on demand

• Unlike other renewable energy sources like wind and solar that provides

intermittent power supply, biomass generation can be dispatched in response to peak demands.

• Capital cost efficiency is further enhanced by leveraging current gird infrastructure.
• Stable Net Calorific Value of fuel – 18.2 GJ / Tonne

Alberta’s existing rail Infrastructure is well suited to provide for cost and carbon efficient delivery of both “Made in Alberta” biomass solutions

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OTHER POTENTIAL

1. USA

• Clean air act
• Biomass as a transition fuel in the “coal valleys of USA”

2. China 3. India

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BIOMASS AS A FEEDSTOCK

1. Transportation 2. Biofuels 3. Biochemicals

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PARIS ACCORD

• Great step forward but not enough
• Urge you to be responsible citizens in you daily life and an

work

• Commute to work on a bike
• Turn down your heat or shut off the AC
• Push your policy makers