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RGVSG RENEWABLE ENERGY PROJECT

RGVSG RENEWABLE ENERGY PROJECT. Presentation prepared by. INTRODUCTION. RGVSG proposes to construct a $23.8 million Clean Energy and Clean Air Project The Project will involve partial funding from the North American Development Bank (NADB)

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RGVSG RENEWABLE ENERGY PROJECT

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  1. RGVSG RENEWABLE ENERGY PROJECT Presentation prepared by

  2. INTRODUCTION • RGVSG proposes to construct a $23.8 million Clean Energy and Clean Air Project • The Project will involve partial funding from the North American Development Bank (NADB) • Certification by the Border Environment Cooperation Commission (BECC) is required

  3. PROJECT OBJECTIVES • Project needs to result in a net reduction in the emission of air pollutants • The Upgraded Facility should utilize all of the bagasse for on-site energy production with excess energy available that can be sold • Improve efficiency for existing needs and for future expansion of Mill capacity

  4. BACKGROUND • RGVSG Mill has been in existence since 1973 and employs 188 full-time personnel (approximately 565 personnel during the grinding season) • The RGVSG Cooperative has a membership of 127 sugar growers and is the only Cane Sugar Mill in the State of Texas

  5. BACKGROUND • Project is located 2 ½ miles west of the City of Santa Rosa on Hwy 107 • The RGVSG members actively farm up to 47,000 acres of sugar cane (3% of the arable land in RGV) yet provides almost 12% of the GDP in the RGV ($75M/Yr)

  6. PROJECT HISTORY • RGVSG contracted with Schaffer & Associates in 1998 to conduct planning and design work for a two-phase expansion of the Mill • Schaffer & Associates were the original design engineers in 1972 when the Mill was constructed • Phase 1 includes Bagasse & Boiler Upgrade • Phase 2 includes Boiler House Upgrades

  7. PROJECT HISTORY • C-K Associates were contracted by the RGVSG in 2000 to complete the air emissions report, computer modeling and permit applications for the Air Quality Permit • In 2002 RGVSG determined that due to market conditions and past performance, funding for the $23.8 million Project would be sought to implement the design of the Phase 1 Mill Expansion

  8. PROJECT HISTORY • RGVSG contacted NADB to request partial funding under the new mandate program by NADB • Turner Collie & Braden Inc. (TC&B) was contracted by the RGVSG to coordinate and prepare the required Project Certification Documents for BECC approval • NADB contracted Pollutech International Limited to complete the technical review on behalf of the NADB

  9. SUGAR MILL PROCESS • The proposed Mill Operation is 200 operating days based on 100% new boiler capacity and a maximum of 70% old boiler capacity • Plant was originally designed for 7,500 tcd (tons of cane per day) which has been upgraded to 10,000 tcd and will remain at this capacity for the Project • Potential to expand to 15,000 tcd with the implementation of Phase 2 Improvements in the future and change in US Quota (Farm Bill)

  10. SUGAR MILL PROCESS • General Process of Operation includes… - receipt and weighing of cane at the mill - washing of raw cane to remove soil - heavy duty shredding to prepare for milling - milling (7 mills in tandem) to remove 95% of sugar juice in cane - sugar juice limed and heated for contaminant removal - clarification of heated and limed juice - clarified juice to pre-heaters to produce concentrated syrup - concentration of syrup in vacuum pans to form crystalline sugar - batch centrifugation to separate sugar from liquor (molasses) - storage of crystalline sugar in the sugar warehouse

  11. Receipt of Cane at Mill

  12. Washing/Shredding of raw cane

  13. Milling of Cane (7 mills in tandem)

  14. Heating/Evaporation

  15. Separation of Sugar/Molasses

  16. Storage of Raw Sugar

  17. Storage of Molasses

  18. Bagasse Handling/Storage Area

  19. PROCESS FLOW CHART

  20. MASS BALANCE SUMMARY NOTE: WATER MAKES UP THE REMAINING 48% LOST TO PROCESS & EVAPORATION

  21. PROJECT DESCRIPTION • The proposed project includes… - conversion of all bagasse conveyors to fully automated belt conveyors - expansion and upgrade of the bagasse storage building - conversion of the boiler building to handle the modified bagasse conveyor system - installation of a new high efficiency boiler - new condensate storage tank - rebuilt 6,000 KW turbine generator

  22. New Bagasse Handling System • Necessary to remove limitations on the delivery of the primary fuel source for the boilers • Significantly reduce or eliminate the need and associated costs of the front end loaders and operators

  23. New Boiler • The addition of a new boiler to increase steam capacity by 300,000 lbs/hr for total capacity of 800,000 lbs/hr (60% increase) • A wet scrubber and mechanical dust collector to reduce air emissions • Since the Plant only needs 540,000 lbs/hr to operate, existing boilers are operating at reduced capacity (reduced air emissions from both existing and new boilers)

  24. TURBINE GENERATOR • New Boiler will be coupled with a Topping Steam Turbine (already purchased) and a new 6000 KW Turbine Generator • Will bring installed power to 11,000 KW • Will enable the Plant to produce energy for operation and export (sell) excess energy

  25. PROJECT BENEFITS • Reduction in use of fossil fuels through the implementation of a renewable energy source through production of 11 MW leaving 5 MW for sale • Eliminates the need for purchase of 1.7 MW of outside energy that will be available for use by others • A 42% reduction in total mass of air pollutants • Increased level of service to RGVSG members

  26. PROJECT COSTS Source: NADB Pollutech Report Note: Payback does not show any cost recovery from the sale of power

  27. PLANT POWER BALANCE

  28. PLANT POWER SUMMARY Note: based on 24/hr day, 150 days per year (3,600 hours/year) Source: NADB Pollutech Report, January 2003

  29. AIR QUALITY • The RGVSG expect to receive the draft permit from the TCEQ for the Mill Operations – issuance of final permit within 60 days after public comment period (Consolidated Permit No. 114) • The RGVSG is defined as a “major stationary source” under the Federal Clean Air Act • The RGVSG also has a Cane Burning Permit

  30. AIR QUALITY • RGVSG is permitted for… - 2,490.4 tpy CO - 0.54 tpy SO2 - 233.2 tpy Nox - 222.08 tpy CO - 443.88 tpy VOC • As a result, the RGVSG Mill is subject to PSD Regulations (Prevention of Significant Deterioration) thus must conduct analysis of BACT

  31. AIR QUALITY • The proposed air quality permit limits the operation of the existing boilers at 70% capacity and the new boiler at 100% capacity (note power required for 10,000 tcd results in 29% capacity for old boilers) • The reduction in total air emissions for the upgraded facility results from the reduced operation of the existing boilers and increased efficiency of the new boiler

  32. PSD EVALUATION • Growth Analysis – No additional air emissions from off-site growth • Air Quality Impact Analysis – modeling analysis adequately evaluates the total ground level concentrations of NO2 from improvements • Soils/Vegetation Analysis – the projected NO2 concentrations are below the standards and significant level thus no adverse impact • Visibility Impairment Analysis – plant is located in sparsely populated area with no scenic vistas or airports thus no impairment • Area Impacts – the plant is located 1,110 km from the closest Class 1 Area (Big Bend) thus no impact (>100 km separation)

  33. PROJECTED EMISSIONS 1 – Actual reported emissions based on stack testing of October 2001 2 – Projections from Pollutech Analysis – Boilers #1 to # 4 at 34%, new Boiler at 90%

  34. CROP BURNING • In addition to the Air Quality Permit for the Plant, the RGVSG also has a Crop Burning Permit under Order 94-35 • The cane burning is authorized only until such time that an alternative method of harvesting becomes technologically practicable and economically reasonable and which would not require outdoor cane burning

  35. CROP BURNING • Permit was developed through input of the “Sugarcane Burning Task Force” which included the Sierra Club • There are a number of conditions that must be met that include… - RGVSG shall report each year on program to stimulate development of harvesting methods that eliminate outdoor burning - Submission of a comprehensive map of burn areas prior to harvesting - A series of preharvest burning conditions that limits burns to specific times and conditions and maximum number of acres per day in each quadrant (200 acres) - RGVSG was required to monitor cane burn for a 1 year period after permit was issued in 1994 by an environmental firm for PM10 emissions before, during and after burns to set the baseline.

  36. CROP BURNING • RGVSG is continuing to evaluate alternative technologies to cane burning at this time • This past year the RGVSG reported that almost 30% of the cane was “green harvested” and that they project this to increase in the future

  37. ENVIRONMENTAL ASSESSMENT • TC&B has provided an environmental assessment of the project in support of the Step 2 Report • These findings are summarized below: - Air Quality impacts are significantly reduced - Project promotes the use of renewable energy sources - Project reduces reliance on fossil fuels - There are no water/wastewater issues, Plant is effectively Zero Discharge although a Discharge Permit is in effect

  38. ENVIRONMENTAL ASSESSMENT • RGVSG has a Stormwater Pollution Prevention Plan with proactive monitoring • Cumulative Impacts are positive to the environment • Positive socioeconomic impact through short-term impacts due to construction and long-term due to increased sustainability and efficiency • RGVSG is proactive towards environment as evidenced by P2 Site Assistance Visit/Small Business Compliance Audit/TCEQ Pilot EMS Program

  39. BECC CRITERIA

  40. PROJECT STATUS • Currently, the design has been completed for the Phase 1 and Phase 2 Expansions with some portions of Phase 1 already being bid with analysis of contractor bids • RGVSG is seeking certification approval by the BECC in March 2003 • The Step 2 Report and Technical Evaluation by NADB will be completed by February 3, 2003

  41. PROJECT SCHEDULE • Project approval on March 27, 2003 • Completion of PPA and Loan Closings in late 2003/early 2004 • Completion of Bagasse Handling Facilities in 2004 • Completion of Boiler/Generator Facilities by April 2005 (12 months lag time from order to delivery of boiler)

  42. PUBLIC COMMENT • Remember to sign the attendance log and survey • If you do not wish to speak, written comments may be submitted to: Rio Grande Valley Sugar Growers, Inc. P.O. Box 459 Santa Rosa, Texas 78593 Attention: Jack Nelson, President • Comments will be accepted up to February 3, 2003

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