Future Fuels for Flight and Freight Competition (F4C) - Prospective Bidders Event Presenters: Rob Wakely & Jon Bray (DfT) Alexandra Humphris-Bach (Ricardo) Richard Taylor (E4tech) 21 September 2017
2 Agenda Time Presentation By 1400 Registration 1430 Welcome & housekeeping Jon Bray, DfT 1435 Introduction to F4C Rob Wakely, DfT 1445 1505 1525 Q&A Overview of programme: - Eligibility criteria - Evaluation process Experience from the Advanced Biofuels Demo Competition Alexandra Humphris-Bach, Ricardo Richard Taylor, E4tech Andy Cornell, Advanced Plasma Power Ed Wilson, Nova Pangaea Technologies Expert Panel, chaired by Ausilio Bauen, E4tech 1610 Summarising key points Alexandra Humphris-Bach, Ricardo 1615 1700 Networking & refreshments
3 Welcome and housekeeping Panel: Rob Wakely (DfT) Jon Bray (DfT) Justin Brock, Project Director (Ricardo) Alexandra Humphris-Bach, Project Manager (Ricardo) Mark Ramsay (Ricardo) Ausilio Bauen (E4tech) Richard Taylor (E4tech) Andy Cornell (Advanced Plasma Power) Ed Wilson (Nova Pangaea Technologies)
4 Future Fuels for Flight and Freight Competition (F4C) - Prospective Bidders Event Introduction to F4C
September 17 Our approach to low carbon fuels is focused on realising the environmental and economic benefits offered by waste-derived transport fuels. 2050 Waste Waste The carbon reduction challenge Driving value from wastes A lucrative global market F4C Bidders Information Event Moving Britain Ahead
September 17 The Future Fuels for Flight and Freight Competition is our latest initiative aimed at supporting the development and deployment of sustainable low carbon fuels in the UK. RTFO Advanced Plasma Power Nova Pangaea Technologies F4C Creating a domestic market Kick-starting a domestic industry Targeting strategically important fuels F4C Bidders Information Event Moving Britain Ahead
7 Overview of the Programme
8 Objectives for projects within the competition are: Technology demonstration: deliver meaningful technical, route to market, and/or supply chain innovation Fuel production: produce a sufficient quantity of fuel for testing or sale Commercial potential: have a clear strategy for commercialising the technology & products Emissions reduction: demonstration of greenhouse gas reduction & highest standards of sustainability Project execution: bring together a team with the expertise & experience to deliver
9 Support available Stage One F4C will provide up to 2 million of Project Development Funding to support the development of proposals Stage Two F4C will provide up to 20 million in capital grant funding over three years (2018-21) for major demonstration projects providing transformative and innovative solutions Only projects that successfully applied for Project Development Funding (Stage One) can apply for Capital Grant Funding (Stage Two). Project concepts must be investment and construction ready after completion of Stage One in order to be eligible to apply for Stage Two.
10 Timings and overall process Overall Timetable 27 April 2017 Competition launched 1200 hours, 08 December 2017 Application deadline for Stage One applications March 2018 Announcement of bids selected for Project Development Funding 30 September 2018 End of Stage One Project Development Funding 30 September 2018 Application deadline for Stage Two applications Early January 2019 Announcement of winning projects 30 September 2021 End of funding period
11 Future Fuels for Flight and Freight Competition (F4C) - Prospective Bidders Event State Aid Article 41, the Block Exemption for investment in the promotion of energy from renewables: maximum single award is 15M per project Any grant awarded under Article 41 in Stage One must be deducted from the maximum available in Stage Two. Maximum aid intensity is set at 50% total costs for Stage One. This may be uplifted by 10% for medium-sized enterprises, 20% for small enterprises, 15% for projects located in Assisted Area (a) and 5% for projects located in Assisted Area (c). Note: These are General Block Exemption Regulations guidance notes for information only. If in doubt, please obtain advice from your own professional advisers.
12 Stage One overview Support development towards a full project proposal and application for Stage Two funding. Stage One applications should be focused on the first stages of delivery, proposed outputs and projected project plans for the final Stage Two project should be at least included in an initial form. Maximum award for Stage One is 500k per project there is no minimum Even if you do not require development funding, you must submit a Stage One application stating a request for 0 to be eligible for Stage Two funding. During the Project Development Phase applicants need to identify what Stage Two activities are to be funded. The Competition Delivery Partners will be available to provide guidance and support. Applicants are expected to use the Project Development Phase to work on cofunding for Stage Two, as this will be a key point of assessment in judging Stage Two applications.
13 Eligibility Criteria Stage One Fuel scope The main output(s) from the project must be fuel that is capable of being used in aviation or HGVs. Ideally, fuel (whether blended/unblended) that meets current fuel specifications and can be used immediately without engine modifications. Fuels that do not meet current fuel specs will also be considered, provided that there is clear evidence of the fuel s future commercial potential and a credible pathway to decarbonising aviation or HGVs sectors. NB: The fuel does not have to be a RTFO development fuel, but those fuels with a higher maximum displacement of fossil diesel or jet will score more highly in the assessment of Stage One applications
14 Eligibility Criteria Stage One Technology scope The plant proposed must be at the appropriate Technology Readiness Level (TRL): Already at least TRL 5 (pilot plant), and must successfully attain at least TRL 6 (small demo plant) by the end of the project. Globally (& in the UK), similar technologies must not already be commercialised, i.e. at TRL 8 or 9. TRL is based on the combination of feedstock, technology and fuel. Bidders will have to evidence how their TRL compares to the TRL of other providers. Bids that have two independent conversation plants need assess the TRLs separately. TRL Plant stage 1 Basic research 2 Theoretical research 3 Applied research 4 Bench-scale test rig 5 Pilot plant 6 7 Small-scale demonstration plant Full-scale demonstration plant 8 First commercial plants 9 Mass deployment of fully commercial plants
15 Eligibility Criteria Stage One Feedstocks & sustainability Feedstocks used must be wastes or residues (or intermediate fuels derived from them), and have a regard to the waste hierarchy, i.e. not taking supplies from existing more environmentally beneficial uses. If blending feedstocks, and some are not wastes/residues, your maximum % of F4C funding must be reduced accordingly. The fuel supply chain (from original feedstock to tank/wing) must have a clear path to achieving a GHG reduction of at least 70% compared to a reference fossil fuel, once the technology is scaled-up and commercialised. NB: During the period of plant operation, RTFO GHG thresholds and other sustainability rules that apply at that time must be met for projects wishing to gain RTFC revenues this is separate to F4C eligibility.
16 Eligibility Criteria Stage One Feedstocks & sustainability It is not a requirement that demo plants (TRL 6-7) funded under F4C achieve >70% GHG savings, because of the likely suboptimal sizing or lack of process integration within such plants. However, if a first commercial plant (TRL 8) is proposed for the F4C, this must achieve >70% GHG savings.
17 Eligibility Criteria Stage One Project details The demonstration-scale plant funded under the Competition must: Have completed commissioning no later than September 2021 note this is now 6 months later compared to when the F4C was launched, giving the same amount of time for construction. Be located in the UK. Under State Aid Rules, the amount of grant indicated for the Stage One plus Stage Two activities must be below the maximum grant limit of EUR 15 million. NB: Stage Two has an additional set of eligibility criteria that must be met by the time of the Stage Two application.
18 Eligibility Criteria Stage Two Any Stage Two application must build on their winning Stage One Project Concept Application. The lead applicant and project objectives should not change from Stage One. By the Stage Two application, the applicant must have: identified a site, ideally having submitted or gained planning permission for use of that site for the intended project. at least Heads of Terms in place with a feedstock supplier. at least Heads of Terms in place with a fuel off-take partner. at least Heads of Terms in place with any match funders, although firmer commitments from investors will score more highly in the assessment of Stage Two applications a detailed project cost plan, with detailed engineering design work having been completed where possible
19 Eligibility Criteria Stage Two The Stage Two applicant must be able to demonstrate the commercial potential of the technology & supply chain to deliver significant quantities of advanced low carbon fuel when delivered at full scale. The proposed feedstocks, if not 100% renewable (e.g. Municipal Solid Waste), must demonstrate the environmental benefit of using the feedstocks for fuel production (based on a full consequential lifecycle GHG assessment), compared to the likely alternative destination of the feedstocks. Where any changes (from Stage One) are required, these must be supported by research/evidence produced during the preparation of Stage Two applications.
20 Eligible costs Stage One Stage One funding is expected to support development towards a full project proposal and application for Stage Two funding: Feasibility studies In-depth research Technical advice Addressing legal issues Securing match funding Development of prototype Hosting meetings with potential consortia members for Stage Two Progressing applications for planning or other consents Formalising a consortium or partnership arrangement Strategy work and option appraisals Developing detailed designs, project plans, risk assessments, and detailed budgets (these will be required for Stage Two applications) Hosting meetings between applicant consortia and others necessary to further the development of the project Progressing procurement (Stage Two applicants must show evidence of the tendering process followed for any contracted work)
21 Ineligible activities and costs Stage One Any costs incurred before a Stage One grant offer letter has been signed with DfT. Purchased goods & services to build and commission the proposed project. Purchase cost of any land Input VAT (except where it cannot be reclaimed by grantees). Interest charges, bad debts. Hire purchase interest & any associated service charges. Loan repayments. Mark up & profits. Profit earned by a subsidiary or associate undertaking work sub-contracted under the project. Notional costs (e.g. opportunity costs). Audit fee for certification of claims by an independent accountant. Grants that contribute directly to a Company s distributed profits. Endowments. Funds to build up a reserve or surplus. Retrospective funding.
22 Eligible costs Stage Two Stage Two funding applications must build on their winning Stage One Project Concept Application and funding will only encompass: Capital Investment Costs: Cost of all purchased goods & services necessary to build & commission project, includes; fuel used in installation & labour up to & including certified acceptance of commissioning; Grant eligible equipment includes conversion technology, feedstock preprocessing equipment, and monitoring & control equipment. Buildings and building work ONLY for: Steelwork as an integral part of equipment support structure Excavations for fuel storage Foundations & equipment mounting pads insulated linking pipework w/ calorifiers, pumps & controls to connect to existing technology Remedial work on building fabric only to make good after equipment installation Purchased services for evaluation of project & dissemination of results. Own labour costs, including agreed overheads (not profit), for construction, commissioning, and project management. These should be linked to design, construction, commissioning & evaluation of equipment & auditable as such. Includes applicant s own costs and eligible costs incurred by consortium & companies connected to any consortia partner
23 Ineligible activities and costs Stage Two R & D. Feasibility studies. Business start-up or development. All costs associated with progressing applications for planning or other consents. Purchase cost of any land Input VAT (except where it cannot be reclaimed by grantees). Interest charges, bad debts. Hire purchase interest & any associated service charges. Loan repayments. Mark up & profits. Profit earned by a subsidiary or associate undertaking work sub-contracted under the project. Notional costs (e.g. opportunity costs). Audit fee for certification of claims by an independent accountant. Grants that contribute directly to a Company s distributed profits. Endowments. Funds to build up a reserve or surplus. Retrospective funding. Any costs already being funded by another grant source, or are to be funded by another grant source in the future. Advertising, marketing, sales activities, entertaining. All costs associated with operation of equipment following commissioning or acceptance by the ultimate owner.
24 Evaluation Process
25 Future Fuels for Flight and Freight Competition (F4C) - Prospective Bidders Event Evaluation Process Stage One Application deadline: 1200 hours, 08 December 2017 Application form plus required Appendices: Technical specifications & project schematics A summary of the overall work plan An outline risk assessment An outline project budget Details of matched-funding from project financiers (where appropriate) One electronic copy must be sent to F4C@ricardo.com prior to deadline An identical hard copy must be submitted within five working days of deadline F4C Stage One Ricardo Energy & Environment Gemini Building, Fermi Avenue, Harwell, Didcot, OX11 0QR
26 Evaluation Process Stage One Applications acknowledged by email and a URN will be issued within two working days of the closing date. URN should be used in all communications. Applications will be screened against the eligibility criteria, assessed against the selection criteria by technical and commercial experts from the Competition Delivery Partner, and submitted to an external Selection Panel for review. The resulting recommendations are then submitted to a DfT Project Board and the Investment Board, decisions iterated if required, before Ministerial sign-off. Assessment of proposals will be based only on information contained within your application. We will contact you if clarification is required.
27 Experience from the Advanced Biofuels Demo Competition
ABDC Experience BioSNG Commercial Demonstration Facility September 2017
29 APP AND PARTNERS ARE BUILDING THE WORLDS FIRST BIOSNG PLANT
FULL CHAIN 25M SMALL COMMERCIAL FACILITY SECURED, PROCESSED WASTE FEEDSTOCK CONVERSION TO HIGH QUALITY SYNGAS CONVERSION TO GRID SNG DELIVERY TO GAS NETWORK EXPLOITING INNOVATIVE TECHNOLOGY, THIS WILL BE THE WORLD S FIRST GRID CONNECTED, FULL CHAIN, WASTE TO SNG FACILITY OPERATING AT COMMERCIALLY REPRESENTATIVE SCALE UNDER COMMERCIAL CONDITIONS. 30
31 BIOSNG COMMERCIAL PLANT IN NUMBERS
LESSONS LEARNT Read the competition documents including feasibility study. The competition requirements and scoring criteria are very clear and are taken seriously. Engage with the DfT and advisors. Their culture is very collaborative. Be realistic. There is no such thing as a perfect project and its better to discuss and address weaknesses than ignore them. 32
Thank You
F4C Bidder s Day Department for Transport 21 st September 2017
The AdvancedBioFuelsDemonstrationCompetition project Nova Pangaea Technologies Established in 2008 to develop and commercialise a new technology (the Refnova process) To process non- food ligno-cellulose (biomass) into its key components Complete fractionation (only physical and thermochemical processes): i. To extract value at each stage of process ii. Whilst removing inhibitors to provide pure products and optimal yields Competitive processes mainly in the USA have struggled due to use of costly, complex processes (gasification, enzymes, catalysts)
Introduction to Feedstock Renewable Sustainable Abundant Local NPT is solely focused on 2 nd Generation feedstocks - Forestry residues and waste - Sugar cane trash and bagasse - Olive Oil pomace - Palm oil residues - and more
C6 Cellulose Steam Thermolysis: ~20 kg/hr Pilot Plant Running in Latvia Mapping of parameters space for yield optimisation Identify the maximum capacity of the pilot unit (required for scale-up) Obtain basic kinetics of the thermolysis reaction to guide reactor design
1tph Continuous In-Line Demo Plant: C5 Carbofrac CF100 Installed Dialogues ongoing with
The AdvancedBioFuelsDemonstrationCompetition project Lessons Learned Openness and transparency is rewarded with support and pragmatism Milestones need careful thought and can be difficult to manage. But also understand that the DfT needs target achievements to pay out grant claims and also to manage government funding The management process does not involve extensive administration There is genuine interest in your technology and its success
Thank you for your interest.
41 Q&A
42 Summary Stage One application deadline: 1200 hours, 08 December 2017 State Aid Rules apply Applications must meet minimum eligibility criteria Stage Two application deadline: 30 September 2018 Only successful Stage One applications can apply for Stage Two funding F4C website and helpdesk: ee.ricardo.com/f4c F4C@Ricardo.com
43 Networking