June 27, 2017

DTE Marietta:

Solvay CHP Project

Marietta, Ohio

2

Global leader in

production of:

SULFONE

POLYMERS

Cell Phone Components

Aviation

PlumbingKidney Dialysis

Filter Media

Water Filtration

Media

Medical

Solvay Specialty Polymers USA, LLC

Company Overview

3

Solvay Specialty Polymers USA, LLC

Marietta, OH Site Information

• 309 full-time employees

• 24/7 operation

• Former UC industrial complex

• Process heating – steam/hot oil

• Lost steam supply in 2010 (AMP Ohio

Gorsuch Plant)

• Electricity supply reliability issues

• Two polymers units – both continue to

expand – strong customer demand

Marietta, OH

The Power & Industrial group is a leading developer of energy-related projects in North

America for energy-intensive industrial, commercial and institutional customers.

• Revenue $2.2 Billion

• Net Income $95 Million

• Assets $0.9 Billion

• Employees ~700

• U.S. Presence 66 Projects in 17 States

4

Power & Industrial Key Facts

Power & Industrial Headquarters

414 South Main St.

Ann Arbor, MI

DTE Energy Key Facts

DTE Energy Co. (NYSE: DTE) is a diversified energy company involved in the

development and management of energy-related businesses and services nationwide.

• Revenue $10.3 Billion

• Net Income $863 Million

• Assets $29 Billion

• Credit Rating BBB

• Employees 10,000

DTE Energy Company Overview

5

DTE P&I Project Sites

Providing fully integrated, comprehensive energy solutions

Power and Industrial Business

6

On-Site Energy projects create value for

customers by:

• Reducing operating and maintenance

costs by operating utility systems

efficiently and reliably

• Reducing labor costs

• Reducing fuel costs through fuel

switching or efficiency gains

• Reducing retail power costs through

self generation or efficiency

improvement

• Reducing or eliminating capital spend

on existing infrastructure

• Improving emissions footprint

associated with utility systems

• Offering commodity management

services to manage fuel purchases and

energy purchases/sales

• Allowing customers to focus on their

core business

[Applicable to Solvay / DTE Marietta project]

DTE P&I Third Party

On-Site Energy Value Proposition

7

Solvay drivers for CHP• Reasons for CHP – control of energy reliability, reduction of energy costs

• Reasons for third party – focus on core business, eliminate capital spend on utilities

Solvay initial development activities• RFP process – initial screen, phone interviews, short list, selection

• Technical solution – collaboration with DTEES

• Commercial structure – third party DBOOM, open-book design/procurement

• Partner with AEP to explore opportunities

Solvay/DTEES development activities• Site selection – interconnections, elevation, access, public roadways

• Risk allocation – EPC, operations, performance, commodity

• Utility interconnections – natural gas, electricity, city water

• Regulatory issues – air permitting, regulated utility triggers

EPC activities• Contractor selection

• Schedule considerations with Solvay process and temporary boiler operations

• Start-up / transition to operations

Facility Development Approach

Sizing the CHP Solution

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•Steam and power requirements

•Other sizing considerations:

–Redundancy

–Size to thermal, size to electrical, import/export thermal, import/export electrical

0

2000

4000

6000

8000

10000

Po

we

r (k

W)

Power Required and Power Supplied

Purchased from AEP Purchased from DTEES

0

20000

40000

60000

80000

100000

120000

140000

0

40

80

120

160

200Natural Gas Required and Steam Supplied

Gas Turbine NG Usage Duct Burner NG Usage Steam Demand

MM

Btu

/hr

Ste

am U

sage

(lb

/hr)

9

• Solar Taurus 70 GT

• 150 k-lb/hr HRSG

• 2 x 80 k-lb/hr package boilers

Water Treatment Make-up Water

Condensate Return

HRSGDuct

BurnerAir

8MW Gas Turbine

Natural Gas

Deaerator & Feedwater

Solvay

80kpph boiler

80kpph boiler

Power to Solvay

Facility Combined Heat and Power Configuration

• Water treatment

• Black start generation

• 1.75 miles of interconnects

CHP Development Schedule

10

7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15

FCODSCOD

Request for

Qualifications

Site #1

Air Permit

App

Site #2

Air Permit

AppRaise

Site

Site #3

Air Permit

App ConstructionSelection

Proposal

London Olympics Sochi Olympics Brady Hoke’s

Last Game

Brady Hoke’s

First Game

7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15

COD

Request for

Qualifications

Air Permit

App ConstructionSelection

Proposal

Proposed

Actual

Be ready for development challenges

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AMP Ohio

Eramet

Energizer

Solvay

AmericasStyrenics

#1

#2

#3

A

B

C

D

Actual

Final

LocationE

12

Facility Construction Progress

Construction

Site on June 3, 2014

Groundbreaking

on May 14, 2014

Offloading HRSG

on June 6, 2014

13

Facility Construction Progress

Project sign

on July 9, 2014

Back-up boilers

on June 17, 2014

Gas turbine

on July 10, 2014

14

Facility Construction Progress

Rack supports

on August 14, 2014

Building steel

on July 29, 2014

Building

on October 2, 2014

15

Solvay

• Estimated ~$6MM utility savings over life of supply agreement – varies with markets

• Enlisted assistance from AEP in 2013 – Energy Efficiency Program

Significant incentives helped with overall plant/project justification

• Utilities largely provide by CHP

100% of Solvay steam and 97% of Solvay electrical requirements provided by CHP

Continue to provide steam to Americas Styrenics

• Platform to evaluate new opportunities including efficiency improvements, expansion,

additional systems

DTE P&I

• $35 million installation over 18 months

• 10 full-time O&M jobs, 100+ construction jobs

• 20-yr supply agreement (CHP property leased to DTE Marietta)

• Coordination committee (w/ Solvay for key O&M decisions)

• Similar DTE P&I facilities:Cincinnati, OH industrial complex CHP

Ashtabula, OH industrial complex CHP

• New regional CHP opportunities in OH, WV, MI, and KY

What does CHP mean to Solvay and DTE P&I

today?

16

DTE Marietta constructed, owns, and operates a natural gas-

fired cogeneration system to supply steam and electricity to

Solvay Specialty Polymers USA in Marietta, OH under a long-

term energy services agreement.

• Experienced team

• Collaboration of

parties

• Transparency of

costs, as necessary

• Aligning interests of

parties

• Life cycle

perspective

• Risk analysis and

allocation

Characteristics of a Successful Third

Party CHP Project

COD on February 1, 2015

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1. Drivers for outsourcing – modernizing infrastructure, right-sizing infrastructure,

fuel switch, conservation of internal resources

2. Counterparty details – rated entity, creditworthiness

3. Term expectation – minimum/maximum

4. Commercial operation date expectation – drivers, absolute deadline

5. Decision process/milestones

6. Power requirement – voltage and expected MW with as much granularity as

possible (hourly, daily, monthly, seasonally, annually, etc.) – demand side review

7. Steam requirement – pressure, temperature, and expected flow with as much

granularity as possible (hourly, daily, monthly, seasonally, annually, etc.) –

demand side review

8. Condensate return requirement – temperature and expected flow with as much

granularity as possible (hourly, daily, monthly, seasonally, annually, etc.) –

demand side review

9. Fuel purchase obligations – pass-through actual

10. Land availability – greenfield/brownfield

11. Land ownership – lease/purchase/site license

CHP Project Considerations

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12. Land condition – environment issues, indemnities

13. Current steam/power configuration – electric utility, natural gas utility, other fuels,

existing equipment

14. Industrial interconnections responsibility – install/own/maintain

15. Utility interconnections responsibility – natural gas, electric

16. Existing infrastructure/site services – available back-up equipment, water

treatment, waste water, potable water, fire water, compressed air

17. Capital cost treatment expectation – open book, closed book

18. Permit expectations – air, water intake, water discharge, separate permits,

combined with existing

19. Operations approach – labor, routine maintenance, major maintenance, etc.

20. End of term expectation – seller own, buyer own, seller purchase at fair

market value, remove, abandon in place

21. Termination event expectation – Buyer events, Seller events, extended

force majeure, change in law, cure periods, termination payments,

ownership

22. Incentives – federal, state, and local

23. Draft term sheets or pro forma agreements

CHP Project Considerations

19

Mike Edison

Manager, Business Development

DTE Energy Services

Michael.edison@dteenergy.com

(o) 734-302-8925

(c) 734-353-0537

Thank You