Upskilling for Productivity

Southern Institute of Technology

July 2009

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Overview of Solid Energy

Energy Market

Lignite conversion project

Productivity/transformation

Outline

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Solid EnergyA Diversified Energy Company

Rotowaro Opencast

1.9 mtpa 06/07

Thermal Coal

Customers: Genesis, NZ Steel, Small industrial

Stockton Opencast

2.1 mtpa 06/07

Coking coal

Customers: Export, Holcim Cement

Spring Creek Underground (JV)

0.8 mtpa 07/08

Semi coking / Thermal coal

Customers: Export, Industrial

Huntly East Underground

0.43 mtpa 07/08

Thermal coal (used for steel making)

Customers: NZ Steel, Small industrial

Lyttelton Port of Christchurch Supply Chain Partner

Export 2.0 mtpa 07/08

Switch

Solar, Pellet hardware, integrated energy solutions

Customers: Industrial, Household

Nature’s Flame

20ktpa 07/08

Biomass

Customers: Industrial, Household

CSG

Project development

Newvale Opencast

0.2 mtpa 07/08Lignite coal Customers: Industrial,

Household

Biodiesel New Zealand

1mlpa 07/08

Bio Diesel

Customers: Small commercial

OutlineNZ Energy Market- Over 50% is imported …

Coal, 13%

Wind, 2%

Gas, 18%

Hydro, 57%

Co Gen, 3%Geo, 7%

Quick Facts75% of energy consumption is non-electricity

56% of energy consumed is imported (oil and coal)

25% of energy consumed is renewable

Coal, 7%

Oil, 52%

Gas, 8%

Renewables, 8%

Electricity, 25%

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2,078 Mt

380 Mt

983 Mt

9,392 Mt

2,722 Mt

… NZ has significant indigenous energy resources…

NZ globally significant coal resources

2nd highest resource per capita

15Bt (~200,000PJ) ~50 Maui gas fields

Small middle eastern oil state

80% in Southland and Otago- But lower rank

… including Coal…

Renewable – Hydro, wind, geothermal

Fossil fuel – Natural gas

…Conversion technology needed to bring energy to market…

Solid Energy Lignite Project

Resource access- Reviewed all key lignite

resources

- Selected Mataura/Croydon as the key area of interest

- Secured land and resource primarily through acquisition (1.4 Bt lignite secured)

Resource proving - Drilling exploration

programmes advanced resource knowledge

…concept studies highlighted transport fuels, fertilizer and electricity most prospective…

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Focused on Transport Fuel Production

Feed stock- Up to 15Mtpa of lignite

Plant- Sized to displace imported refined

diesel 30 – 40,000bbl/day (1.5-2BLpa)- 75% Diesel, 25% Naptha( ~50% of NZ

diesel consumption)- High quality product – zero sulphur,

high cetane

Carbon Management- Portfolio approach to carbon

management- Carbon Capture & Storage (CCS)

assessments- Other offsets available

Distribution- Pipe line to Port

Capital - ~NZ$10B capital cost

Carbon Management Planning

Biomass and Municipal waste other renewable feedstock

Renewable power import

Optimise CTL technology and design

CTL plant

Bio-sequestration

Geological Sequestration (CCS)

Global off-sets/credits

Other direct off-set opportunities

Project still a great ‘option’ for New Zealand to progress

Comprehensive investigations ongoing

Next 18 months- Continue exploration on lignite resources

- Complete conversion technology studies

- Further investigate carbon management solutions

- Complete ‘pre-feasibility’ study

Next Steps

Access to skilled people is a development constraint

Solid Energy has experienced issues in current business- Lack of NZ based skills

- Internationally competitive market (Skill shortage)

- NZ learning programmes

Effectively bringing 2 significant projects into the region- Mining (up to 15Mt)

Geologists, hydro-geologist, hydrologists, mining engineers, environmental scientists, mine operators etc.

- Plant operations (30 – 40kbbl/day)Chemical engineers, process engineers, electrical engineers, petroleum engineers,

research scientists, all trades, construction etc

Upskilling for productivity

This is a new industry, not new project

Taranaki petroleum experience

Extensive skills programmes required to support development of this industry- Tailored tertiary programmes

- Post graduate study/research opportunities

- Training and certification of staff and contractors

- Creation of research centres

Note: Limited requirement for upskilling prior to commitment to progressing into feasibility

Upskilling for productivity