Attached files
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| 8-K - FORM 8-K - ADA-ES INC | d8k.htm |
 Creating a Future with
Creating a Future with
Cleaner Coal
Cleaner Coal
Investor Presentation
June 7, 2010
NASDAQ:ADES
Exhibit 99.1 |
 -2-
Please note that this presentation contains forward-looking statements within
the meaning of U.S. securities laws, including statements relating to coal;
future bids, projects, contracts, financing, tax credits, production and
various financial measures; the likelihood, timing and impact of new laws,
regulations and court rulings on our target markets; anticipated sizes of
and growth in our target markets; future supply and demand; the new
activated carbon (“AC”)
facility
ADA
Carbon
Solutions
(“ADA-CS”)
is
building;
ADA-CS’
ability to supply AC;
industry support for our products and programs; ownership of future AC facilities
and litigation. These forward-looking statements involve
significant risks and uncertainties that could cause the actual results to
differ materially from those anticipated, including changes in laws and
regulations, government funding, prices, economic conditions and market demand;
impact of competition and litigation; failure to raise additional financing;
availability, cost of and demand for alternative energy sources and other
technologies; operational difficulties; Clean Coal Solutions’
ability to negotiate acceptable contracts for sale of Refined Coal and
to monetize the tax credits;
availability of skilled personnel; failure to satisfy performance
guaranties; availability of raw materials and equipment; specific risks related to
ADA-CS such as changes in the costs and timing of construction of the AC
facility, failure to satisfy conditions
in
existing
agreements,
actions
of
ADA-CS’
other owners; and other factors
discussed in greater detail in our filings with the SEC, including in our Form
10-K under “Risk Factors." You are cautioned not to place
undue reliance on our forward-looking statements. These statements
are presented as of the date made, and we disclaim any duty to update them
unless required by law to do so. |
 -3-
Clean Coal Technology
Coal is an abundant, cheap, and secure fuel
that provides over 50% of electricity in the US
1,100+ coal-fired boilers in the U.S.
ADA provides the technology to burn it cleaner
Senior staff are industry recognized experts
–
30-year track record of developing and then
commercializing technologies
Positioned to take advantage of public and
political support for Clean Coal technologies |
 -4-
Investment Highlights
Developing solid sorbent capture technology for greenhouse gas CO2
Started work under $3.2 MM DOE and utility funded program
Proposal submitted for $14 MM scale-up funding
Supported by major power generating companies
CO
2
Capture
Emission
Control
Patented technology designed to improve combustion of PRB Coals in Cyclone
boilers while reducing emissions of mercury and NOx
Clean Coal Solutions installed two production facilities in December 2009 capable
of producing over 6 MM tons of Refined Coal per year
Tests completed to qualify for Section 45 IRS tax credit of $6.20/ton for ten
years; before tax cash flow of ~$1 per ton to ADA-ES; monetization also
triggers payments to ADA-ES of up to $4 MM from JV partner,
NexGen Congress considering one year extension to allow placement of
additional units to qualify for the tax credits
Activated Carbon Injection (“ACI”) is deemed maximum achievable control
technology (“MACT”) for the removal of mercury
ADA is a market leader for ACI equipment and engineering services
ADA Carbon Solutions (“ADA-CS”) building new energy-efficient AC
manufacturing facility
in
LA;
DOE
awarded
ADA-CS’
subsidiary,
Red
River
Environmental
Products,
$245 MM conditional loan guarantee to finance the facility.
EPA is developing three new MACT regulations expected to create $1 B market for
AC ADA-CS is permitting for up to 5 additional AC production
plants. ADA has the rights to own up to 50% through equity
contribution in additional capacity Refined Coal |
 GROWTH AREA #1:
Refined Coal Product
ADA-ES’
opportunity
through joint venture with
an affiliate of NexGen
Resources Corporation
-5- |
 Section 45 Refined Coal Tax Credit
Clean Coal’s patented refined coal technology, CyClean, is
designed to enhance combustion of PRB coals in cyclone
boilers
Two systems placed-in-service in December, meeting Section
45 tax credit deadline for
–
$6.20 ton/coal (escalates annually) for ten years
–
Together, facilities are expected to produce greater than 6
MM tons of Refined Coal per year
–
Reduced NO
x
by >20% and Hg by >40%
Monetized revenue expected to produce > $6 MM in
operating income per year for ADA-ES
Except upfront payment of ~$4.5 MM per facility
Monetization will trigger up to $4 MM from NexGen
to
maintain its 50% of JV
Working to obtain extension of the placed-in-service deadline
for another year to expand business further in 2010
–
If extended, an additional 10-20 MM tons could be placed in
service
-6- |
 -7-
GROWTH AREA #2:
Emission Control |
 -8-
AC Market Drivers:
Regulations for Mercury Control
Green
states
with
existing
rules
create
$200
-
300
MM AC market |
 ADA
Commercial ACI Systems > 20 GW ADA Commercial ACI Systems > 20
GW Plant burns PRB coal or lignite
Plant burns bituminous coal
ADA-ES Clients
-9- |
 -10-
Expected Federal Laws
that Will Increase Our Markets
U.S. EPA MACT for Coal-Fired Boilers
–
Will cover all 187 Hazardous Air Pollutants (“HAPs”)
–
Should result in 90% to 95% limit for mercury
–
Final regulations expected November 2011; 3 years to
implement
U.S. EPA Industrial Boiler MACT
–
Will cover larger number of boilers, smaller units
–
Draft
published
April
29
;
to
be
finalized
by
December
2010
U.S. EPA MACT for Cement
–
AC needed for both mercury and volatiles
–
Draft expected this month
U.S. Legislation
–
3-P Bill could be added to Climate bill by Sen. Carper (D-DE)
which includes 90% Hg
Canadian-wide mercury standard has been passed
th |
 Market for ACI
Equipment Expected from a Federal MACT Standard
-11-
0
50
100
150
200
250
300
350
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
State Rules and New
Plants
MACT High Estimate
MACT Low Estimate |
 AC Production Supply /
Demand ADA -CS
-12- |
 ADA-CS New AC Production
Built largest AC plant in the U.S. to
date: 150 MM lbs/yr Plant
designed to be low-cost producer
3-5 year development process: Startup activities commenced in May
2010
Site permitted for 2
nd
production line
Progress on permits for 4 additional
lines in North Dakota -13- |
 -14-
Low-Cost Producer
Plant sited in the middle of lignite reserves
–
Provides access to a long term supply of low-cost feedstock
material
Minimal transportation costs for lignite
Plant design with four furnaces in a single production line
minimizes labor requirements
Modern, state-of-the-art equipment reduces
maintenance costs
Production designed for large volume customers,
minimizes material handling and labor
Energy efficient design with extensive energy recovery
–
Generates 19 MWs, 6 MW for internal use, 13 MWs to be sold
on grid as revenue source |
 GROWTH AREA #3:
Control of Greenhouse Emissions:
Carbon Dioxide
-15- |
 ADA-ES CO
2
Capture Technology
Designed to capture CO
2
from flue gas in conventional coal-
fired boilers
Based
on
regenerable
solid
sorbents
-
advantages
over
competing technologies:
–
For the customer: lower cost and less parasitic energy
–
For ADA: continuous revenues from sale of proprietary
chemical sorbents
$3.2 MM DOE R&D program with extensive industry support
–
Southern Company, Luminant, American Electric Power, Xcel Energy
There has been a significant increase in funding opportunities
for CCS technology through DOE
-16- |
 Next Steps for CCS Technology
Current DOE Program through 2010
–
Field tests using slipstream device
•
Currently testing on Lignite at Luminant
•
Bituminous Coal at Southern Company
•
PRB at Xcel
–
Design of conceptual 500 MW system
Responded in December to a DOE Funding
Opportunity Announcement for scale-up of
solid-sorbent based carbon capture
technology
–
$14MM proposal being evaluated
Opportunities for DOE and industry funding
for full-scale demonstrations are expected in
the future
-17- |
 Lawsuits
-18- |
 Financial
Highlights Balance sheet highlights
(at 3/31/10):
–
Working capital of $2.6 MM
–
Shareholders’
equity of $23.7 MM
–
Cash & equivalents of $2.1 MM
Market cap: $46.0 MM (6/2/10)
-19- |
 A
Leader in Clean Coal Technology ©
Copyright 2010 ADA-ES, Inc. All rights reserved.
NASDAQ:ADES |