What is Green Power?

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Green power is “environmentally differentiated” electricity product from:

• Solar • Wind • Geothermal

• Biomass • Biogas • Small Hydro

Source: EPA Green Power Partnership

Logistics – DNR Partnership

NPI USA is partnered with Washington State DNR for beneficial usage of Forest Biomass including State Funding of $2MM

Logistics: Forest Biomass Supply(NPI USA was selected as DNR biomass initiative partner)

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NPI Mill

PortTownsendMill

SheltonProjects

GraysHarborMill

NPI Forest Biomass Basket

Fuel from sawmills and forest slash from Private Timberlands and DNR

In Forest Reclamation:

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Land Awaiting Recovery

Processing & Grinding

Collection & Transportation Dumping @ Mill

Timeline

The NPI Project has an aggressive schedule for engineering, construction and start up.

•Initial Project Scope Defined - December 2009 •Project Approved by NPI Japan Board of Directors - August 2010•Environmental Permits – 2nd Quarter of 2011•ISIS & BPA Review – 4th Quarter of 2010•Equipment Engineering – 3rd & 4th Quarter of 2010•Site and Foundation Engineering – 1st Quarter of 2011•Equipment Ordered – 3rd & 4th Quarter of 2010•Visible Construction (On Site) Start – 2nd Quarter 2011•Equipment Testing & Check Out – 3rd & 4th Quarter 2012•Boiler On Line - 1st Quarter 2013•Turbine & Generator On Line – 1st or 2nd Quarter 2013

Project Description

The NPI Cogeneration Project includes replacement of the existing boiler with a new boiler and infrastructure including:

•Boiler• 225,000 lb per hour of steam at 900 psig and 945° F• Membrane Wall with Vibrating Grate Configuration• Suspension firing boiler – Detroit Stoker• 100% Biomass Fuel• Ultralow Sulfur Diesel Fuel for Start Up• Environmental Controls designed to meet EPA 2013 MACT Regulations

•Steam Turbine & Generator – 20 MW Condensing Turbine•Biomass Fuel System – Dumpers, Storage, Screening and Conveying •Electrical Substation, Switchgear and Metering•Digital Process Control System•Boiler Feed Water System

Conceptual Sketch

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New Boiler & Turbine

Fuel Delivery& Storage

Old Boiler To be Retired

Environmental Permits

Air Permit City Permits WA Dept Energy (Started Dec 2009) (Started Mar 2010)

July 2010 Application EIS Shoreline NEPA(for grant)

1st Revision

Sep 2010 2nd Revision Appealed Nov 2010 Withdrawn3rd Revision Appealed to SHB

Jan 20114th Revision

Feb 2011Preliminary Determination April 7 Hearing EA

DismissedDraft Permit 4/17/11 30 days to appeal Public Comment

June 630 day Public Comment

30 Days to complete (mid June)

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Construct

Construction allowed even if appealed to PCB.

Construction allowed Monitoring Discovery Plan

City Of PA Planning Commission(Approved Sept 10

City Of PADec 27Appeal denied

Using Every BTU Available:(Why Combining Heat with Power is Better)

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How you make electricity and the availability of beneficial use for steam & hot water makes a huge difference in the Thermal Efficiency of the plant. Due to Paper Mill usage of Steam and Hot Water the NPI project has excellent Thermal Efficiencies. (EPA LHV Method)

TECHNOLOGY EFFICIENCY

Conventional Coal or Oil Electrical Generation Plant

32-34%

Conventional Biomass Co-Gen Plant(without beneficial usage of Steam – No Heat Sink)

32-36%

Combined Heat & Power Plant(with beneficial usage of Steam – Paper Mill)

50-60%

Combined Heat & Power Plant (with steam usage & enhanced heat recovery for hot water) Nippon Paper Process @ Port Angeles

69%

Slashing Emissions:

Replacing our 1950’s boiler with a new boiler built for low emissions and equipped with MACT Control Technology will allow NPI to dramatically reduce most emissions in spite of increased fuel loads.

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Pollutant Control Device Change

Particulate Matter

Extended Combustion Zone Electrostatic PrecipitatorCondensing EconomizerDust Collectors

Decreases 68%

Acid Gases Condensing Economizer Decreases 99%

Carbon MonoxideCombustion ControlsExtended Combustion Zone

Decreases 12%

Sulfur Dioxide Elimination of Oil Fuel Decreases 86%

Nitrogen Oxide Urea Injection (SNCR)Increases 21%

(More Fuel Load)

Environmental - Particulate

Department of Ecology 2005 Emissions Inventory Summary

Department of Ecology 2005 Emissions Inventory Summary2.5 Micron Particulate Matter

Reliability of Supply

Reliability of Supply

• NPI owns Electrical Power Lines & Switch Gear from Mill to BPA Substation.

• Ownership of these assets reduces project complexity, cost and permitting processes.

Economic Benefits

• Direct and indirect Economic Benefits for Port Angeles and Clallam County (11.6% unemployment March 2011) including:

• Direct Benefits:

• New Jobs – More than 20 generated in forest harvesting• Retained Jobs – more than 200 at mill alone• Construction & Trades Jobs – 40-100 over 18 month period• Property & Sales Taxes – same or increases• Electricity & Utility Fees – same or increases• Charitable Contributions & Community Support by Nippon

• Indirect Benefits:• Support & Preservation of Indirect Jobs – Area Suppliers & Businesses • Community Stability• Demonstrates collaboration of DNR pilot biomass initiative

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Reliability of Supply

• Biomass is more reliable choice for supply than Solar or Wind Power.

• NPI Co-Gen plant will run 24 hours per day, 355 days per year

• Wind Power supply tends to be inverse of usage and demand curves.

• Charts are real data from the California ISO Web Site on September 16th.

• Top Chart – Predicted and Total Demand for ISO Balanced Area in Mega Watts

• Chart to Right – Supply of wind power in Mega Watts.

BPA Balancing with Wind(Not Reliable Power)

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What’s Next

• Discussions on Contracts between NPI and Local Utilities– NPI USA looking to market 20 MW bundled power (includes REC)– Memorandum of Understanding signed between City of PA and NPI USA– Similar MOU’s signed with other Utilities– City of PA interest in 1+ MW bundled power (includes REC)– UFT required to transmit power to City of PA (almost zero transmission costs)– BPA System Impact Study almost complete (LGIP)– NPI USA investigating other sales options with transmission capability– Buy from us!