Introducing a framework to estimate and classify Renewable

Energy Resources

Jan Koninckx, PhDGlobal Business Director - Biorefineries, DuPont

Total Energy USAHouston, TX November 21, 2013

Presentation objectives

• Introduce an ongoing initiative to develop a framework for estimating and classifying Renewable Energy resources

• Explain how the definitions and principles of the United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources 2009 (UNFC-2009) can also be applied to Renewables

• Solicit feedback and comments from Renewable Energy stakeholders

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Background

• The UN Economic Commission for Europe’s called upon the Expert Group on Resource Classification (EGRC) to “develop ideas on how the UNFC could apply to and integrate renewable energy by December 2013”

• Separately, an industry-led working group took the initiative to develop a transparent and consistent estimation and classification methodology for renewable energy resources

• The working group reported their findings at the fourth session of the EGRC held in Geneva, April 2013

• The EGRC established a Task Force on the Application of UNFC-2009 to Renewable Energy Resources

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What is the UNFC?

• United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources (UNFC)

• Global, generic, principles-based “umbrella” system

– Solid minerals and fluids– Numerical coding system– Facilitates global communications

• Compatible, integral, and collaborative (CRIRSCO Template for minerals & PRMS for oil & gas)

• Other systems and primary fuels could align with UNFC in the future

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UNFC – How it worksE a

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F axis categories G axis

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UNFC – How it works

Category Definition

E1 Extraction and sale has been confirmed to be economically viable.

Category Definition

F1 Feasibility of extraction by a defined development project or mining operation has been confirmed.

Category Definition

G1 Quantities associated with a known deposit that can be estimated with a high level of confidence.

UNFC Class: 111

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Resources are estimated and classified based on a “project”

The project generally represents represent the level at which a decision is made whether or not to proceed (i.e., spend more money)

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Renewable energy projects are similar to fossil energy or mineral projects

Some differences:

• The energy source does not deplete

• Geological risks do not apply to most Renewable energy projects, but similar uncertainties exist (e.g. meteorological variations, seasonal variations etc)

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Oil field vs. wind farm (example)

Common project characteristics:

•A defined level of investment, with an expected production profile

•Prerequisites such as gaining access to the resource and market, receiving authorisation, and validation of the economic case

•As the project develops, risk declines and certainty of returns improves

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Click to edit Master title styleA Renewable Fuel Example

November 2013 – Total Energy Houston Copyright © 2013 DuPont. All rights reserved.

Liquid FuelLiquid Fuel

Solid FuelSolid FuelStorageStorage

Considerations•Contracts with Farmers•Farmer Operations History and Productivity Trends•Weather Uncertainty

Sustained Carbon SourceProcessing Losses Marketable Energy

Products

Common project characteristics:

•A defined level of investment, with an expected production profile

•Prerequisites such as gaining access to the resource and market, receiving authorisation, and validation of the economic case

•As the project develops, risk declines and certainty of returns improves

Task Force

The EGRC established a small Task Force in 2013, with representatives from:

• Public sector (Australia)• Private sector (Bioenergy)• Private sector (Bioenergy; International Oil & Gas)• Academia (Geothermal)• Private sector (Bioenergy; Wind; International Oil & Gas)• Private sector (Bioenergy; Solar; International Oil & Gas)• Private sector (Finance & Reporting)

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Task Force mandate

It is envisaged that this will consist of an overarching Renewable Specification document, together with commodity-specific specifications and a conversion document that will outline the conversion principles across energy metrics to support a consistent comparison and reporting of various energy resources.

Near-term deliverables:•Draft specifications for the application of the UNFC-2009 to Renewable Energy•Workshop in March 2014 to consult with a broad group of global stakeholders•Submission of the draft specifications to the EGRC for approval in April 2014•Public consultation, following EGRC approval

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1

3

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To develop a set of specifications for the application of the UNFC-2009 to Renewables.

The UNFC as umbrella framework for all Energy & Mineral Resources

• A consistent methodology across all Energy & Mineral resources creates transparency and comparability

• The UNFC-2009 is and remains a voluntary system , intended as framework, or a set of common rules, that can be adopted and used by different stakeholders

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Task Force Scope

Key stakeholder groups

Stakeholder Driver / Interests Governments Better understand total resource base

Energy Security Facilitate achievement of integrated energy strategy and policies

Global Organisations Assess and contrast global energy systems and different energy sources

Renewable Energy Sector Participants

Enhanced overview of asset values Provide a measure of comparability with traditional energy systems Offer a basis to estimate the scale of each renewable resource Provide reliable estimates based on best practices and common standards

Investment community Better assess and contrast investment opportunities

Enhance portfolio valuation

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Any feedback or questions?

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