1

April 25, 2007

James SpaethU.S. Dept. of Energy

Golden, Colorado

Project Management Center:Project Management Center:Managing the Biofuels Managing the Biofuels

PortfolioPortfolio

Agenda

• Need for Project Management Center • Key Functions• Organizational Approach• RDD&D Management• Implementation of EPAct 2005• Example Projects

2

The President’s State of the Union Address

“Tonight, I ask Congress to join me in pursuing a great

goal. Let us build on the work we've done and reduce

gasoline usage in the United States by 20 percent in the

next 10 years.”

Strengthening America’s Energy Security

Headquarters

Field

Program Implementers

Assistant Secretary

Principal Deputy

Deputy Assistant Secretary for Technology Development

Estimated Laboratory Personnel: 2,400 Staff

Wind &Hydropower

States

Weatherization &IntergovernmentalFEMPIndustry

SNL ANL LBNLLANL INEEL ORNL PNNLPrivateIndustryBNL LLNL

Deputy Assistant Secretary for Business Administration

Biomass DEER Solar FreedomCAR& Vehicles Geothermal Hydrogen,

Fuel Cells Buildings

NREL WFO

OR1

FTE

ID8

FTEs

CH5

FTEsRL

NETL12*

FTEsOAK

HQProcurement NV

GO58

FTEsAL

Board of DirectorsCommunications & Outreach

6 RegionalOffices

117 FTEs

*NETL non-EERE employees working primarily for EERENote: 3,300 actions per year

“Old” Way

3

“A dedicated field implementation capability with the sole purpose of providing common comprehensive management services (project, financial, legal, procurement) for the EERE Programs”

What is the PMC?

“New” Wayu Dedicated EERE Project Management Center

u “One way of doing business”

– Common project management practices employed across EERE

– Number of DOE implementation organizations reduced

u Result:

– Integrated project management; well defined roles/responsibilities

– Better responsiveness; more personnel dedicated “one-way”practice

– Improved timeliness, accountability, and quality

– Appropriate Federal oversight role

– Reduced costs to DOE

– EERE a better partner with stakeholders and customers

4

Roles & Responsibilities

Program Management Project Management

Planning Plans and develops the overall Initiates and oversees theprogram project

Budget Prepares, justifies, and defends Develops and submits the

Formulation the program budget project budget to the Program Manager

Program Executes the program budget Implements the

Implementation and implements the program projects

Program Analysis Analyzes and evaluates the overall Analyzes and evaluates detailed and Evaluation performance of the program performance of the project

Source: EERE SMS Overview

PROGRAM

MANAGER

PROJECT

MANAGER

Program Manager’s % of EffortProject Manager’s % of Effort

100%0%

0%100%

Melding Program Manager and Project Manager Functions

Strategic Planning

Multi-yr Plan, AOP

Budget Request and Defense

Technology Promotion

Opportunity Analysis

Project Selection (SO)Project Continuation

or Renewal

Solicitation Planning

Procurement Requests

Merit Review Chair, Tech Evaluations

Manage cost/schedule/technical progress

Oversight, Reporting, Reviews, Modifications

Facilitating, Collaborating New Ideas

5

Office of the Biomass Program

Operational Organization to meet Functional Needs

Biomass TeamBiomass Team

Feedstock Interface Core

R&D

Feedstock Interface Core

R&D

Sugar PlatformCore R&D

Sugar PlatformCore R&D

ThermochemicalPlatform

Core R&D

ThermochemicalPlatform

Core R&D

ProductsCore R&DProducts

Core R&DIntegrated

BiorefineriesIntegrated

BiorefineriesProgram

ManagementProgram

Management

INEEL ORNL

NREL NREL PNNL

NREL PNNL ANL

NREL

PNNL

Systems Integrator

All

Labs

Headquarters Biomass Team Staff

Project Management Center Biomass Team Staff

Performers of R&D and Program Plans

Private Sector Industry & Academia

PMC for Office of the Biomass Program

Functional Roles

Feedstock Interface Core

R&D

Feedstock Interface Core

R&D

PMC Biomass LeadPMC Biomass Lead

Sugar PlatformCore R&D

Sugar PlatformCore R&D

ThermochemicalPlatform

Core R&D

ThermochemicalPlatform

Core R&D

ProductsCore R&DProducts

Core R&DIntegrated

BiorefineriesIntegrated

BiorefineriesProgram

ManagementProgram

Management

• Solicitation planning• Merit reviews and chairing MR Committees• Technical evaluation and procurement processing• Manage costs, schedule, technical performance• Report reviews & award modifications

• Quarterly reports

• Input to strategic planning

• Annual Operating Plan

• Assist with Outreach & Education

• Partnership Development

• Input to spend plans

Interface and interaction with the National Bioenergy Center and other

DOE facilities and laboratories as needed to perform operations and planning

Office of the Biomass Program

6

Project Managementu Manage project progress against SOW/milestonesu Conduct site visits and project reviewsu Maintain on-going relationship/communications

with Principal Investigator and team membersu Review invoices/reimbursementsu Review and analyze progress reportsu Maintain project financial databaseu Work with Systems Integrator to extract results for

program analysesu Keep HQ Program Manager apprised of progress and

concernsu Close out projectu Ensures projects are conducted within the requirements

and regulations

Project ManagementNegotiation

Announce-ment Selection CloseoutAward

Agreement Agreement (Terms & (Terms &

Conditions)Conditions)

Programmatic Review (HQ)•Source Selection Briefing•Program Policy Factors

Gather Applications(IIPS)

Preliminary Review (PMC)

Merit Review•Evaluation Plan

1. PMC prepares1. PMC prepares2. HQ approves2. HQ approves

Technical Evaluation (Review & Recommendations for Scope and Budget)

Gather Missing or Required Info.

Required Forms & Certifications1. Company Info.2. No Discriminating3. No Lobbying4. NEPA - Environmental

Impact (FONSI)5. U.S. Benefits (EPAct)

1. Forms1. Forms2. Deliverables2. Deliverables3. Square Up3. Square Up4. Box & Archive4. Box & Archive

or Deor De --BarBar

Periodic Reporting

Final Technical Report (Public)

Amendments1. Revisions2. Incremental Funding3. No-Cost Extensions4. Deobligations5. Administrative

Payment (Invoicing or Auto Withdrawal)

Selection OfficialSelection Official Contracting OfficerContracting Officer

Project Timeline

Pre-Selection

7

Collaborative Research, Development, and Demonstration

Fundamental and Applied R&D

Ø Feedstocks: integration of feedstocks with conversion processes

Ø Conversion Technologies: biochemical and thermochemical

Ø Integrated Biorefineries: systems integration,demonstrations, infrastructure development

Integrated Biorefineries

Ø Systems Integration: feedstocks, conversion, biopower, infrastructure

Ø Demonstration: pilot scale, commercial scale

DOE efforts are paving the way for a strong, domestic bioenergy industry—with commercial success possible in the next six years

DOE efforts are paving the way for a strong, domestic bioenergy industry—with commercial success possible in the next six years

The Energy Policy Act of 2005Accelerates Market Penetration Of Biofuels

• Section 932: Commercial Integrated Biorefinery– 6 Projects selected: DOE value – up to $385 million

• Total project value – over $1.2 billion

– $72 million in FY 2007 budget request

• Section 941: Revisions to Biomass R&D Act of 2000– Vision document released November 2006; updated Roadmap due May 2007

• Section 942: Cellulosic Ethanol Reverse Auction

– Request For Information and Options papers completed

• Sections 1510, 1511, and Title XVII: Loan Guarantees– DOE issued guidelines under Title XVII in August 2006

Energy Policy Act of 2005 goals are integrated into core technology platform priorities

Energy Policy Act of 2005 goals are integrated into core technology platform priorities

8

Delays in

attainm

ent o

f perform

ance criteria

CommercialViability

TechnicalViability

Concept Proof

CommercialSustainability

Technology Development(Bench Scale)

Commercially Viable Demo

(Demonstration Scale Plant)

PermittingEngineeringConstruction

Operation

Proof of Concept

(Pilot Scale)

80% / 20% 50% / 50% 20% / 80%Loan Guarantee

and/or Risk Mitigation

100% / 0%

CoreResearch

AndDevelopment

ConceptDevelopment

PlatformR&D

CRADA’S & Projects

2008Solicitation

BiorefinerySolicitation

ProductsSolicitation

Independent Commercial Developments

Stage Gate – Project Management

Deployment – Barriers

BasicR&D

Technology Development

Commercially Viable Demo

Permitting &Engineering

Proof of Concept Construction Operation

Co

mm

issi

on

ing

First Commercial Plant Mec

han

ical

co

mp

letio

n

Att

ain

men

t of p

erfo

rman

ce c

rite

ria

Del

ays

in a

ttai

nm

ent o

f pe

rfor

man

ce c

rite

ria

Operation

80% / 20% 50% / 50% 20% / 80% Loan Guarantee Program/Risk Mitigation Pool

Secure First PlantFinancing

Dev

elo

pm

ent C

ost

s

100% / 0%

Secure DemoFinancing

Procurement

Private Cost-Share:OBP Cost-Share:Project Timeline:

Development Stages:Unexpected Cost:

Risk Mitigation:

9

Range Fuels

Alico

BlueFire

Broin

Iogen

Abengoa

Design, Engineeering, and PermittingConstructionStart-Up, Commissioning, and Operation

Q 1 Q 2 Q 3 Q 4 Q 1 Q 3 Q 4 Q 1Q 2Q 1Q 2 Q 3 Q 4

FY 08 FY 09 FY 10Q 2 Q 3 Q 4 Q 1 Q 2

FY 11 FY 12

EPAct 932 Anticipated Project Timelines

DOE Conducted Permitting ReviewDOE Conducted Stage Gate on Pilot Plant

Additional Slides

10

Cellulosic Biorefinery Solicitation

EPAct Section 932(d)

• Design, build, construct and operate a commercial-scale integrated cellulosic biorefinery– 40% Federal cost share of project

– 6 projects selected

– $72 million planned for FY 07• $385 million in total

Demonstration Scale Solicitation– Release is TBD

Loan Guarantees for the construction of cellulosic biorefineries– §1510, §1511, Title 17

Common Characteristic of Loan Guarantees– Project must be able to produce revenues to meet

debt service– Must be innovative & commercially viable– Guarantees debt no greater than 80% of project costs– Applicant must pay DOE guarantee fee to cover

administrative costs– DOE must provide a default fund from its

appropriations for each project

Biofuels Loan Guarantees under EPAct

11

Collaborative R&D is producing results in both biofuels and bioproducts

• Substantial increases in yield of ethanol per ton of feedstock over last five years

• Development of enzymes with best-in-class performance in conversion of sugars from corn grain and stover to ethanol

• Development of high-value adhesives, plastics, foams, and coatings from oil crops and grain sugars

Cell phone casings made from bio-based polymers developed through DOE-industry cost-shared R&D

Using biomass for both biofuels and high-value bioproducts will enable more cost-effective operation of integrated biorefineries.

Using biomass for both biofuels and high-value bioproducts will enable more cost-effective operation of integrated biorefineries.

Achievements

GO13146: Integrated Corn-Based Bio-Refinery (ICBR)

Project Description Objectives, Drivers & Impacts

• 9/30/2003 – 12/31/2007

• Total DOE Budget: $18,185,238

• Total Cost-Share: $18,997,832

• Obligations to Date: $15,834,674

• Plans for FY07 Obligations: $2,300,000

• Partners: NREL, Diversa Corp., Deere & Company, and Michigan State University

• The ICBR process will bring new technology to the conversion of corn and stover into fermentable sugars for parallel production of added value chemicals such as 1,3 propanediol and fuel ethanol.

• Demonstrate 95% and 90% yields on glucose and xylose, respectively, and 80 g/L titer in the presence of 8 g/L acetate.

Results

• Discovery of a mutant that allows for co-fermentation of glucose and xylose rather than sequential fermentation

• Major systems test run at NREL pre-pilot/pilot scale – spring 2007

Loudin, TN - PDO Facility

DuPont

12

PMC Biomass Database• Retains current and historic project information including:

• Contact information, project identifiers (CPS, CID), WBS

• Financial information including

• Data from STARS financial system (non-lab only)

• Data from Quarterly Financial plans (all projects)

• Annual OBP spend plans

• Allows GO the ability to answer HQ data calls quickly and accurately.

• Produces monthly uncosted reports and monthly STARS accruals.

20 in 10 Summary

• Increase supply of renewable and alternative fuels– Set Alternative Fuels Standards (AFS) at 35 billion

gallons per year by 2017• 5X the current Renewable Fuels Standard for 2012

•15% of projected annual gasoline use in 2017

• Increase vehicle efficiency– Reform and modernize CAFÉ

•5% of projected annual gasoline use in 2017