Company name (XXXX)

Dear Sir,

FEASIBILITY STUDY INTO A GISBORNE FACILITY TO CONVERT WASTE INTO ENERGY

GER is pleased to provide North Sustainability Group (NSG) with this proposal for the provision of
feasibility study into a Gisborne facility to convert waste into energy.

We understand from the brief provided by NSC that the ultimate environmental goal for the energy from
waste (EfW) facility is to achieve zero net emissions and potentially obtain carbon credits to benefit from
carbon market. With this in mind we have pitched our offer to include a broad range of solutions in order
to achieve this. Should the scope or cost of our proposal not align with NSC’s expectations we would
be open to undertake a more focused approach with a reduced cost and a de-scoping of the deliverables
to better align with NSC’s budget.

An alternative solution may also be for GER to align with any NSC’s preferred equipment or technology
suppliers as part of the feasibility study. The following proposal aligns generally with the requested
methodology and deliverable required by NSC.

GER will be pleased to assist with guidance regarding any additional funding – specific industry findings
for greenhouse gas emission reduction, energy saving, wastewater treatment management, or
Sustainability Funding, which can be available at a later stage of the proposed project for physical
infrastructure (equipment).

1.0 PROJECT DESCRIPTION

NSG and its funding partners seek a competent technical partner to assist them to develop a business
case to commit investment and hence attract financial capital required to build an integrated waste to
energy facility in Gisborne, Victoria. NSC’s membership have a vision to move to zero net emissions
within ten years, and through community activities are seeking to extend this vision across the wider
community.

Based on the past study, undertaken by NSC (September 2015), it was estimated that for every 100kWe
of renewable energy generation, 850 tonnes of greenhouse gas is avoided per year (National
Greenhouse Accounting Factors: Vic ave. 1.18kg/kWh). Hence for the two major project options (bio-
digester ~ 500kWe and landfill gas ~ 100kWe) a total of 5,095 tonnes of CO2e emissions could be
avoided per year. In addition, the sludge treatment via new bio-digester facility could reduce CO2e
emission from the wastewater treatment plant and generate some renewable energy.

The “Gisborne’s waste to energy precinct Pre-feasibility Study”, dated September 2016, was completed
to identify and map waste streams, assess current energy use profiles, and propose opportunities in
terms of renewable energy production from waste and long term economic and environmental benefits
to the local community.

1
2.0 ENERGY FROM WASTE SUITABLE OPTIONS

Because different waste has very different calorific value and degradation capacity for efficient waste
management and renewable energy generation often integration of two or three processes is the best
option. GER suggests a combination of biological (anaerobic digestion (AD)) and thermal (pyrolysis)
processes. Both technologies are based on proven energy from waste (EfW) processes and already
operate World Wide. These technologies can be well integrated on site, Figure 1, attachment A1. Plants
can be smaller and less intrusive, so better suited to smaller towns. Alternatively, AD can be utilised as
the first stage of EfW and pyrolysis technology can be added at the late stage for better waste site
management and if landfill remediation is required as the currently proposed by the State Government.

Table 1, attached in A1, summarises various current and potential future waste streams and applicable
EfW technologies as well as emission associated with the processing of such waste under the State
Environmental Protection Policy (Air Quality Management) 2001 (SEPP AQM). Biogas produced by
anaerobic digestion, syngas produced by pyrolysis process and the gas collected from the existing
landfill are directed to a Combined Heat and Power (CHP) unit for generation of high quality energy,
Figure 1, attachment A1.

As can be seen from the Table 1 and Figure 1 energy can be recovered from food waste, manure,
organic municipal waste, sewage sludge and some biodegradable fraction of householder waste using
AD or biogas technologies. In addition, some organic waste from municipal, and commercial wastes,
which are currently disposed to the landfill can be separated, pre-treated and re-directed to anaerobic
digestion facility and/or to pyrolysis. The methods of conversion fall into two broad categories –
microbial and physical chemical decompositions. AD is slow process, but effective in term of energy
consumption and biogas production. AD is a natural biological decomposition process that occurs in
oxygen-free conditions. It involves the conversion of organic matter by microorganisms to generate a
gaseous product, known as “biogas,” leaving a stabilized solid product, known as “digestate.” AD has
been used for over 100 years in sewage treatment to stabilize waste sludges and more recently to treat
selected farm and industrial wastes. Key of effective operation of AD is to ensure during the
commissioning phase that bacteria is well matured and can easily replicate itself during biological
processes. The European Biogas Commissioner stated that “in addition to the current output in
renewable energy and the apparent and obvious link to the GHG emission abatement by replacing
fossil fuels, there are surplus reductions in GHG emissions which make anaerobic digestion unique as
a renewable energy technology. AD therefore brings by far the best reduction in CO2eq per unit of
energy produced”. The pyrolysis process, which can convert all organic matter and some non-organic
matter, including paper, wood, synthetic polymers yields more energy but the net yield is reduced by
the energy consumed in the process and emission.

Renewable energy can be generated from combustion of bio-gas with the conversion of readily
available waste streams to energy. Nevertheless, the energy from waste (EfW) technology must
demonstrate that the proposal targets genuine energy recovery. As most EfW technologies produce a
fuel or gas instead energy, the overall environmental benefits will depend not only on the treatment step
but also on the energy conversion technology (combustion) to which it is coupled and how much of the
produced energy is used to run the overall process. Only EfW technologies which demonstrate high

2
quality energy generation over Life Cycle (Life Cycle Analysis) of the plant contribute to a reduction of
Greenhouse Gas Emission (GHG) have potential to generate additional revenue stream from carbon
market. There are a number of opportunities for industry to participate in the Emission Reduction Fund
by reducing emission, improving energy efficiency, avoiding of emissions of methane and nitrous oxide.

For dedicated EfW plants, the project should demonstrate the thermal efficiency of the proposed
technology using the R1 Efficiency Indicator (EPA Vic, Publication 1559) as defined in the European
Union’s Waste Framework Directive 2008/98/EC (WID). For a plant to be considered a genuine energy
recovery facility, R1 will be expected equal or above 0.65. If R1 is below 0.65, the project will need to
justify why this value cannot be reached. EPA Victoria works with industry that anticipate the array of
new technologies likely to enter the Victorian market, and EPA provides regulatory certainly by
continually updating guidance notes that set out regulatory requirements for new EfW technology.

Proponents of EfWs proposals will be expected to demonstrate that the location, layout, design,
construction and operation of EfW facilities will incorporate best practice measures for the protection of
the land, water, air environments as well as energy efficiency and greenhouse gas emissions
management. In this respect it is advisable to complete environmental impact assessment (EIA) (at
least at a conceptual level) at early stage. A well prepared business case supported by an EIA and/or
an Environmental Management Plan (EMP), will certainly gain more attention from of potential
investors.

As part of this proposed work, GER has developed the detailed project methodology, and the scoped
detailed services required to deliver this feasibility study.

3.0 SCOPE OF SERVICES

GER recommends that the feasibility study be completed in a number of stages, as outlined below.

3.1 Stage I: Project Initiation

The purpose of this initial stage is to meet with all stakeholders in GER and learn about the project site,
visit surrounding areas, industries, Shire Council to better understand the current environmental
management practice, waste management.

This meeting is an opportunity for all parties to establish a right communication strategy (reporting,
presentation, discussions required to communicate the project data) to enable to carry out the project
over the next 5 – 6 month period within the timeframe and budget. This stage also includes:

• Project Mobilisation
• Information Gathering
• Analysis and review of the available data.

3
It is expected that one all day meeting at Gisborne and gathering additional information from various
parties, industries in Gisborne by a GER’s project manager will be sufficient to obtain all necessary
information. We promise that two weeks must be sufficient to complete this stage and move to the
concept design stage.

A project Steering Committee is welcome to visit GER at Geelong, Victoria to monitor a process of the
concept design stage, learn about the technologies, expected capital and operation costs of the new
facilities, and a required environmental management, practice.

3.2 Stage II: Concept Design

The scope of work for stage II is to develop a concept report and supporting drawings, and
documentation, which provides sufficient details to assess environmental, social and economic risks
and to develop a commercial business case. The report will include an estimated abatement of
greenhouse gas (GHG) emissions as a result of the project.

To ensure overall efficiency of the combined processes, mass and energy balances will be calculated
of each of the different processing conditions for each by-product. In addition to a techno-economic
study, a broader assessment from science and technology perspectives (through a literature survey,
interviews and workshops) will provide a deeper understanding of stakeholder perceptions about
potential synergies between AD and pyrolysis.

The conceptual design stage includes:

• Site visit by GER staff to inspect the existing facility, obtain the relevant technical drawings,
specifications, report, take photos of surroundings;

• Literature review and options assessment (based on sustainability criteria, waste streams,
specific biological processes required to effectively convert various organic and non-organic
waste into biogas, similar plants operating in Australia and overseas);

• Develop mass and energy balances for sizing a selected waste to energy technology
(anaerobic digester);

• Process Flow Diagrams (PFD);

• Site layout plan of new biogas generation (anaerobic digester) facility including civil works;

• Site layout plan of biogas to energy facility, assess potential integration and/or upgrade required
to achieve effective energy generation from a number of sources on site such as anaerobic
digester(s), landfill, and the wastewater treatment plant;

• Develop a list of major process, electrical and mechanical equipment and other new
infrastructure to estimate capital cost (CAPEX);

• Review and confirm operation and maintain cost (OPEX);

• Prepare a functional specification (conceptual level) - operating philosophy of the proposed

facility;

4
 • General advice on waste to energy plants and conformance of requirements for EPA’s licence
compliance, to meet relevant Australian Standards;

The conceptual design of the facility will be sufficient to obtain regulatory approvals, to prepare tender
documentations for construction of the facility and secure investment.

The key deliverable includes:

• Concept report

• Functional Specification

• Expression of interest document for EPC contractor (high level structure only).

The drawings include:

• Process flow diagram (PFD)

• Process equipment site layout

• Electrical diagram

• Visual impact 3D diagram site drawing including vegetation plan.

3.3 Stage III: Legislation Environment, Environmental and Social Impacts Assessment.

The scope of this second stage is to review current Australian and International Legislation, Regulations
and relevant Policy to mitigate various risks, uncertainties (environmental, economic, social, and
political) to enable NSC to effectively invest into the growing environmental market economy. The
specific tasks of this work include:

• Identify all relevant Victorian, National and International Legislation, Regulations and
Government Policy, consolidate relevant information from Clean Energy Act 2011 • National
Greenhouse and Energy Reporting Act 2007 • Renewable Energy (Electricity) Act 2000 •
Carbon Credits (Carbon Farming Initiative) Act 2011 • Australian National Registry of Emissions
Units Act 2011, and • associated regulations;

• Life Cycle Analysis (LCA) of the new facility considering ten and twenty years operation cycle
in terms of high quality energy production, environmental benefits, GHG reduction;

• Risk Management Plan, which will identify potential and perceived risks (technical, commercial,
regulatory, environmental, social) to mitigate and manage risks as well as identify positive
additional opportunities;

• Regulatory requirements including Shire Council works approvals, EPA planning and work
approvals, Essential Services Commission, PowerCor, AQIS and cost and timeframe of
approval;

5
 • Develop a Communication Strategy to manage the project from design to commissioning and
validation phases.

This stage of study will deliver:

• Environmental Management Plan(EMP) or Environmental Impact Assessment (conceptual

level) report

• Plan for Planning and Works Approval

• Life Cycle Analysis (LCA) report.

• Risk Management (RM) report.

3.4 Stage IV: Business Case

The main objective of this stage is to develop a financially attractive business case, to help decision-
makers insure that the project has value and relative priority based on the current market conditions,
selected technology and identified risks. The sustainability criteria (technical issues, regulatory barriers,
environmental, commercial considerations, community support, and communication strategy)
developed in the stage II will support the business case. The business case report will outline:

• Introduction – Summary of results, business drivers, benefits to be delivered;

• Project overview – potential for improving Australia’s position in the international carbon market,
Regional Greenhouse Gas initiative (RGGI);

• Strategic options analysis, cost and revenue estimates will be presented to satisfy Level Two
of Auditing (Australian Standards) (investors and banks will be satisfied), cost benefit analysis,
assumptions, cash flow statement (NPV), sensitivity analysis;

• Project options analysis such as stakeholder consultation, social, environmental, economic

impacts, overall evaluation of social-economic and environmental impacts (positive and
negative);

• Community impacts such as employment opportunities within the new facility, education of
community in respect new emerging environmental technology, improving environmental
management practice.

• Integrated Analysis, Risk Assessment and Risk Management, opportunity costs.

• Conclusion, recommendation and next steps forward including “Sign-off checklist”.

6
The business case report will be comprehensive, which includes factors relevant to evaluation by the
financial institutions, and accountable for the delivery of benefits.

The key deliverable is a business case report.

3.5 Stage V: Site visit of the existing facilities (Optional, not costed)

GER is pleased to offer to arrange a site visit to inspect similar facilities which have been in operation
for the last five (5) years in Europe. These include:

• Uppsala, Sweden, Anaerobic Digestion Plant operating from 2010 (attachment A4);

• Vienna, Austria, Anaerobic Digestion Plant operating from 2011 (attachment A4);

• Miskolc, Hungary, Anaerobic Digestion Plant operating from 2015 (attachment A4).

4.0 ASSUMPTIONS AND LIMITATIONS OF THIS WORK

4.1 Assumptions

GER assumes that the information from the relevant organisations involved in the respective waste
streams will be provided by NSC. These included the information from the council (landfill site), local
water authority (wastewater treatment plant) and local industries (generators of waste). In addition, high
energy users from local industries will be identified and relevant agreements will be in place to supply
the renewable energy from the new EfW facility.

4.2 Limitations

Our offer does not include the following:

• Terms or agreement sheets for each relevant supply/demand contract (land rental, PPA, waste
disposal agreement, waste intake agreement, gate fee agreements with each major user) that
the investor company will need to enter into, with content (including prices, duration, volumes,
conditions, ect.) consistent with assumptions in the business case.

• Draft prospectus to standard that meets regulatory requirements and allows seeking of
investment;

• Financial options and supporting analysis statement.

The reports and business case produced, under this commercial offer, will be sufficient to present to
financial bodies for investment considerations. However, the documentations will be not sufficient to
construct the facility.

7
5.0 PROGRAM

The proposed GER staff are available to commence work immediately. We would make all efforts to
assist NSC to obtain Sustainability Funding if the project proceeds to construction stage. In addition,
GER can assist with Greenhouse Gas Emission Auditing and Reporting when it requires.

6.0 COMMERCIAL

6.1 Cost of proposal study

The cost (Lump Sum) of each stage of the study is summarised in the below table.

Project stages Hours Total cost (excl

GST)

Stage I 88 $13,040

- Mobilisation, Information Gathering, Presentations 88 $13,040

Stage II 250 $36,800

- Process modelling, Concept design and Report 188 $27,720

- Functional Specification 23 $3,360

- Expression of Interest document for EPC contractor (high 15 $2,200

level)

- Drawings 24 $3,520

Stage III 155 $22,960 incl

- EIA report (Conceptual), Approval Plan 68 $10,080

- Life Cycle Analysis (LCA) report 45 $6,720

- Risk Management (RM) report 42 $6,160

Stage IV 135 $19,880 incl

- Business Case report 135 $19,880

Total cost 628 $92,680

Additional costs as outlined below 114 $16,000

Grand total cost $108,680

To enable NCS to control the progress of this study and costs of various stages of works, GER propose
one holding point between each of the stages to be able to develop a financially attractive business
case while communicating key of the conceptual study and risk management outcomes to Steering
Committee.

8
6.2 Commercial terms and conditions

The commercial terms and conditions are proposed to be GER’s Professional Services, General
Conditions of Contract. Acceptance of this Proposal constitutes the entire agreement between the
parties and is limited to the terms of this Proposal and the GER General Conditions of Contract, and
any additional or different terms or conditions, whether express or implied (including any which may be
contained in a Company-issued Purchase Order), shall not become a part of the agreement unless
GER consents in writing.

The offer submitted is open for acceptance for one month from the date of issue.

6.3 PERSONNEL

We propose the following staff for the services:

Personnel Name Hourly Rate ($)

Engineering Manager 190

Senior Chemical Engineer 140

Sustainability Specialist 190

Sustainability Consultant (advisor) 190

Senior Project Manager 165

Lead Mechanical Engineer 150

Senior Electrical Engineer 140

Senior Economist & Estimator 140

Senior Drafter 115

Manila (low cost) Drafter 50

Copies of resumes for key staff have been attached to this proposal in Attachment A3. Support of
additional specialist staff will be provided as required.

9
7.0 ACCEPTANCE OF PROPOSAL

Shall our proposal be successful GER will be willing to provide support for the full delivery of project
including detailed design, procurement, construction, project management, and commissioning. Post-
commissioning technical and environmental performance of the plant, validation and operation data
monitoring can be also performed should you require this assistance. GER has the ability to deliver the
project either as an engineer/project manager in an EPCM role, or as a design and construct contractor
(EPC). We welcome further discussion of the implementation strategy with NSC.

We trust the above meets with your requirements and can lead to a successful waste to energy project.
Should you require further information or clarification please contact Mr John Smith or Dr Carl Midland.
We look forward to assist you with investment into rapidly growing environmental market and look
forward assisting you further on this project.

Yours faithfully

DR CARL MIDLAND
SUSTAINABILITY SPECIALIST

10