Waste to Energy

1 Waste to EnergyWaste to Energy1 Waste to EnergyPOSCO ENERGYN ecessity and Expected effectsof Waste to Energy BusinessVarious Waste to Energy Businessat POSCO ENERGYO verviewNo Waste should be wasted any more. Waste is a valuable source of energyPOSCO Energy is reducing GHG(Greenhouse Gas) emissions by converting Waste and sewage heat into Energy sources to replace fossil Energy . We believes that saving the earth is no different from its mission, Make a brighter world by providing cleaner Energy POSCO Energy makes contribution to low carbon green growth by promotingRDF(Refuse Derived Fuel) project and Business using sewage Treatment & Power Generation FacilityEnergy Global warming Species loss The Environment Energy supply-demand imbalance Competition over Energy procurement The Economy The increase of natural disasters Increase in environmental refugees Crisis of humanityExpected effectsBusiness Using Sewage Heat for District Heating Securing of eco-friendly Energy sources (RDF, Sewage heat, etc.)

2 Reduction of GHG emissions Substitution for LNG and crude oilWaste to energyMunicipal WasteDischarged effluentMBTS ewage Heat RecoveryEnergy facilityDistrict Heating SubstationKorea Power ExchangeCustomers23 POSCO ENERGYW aste to EnergyWaste Treatment & Power Generation FacilityRDF(Refuse Derived Fuel)Creating Energy and Reducing Environment Pollutionmunicipal Waste used to be incinerated or buried. POSCO Energy separates and selected only the inflammable Waste and use it as fuel to produce electricity at designed boilers. The heat generated through this process is supplied to district heating substations and various industrial Energy is also promoting the joint R&D activities with specialized research institutes and expanding the relevant businesses at home and Process of RDF Preparation for sortingSorting of organic matters, glass, of nonflammables and high moisture materialRemoval of substances(PVC, etc.)

3 Generating dioxinScreening of recyclable material(iron, aluminum, etc.) Being crushed to the size that efficient combustion is posibleMSWR efuse Shredder Municipal WasteCustomersSelection ProcessElectricityRDFP ower Generation02 Fluff RDFI nstead of Pellet RDF, fluff RDF is crushed into pieces ranging between 120 and 150mm. It is an environmentally-friendlier fuel than pelletized RDF because no fossil fuel (LNG or diesel) must be burned during processing. This is also an outstanding method in terms of resource recycling. RDF that has not been formed into pellets01 Pellet RDFP elletized RDF is produced by segregating inflammable organic Waste material from Municipal Waste , and then drying it to increase its calorific value before forming it into pellets ranging from 10 to 100mm in size.

4 Such pelletized fuel is used mainly in Japan. RFD that has been formed into pelletsParticle ScreeningGravity SeparationNear-Infrared Screening Magnetic Separation Secondary Crushing RefuseDerivedFuel45 POSCO ENERGYW aste to EnergyBusan Waste Treatment & Power Generation FacilityProject summaryProject StructureThe Busan Waste Treatment & Power Generation Facility, the nation s first RDF Power Generation Facility, began construction in October 2010, is now under 30% of municipal Waste in Busan is delivered to and sorted here. Busan E&E, a partner of POSCO Energy , is in charge of operating. The facility will produce electricity for 40,000 households per year Expected Effects LNG Substitution : 70 million Nm /year CO2 Reduction : 174 thousand tCO2/year Location Completion Project type Facility CapacitySaenggok-dong, Ganseo-gu, BusanOctober 2013 BTO (Build Transfer Operate) Waste Treatment Capacity : 900 tons/day (Production of Fluff RDF) Power Generation Capacity.

5 25MW Project Operator- Busan E&E Repayment Loan Dividend Capital InvestmentDisposal Cost of Municipal wastes Donation Payment Power SalesKorea Power Exchange Construction Contract- POSCO E&E and 2 othersCompetent Authority- Busan BanksInvestor- POSCO 70%- TAEYOUNG E&C 30%67 POSCO ENERGYW aste to EnergyWheel CraneRefuse ShredderTrommel screenTrommel screenCombustible DryerMagnetic SeparationEddy current SeparatorMagnetic SeparationEddy current SeparatorFerrous metalNon-ferrous metalWind Force SeperatorWind Force SeperatorLight articlesHeavy articlesHeavy articlesHeavy articles Light articlesLight articlesHeavy articlesPaper, PlasticsVibrating FeederScreening by handsDiaper, Sorting Machine for light articles Wind Force Separator for light articles Waste wood Crusher Waste wood Magnetic SeparationFlip flop ScreenVibrating FeederOptical Sorting MachineNeOver 200mmUnder 80mm80~200mm80~200mmOver 200mmWheel CraneRefuse ShredderCarrying inCarrying in FeFeWind Force Separator for light articles Combustible CrusherCombustible CrusherFlip flop Screen20~80 mmLight articlesProcess Distribution Diagram(Fuelization Facility)RDF Storage89 POSCO ENERGYW aste to EnergySCRBy-PassLineSAHHVAC130 CCarrying inLegendFuelSteamBottom AshOtherProcess Distribution Diagram (Power Generation Facilities)

6 RDF Input Hopper Positive BlowerAir Preheater BurnerUrea solution Carrying inUrea solution StorageUrea solution Supply TankHeat Recovery BoilerCycloneCycloneEconomizerSodium bicarbonate StorageSodium bicarbonate CrusherFuel Supply VentilatorBag FilterInduced Draft FanSteamGasHeaterLiquor ammonia Storage TankTank LorryChimneyBoiler Superheater Boiler Feed water PumpSteam Gas HeaterFly ash StorageDeaeratorCondensate water PumpSteam turbineSteam HeaderCondensate water TankAir-cooledCondenserExtraction Steam Boiler drumFuel Storage StorageBoiler ash StorageBoiler ash StorageBoiler ash Transportation systemFunace with Circulating Fluidized BedAir Preheater MetalSeparator Separated Bottom Ash Container Sorting Bottom Ash Storage Carrying outCarrying outFluid Sand Carrying inFluid Sand StorageBottom Ash StorageBoostingBlowerFuel Storage TankFunace with Circulating Fluidized Bed1011 POSCO ENERGYW aste to EnergyPohang Waste Treatment & Power Generation FacilityThe company was selected as a priority negotiator in March 2011 and is currently in negotiations with the government, with a plan for construction to start in 2013 and end in summary Location Project leader selection Project type Facility Capacity39-3 Ho-dong, Nam-gu, Pohang, N.

7 Gyeongsang ProvinceAugust 2013 BTO (Build Transfer Operate) Waste Treatment Capacity : 500 tons/day (Production of Fluff RDF) Power Generation Capacity : 12 MWExpected Effects LNG Substitution : 34million Nm /year CO2 Reduction : 84 thousand tCO2/year Project Operator- Pohang E&E Repayment Loan Dividend Capital InvestmentDisposal Cost of Municipal wastes Donation Payment Power SalesKorea Power Exchange Construction ContractCompetent Authority- Pohang BanksInvestor- POSCO 70%- POSCO E&C 30%Project Structure1213 POSCO ENERGYW aste to EnergyBusiness Using Sewage Heat1415 POSCO ENERGYW aste to EnergyBusiness Using Sewage Heat for District HeatingOverview Principles of Heat Pump OperationProducing Heat Energy (100%) using electrical Energy (20~30%) and sewage Heat Energy (70~80%)

8 Heat Pump The heat pump utilizes the vaporization or condensation heat of a coolant to move heat from a low-temperature source to a high-temperature source (or vice-versa). Waste heat sources and low-cost heat sources are used to make this system practical. Domestic sewage is discharged with the temperature into the river. POSCO Energy recovers such wasted heat Energy by using a heat pump for district heating. 20~30%(Electrical Energy )70~80%(Sewage Heat Energy )100%(Heat Supply)Equity (50%)Offering Land/Sewage (Enforcement Agreement)Heat Supply(Heat supplying Contract)Own the facility(After project)Heating CostEPC ContractEPCC ontractorLender&(5%)(95%)Debt (50%)Project StructureTancheon E&E (SPC)Producing /Supplying Sewage Heat1617 POSCO ENERGYW aste to EnergySewage Heat Recovery ProcessThe domestic sewage discharged from the southeast of the metropolitan area is treated at the Tancheon Water Reuse Center before being discharged into the Han River through Tancheon.

9 The amount of daily discharge after treatment stands at Nm3 at the average temperature during winter of 12 C. POSCO Energy recovers such wasted heat Energy by using a heat pump fordistrict heating, which has the same effect as substituting 19million Nm3 of LNG, per year. The use of wasted Energy instead of fossil fuel can contribute to reducing the annual GHG emissions by 44,000tons Sewage flowThermal flow inside heat pumpDistrict Heating Water FlowElectric Power SupplyWastewaterEffluents(7 C)110 C70 C55 CWastewaterEffluents(12 C)RiverHouse ComplexSewage Treatment PlantDistrict Heating Substation05 Expansion Valve03 CompressorHeat AdsorptionThermal Emission02 HeatExchanger(Evaporator) 01 Refrigerant Low temp : 7 C Low pressure : 6kg/cm2 State: Liquid GasRefrigerant Low temp : 70 C Low pressure : 20kg/cm2 State: LiquidRefrigerant Low temp : 80 C Low pressure : 20kg/cm2 State: GasRefrigerant Low temp : 12 C Low pressure : 6kg/cm2 State.

10 Gas04 Heat Exchanger (Condenser) CompressorTancheon Water Reuse Center Using Sewage Heat for Distric HeatingProject summaryExpected benefits LNG consumption reduction : 19 million Nm3/yr CO2 emission reduction : 44,000t/yr Location Scheduled completion CapacityTancheon Sewage Treatment Plant2014200,000 Gcal/yearDomestic