INDUSTRIAL INNOVATION IN KAZAKHSTAN: A Case History

New Technology = New Opportunities

Paul Rodzianko, Senior Vice PresidentAccess Industries, Inc.

September 9, 2005San Diego

Case History Summary UpdateNew Technologies = New Opportunities

• December 2004 - Introduction of the GreenFuel Technological Platform by Access before President Nazarbaev at KFICA Plenary in Astana.

• 1st Half 2005 - As mandated by the President, organization of Access and ministerial and local government working groups.

• 2nd Half 2005 - Assess local conditions and econonic constraints; added focus on pre-treatment and Azima.

• 4th Qtr. 2005 - GreenFuel to fund flue gas pre-treatment test in US prior to field demonstration in Ekibastuz.

A work in progress: Next report will be made at the next KFICA Plenary in Astana with testing to begin in 2006.

Mission: To recycle carbon profitably from combustion exhaust using GreenFuel's advanced algal biotech

Products/markets range: From biodiesel to dispatchable green power, from bioplastics to food supplements, etc.

Technology platform cluster: Azima, Gas Pre-treatment, Photo-voltaics, etc.

Mission + Products/Markets + Technologies =

PROFITS + OPTIONALITY

A smart competitive edge designed to enhance shareholder values.

Innovation in Kazakhstan – a case history

The GreenFuel Platform

• ….met all transformational criteria….• potential for a revolutionary worldwide paradigm

change wherever combustion takes place.

Current thinking: CO2 represents bad air quality and will cost a fortune to address (Kyoto); NOx removal is legislated but increasingly costly.

GreenFuel thinking: treating CO2 as a valuable feedstock, one can improve air quality at a profit!

Profitability monetized in form of:• CO2 reduction (and sale of CO2 allowances)• Biofuel production (and sale)• NOx reduction (and sale of NOx allowances)• Renewable energy credits (RECs) generation (and sale)

Energy Source

Flue Gases

Cleaned

Gases

GreenFuel System

SUNLIGHT

Algae

Biodiesel

Biogas

Dry biomass

Bio-oils

Sunlight

Fluegasin

Fluegas

in

Algaedigests

CO2 & NOX

Scrubbed flue gas

Algal biofuel out

Fuel Carbon(100%)

Fuel Carbon(60%)

Biomass Carbon(40 %)

Flue Carbon(50%)

Flue

Car

bon

(50%

)

Energy Source

Flue Carbon(100 %)

Fuel Carbon(100%)

Biomass Carbon( 40%)

Energy Source

CleanGases

Algae

Biomass Carbon

Open Carbon Cycle

Closed Carbon Cycle

Patent Pending intellectual property:

• Technology for algae adaptation– From $26M NASA project for Int’l Space

Station

• Field bioreactor design that is:– Inexpensive to manufacture– Inexpensive to operate

• Analytical method for optimally exposing algae to sunlight

Eleven patents pending, more to follow, resulting in additional technology options:

Addressing the preventative maintenance needs of GreenFuel and beyond….

• Value proposition differs from GreenFuel• GreenFuel was Azima’s 1st commercial customer• Transforms equipment monitoring and risk based

maintenance through online technology and knowledge leadership

Internet

The System

Client personnel

Azima experts

Wired or wireless

data transfer

Sensors wake up on a

predetermined basis

Internet

Server

11

Wireless Shop Floor Data Acquisition

Video Surveillance

Wireless VoIP

Monitoring and diagnostic expertise for all major rotating equipment including: Turbines Compressors Cranes Pumps Motors Fans Gearboxes

Equipment Monitored

• Lowers maintenance costs:Monitoring at will: all detectable problems caught.

• Provides specific technical diagnosis:Raw data interpreted on-line access by world-class predictive maintenance experts.

• Corporate-wide maintenance approach:Efficient - eliminates multiple vendors, e.g. the piecemeal approach.

• Centralized management of maintenance riskAccountability.

Benefits of the Solution

Innovation – a continuing process

Responding to challenging coal flue gas conditions specific to Kazakhstan:

Flue Gas Pre-treatment technology(as reported to President at KFICA)

Opportunity to increase solar efficiency of GreenFuel installations:

Dual-use of photo-voltaics with bioreactors

Innovation in Kazakhstan –defining the right value proposition

• Change is often resisted • Each technology has different requirements for

successful commercialization• “Risk/reward” profile has to be understood• Challenges of market penetration• Technological vs. commercial success• Not all efforts will succeed – OK to fail

BUT KEEP ON MAKING THE EFFORT – there is $money$ in savvy technological innovation!