$565MM electric generation facility to create 104 jobs

Plans are under way for Lima Energy Company to construct a $565 million electric generation facility in Lima, Allen County, which will create 104 full-time jobs. The investment includes $178.3 million in land acquisition and new construction, $335.1 million in machinery and equipment, and $79.9 million

in professional fees. The company hopes to complete development. and finance the project by the end of the second quarter of this year. Operations are scheduled to begin in late 2007. The Ohio Tax Credit Authority has approved a Job Creation Tax Credit valued at more than $1.1 million in connection with the project.

"We are still negotiating the engineering and construction contract and are making progress on selling the balance of power," explained Dwight N. Lockwood, project director - Lima Energy. "We must sell 100 percent of the capacity of the plant (long term contracts) in order to finance it. This is not a merchant plant where the customers are not known in advance."

"This project represents Ohio's future as a technology leader, and more than 100 new high-tech jobs for Lima," Governor Bob Taft stated. "I commend Lima Energy Company for its vision in utilizing a clean coal technology in the production of electricity. Not only will this facility be the first of its kind in Ohio, but also the largest and most environmentally clean Integrated Gasification Combined Cycle (IGCC) plant in the nation."

Lima Energy Company (LEC) is a wholly owned subsidiary of Global Energy, Inc., an international environmental energy technology company that was established in 1988 and is based in Cincinnati. The Lima facility will use a clean coal technology gasification process known E-GasTM, similar to Global's Wabash River Energy plant in Terre Haute, Indiana. Gasification technologies represent a significant breakthrough for environmentally friendly electricity production, and will release less than half the emission limits recently placed on conventional coal plants, according to the company.

LEC will construct its facility on a 63-acre, former brownfield site that was cleared of deteriorated structures, and cleaned environmentally under the Ohio EPA's Voluntary Action Program (VAP). The electric generation operation will use E-Gas technology to produce synthetic gas to generate 540 MW of electric power. The plant will utilize approximately 5,000 tons of solid fuel per day. The plant will initially use petroleum coke as a feedstock. However, the opportunity to also use Ohio coal could mean jobs for Ohio coal miners. While the primary product will be electric power for the wholesale market, the production and sale of synthetic gas for products such as carbon nanofibers are some examples of the new technologies Ohio is striving for with the Third Frontier Initiative.

LEC will be an exempt wholesale generator under Federal Energy Regulatory Commission authority. The project in Lima will consist of three major components. First, a power island that will generate approximately 540 MW of electric power for sale. The plant will utilize two combustion turbine generators operated in combined cycle, with a single steam turbine generator. Second, a gas island produces synthetic gas, as the fuel for the gas turbines and also with potential for sale "across-the-fence." The synthetic gas can be sold as either a fuel or a feedstock into another process. Third, a fuel island will include capability to handle, store, and feed to the gas island approximately 5,000 tons per day of solid fuel, delivered by rail, and associated feed components. The primary product will be electric power for commercial sale on the wholesale market.

According to Ohio Department of Development (ODOD) director Bruce Johnson, the State of Ohio is developing further assistance beyond the Job Creation Tax Credit and assistance under the VAR That could include bond financing from the Ohio Air Quality Development Authority and business development and roadwork grants from the ODOD. "This, is great example of how we can help take a contaminated site and revitalize it for a productive use," stated Johnson.

The Job Creation Tax Credit was a major factor in LEC's decision to locate this project in the State of Ohio, according to the ODOD. Global Energy, Inc., has been working with the City of Lima for seven years in an effort to establish en electric generation facility in Lima. "Lima has excellent rail and interstate service and, with the various industries there, a skilled workforce," Lockwood explained.

The financing and the tax credit were key in making the project cost effective to undertake. The City of Lima has also offered direct local financial support for this project.

"The Governor and Ohio EPA director came to Lima to sign the documents approving the brownfield environmental remediation that the city undertook," Lockwood explained. '"The Ohio Department of Development has continued to be a strong advocate and supporter of the project, particularly at the local level. The City of Lima has been involved the entire way with support and advocacy within the community and at regulatory hearings with Ohio EPA and PUCO."