GEOTHERMAL

ENERGY POTENTIAL

IN

ONTARIO

Hybrixcel, Inc.

http://hybrixcel.com/news/publications/

April 2018

DISCLAIMER HYBRIXELForward Looking Statements

Certain information set forth in this presentation contains “forward-looking information”, including

“future oriented financial information” and “financial outlook”, under applicable securities laws

(collectively referred to herein as forward-looking statements).

These statements are not guarantees of future performance and undue reliance should not be placed on

them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties,

which may cause actual performance and financial results in future periods to differ materially from any

projections of future performance or result expressed or implied by such forward-looking statements.

Forward-looking information may include reserve and resource estimates, estimates of future production,

costs of capital projects and timing of commencement of operations, and is based on current expectations

that involve a number of business risks and uncertainties.

Although forward-looking statements contained in this presentation are based upon what management of

the Company believes are reasonable assumptions, there can be no assurance that forward-looking

statements will prove to be accurate, as actual results and future events could differ materially from those

anticipated in such statements. Hybrixcel Corporation undertakes no obligation to update forward-looking

statements if circumstances or management’s estimates or opinions should change except as required by

applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking

statements.

This caution is provided in accordance with the requirements of Parts 4A and 4B of National Instrument

51-102 Continuous Disclosure Obligations, respecting disclosure of forward looking information.

DEEP DRILLING USE PROJECT

(DEEPDU)

HYBRIXEL

PROJECT APPROACH

• Resource Development

• CHP Production

• Community Impact

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CURRENT STATE OF KNOWLEDGE

In Canada, the Western Canada Sedimentary Basin is of particular interest for its

geothermal energy potential. In British Columbia (Meager Creek), the Northwest

Territories (Fort Liard) and Saskatchewan (DEEP project near Estevan), hydrothermal

geothermal projects (using heat from naturally present hot subsurface water) are at the

technical economic study stage. A study has been conducted in Alberta on the potential

of deep geothermal energy. In 2016, not a single geothermal power plant had yet been

built in Canada.

In Eastern Canada, recent technological progress in drilling to reach geothermal fluids,

and in creating and managing geothermal reservoirs kilometres beneath the earth’s

surface presage the harnessing of thermal energy at very great depths over the medium

to long term. In Québec, the potential of deep hot rock geothermal energy has been

assessed. However, no exploration, demonstration or industrial operation projects have

been planned for the medium or long term.

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POTENTIAL OF DEEP GEOTHERMAL ENERGY

The year of 2017 ended with a total installed geothermal power generation

capacity of 14,060 MW. The U.S. ranks first for electricity generation from

geothermal steam. In 2017, U.S. installed capacity totaled 3591 MW and

energy production, 16.6 TWh. Installed capacity there could rise to 5.6 GW

in 2020. In the Eastern U.S., deep hot rock electricity generation has an

estimated potential of 500 GW, equal to the country’s total installed capacity

today.

Ontario’s geological environment consists of sedimentary rock formations

potentially thousands of metres deep. In southwestern Ontario, geothermal

power plants could be powered by reservoirs more than 6 or 7 km beneath

the earth’s surface and covering 10% to 15% of the region’s area. The fluid

at about 150°C from such reservoirs could power plants with installed

capacities of 2 to 5 MW per production site.

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Geothermal potential in Ontario

Reservoir Temperature at depth of 6.5 km

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Sedimentary Basins in OntarioSouthern Ontario region is a

sedimentary basin covering

about 72,000 km2 that is

predominantly south of 45

degrees north. Four major

sedimentary basins occur

within Ontario. In northern

Ontario, sedimentary rocks

occur within the Moose River

and Hudson Bay basins. In

southern Ontario, thick

accumulations of sedimentary

rocks are present in the

Michigan and Appalachian

basins. Rocks within these

basins were originally

horizontal, but have

subsequently tilted and

deformed forming a

northeast-trending ridge known as the Algonquin Arch.

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Sedimentary Basins in OntarioBecause of this, the thickness of the rocks increases westerly into the Michigan Basin

and southerly into the Appalachian Basin, reaching a maximum thickness of about

1400 m beneath Lake Erie and at the southern tip of Lake Huron, and much greater

thicknesses beneath the neighbouring U.S. states. Extensive development of porosity

and permeability is evidenced by the presence of oil and gas reservoirs and regional

saline water aquifers in these basins.

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HIGHLIGHTS

• Low risk geology

-Initial temperature and porosity/permeability data already

available from existing well data

• Reliable and commercialized technology

-The binary technology allows for production of electricity from low

temperature resources

• Sustainable use of geothermal as a renewable resource will

improve Canada energy security and make a major contribution

to solving climate and energy challenges

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TECHNOLOGY

Binary power plants (80 to 150°C)

The organic Rankine cycle, a variant of the Rankine cycle, uses as a working fluid

an organic fluid, e.g. hydrofluorocarbon, with a low boiling point. The latter is

vaporized by the heat coming from water of the geothermal reservoir at a

temperature below 150°C.

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ONTARIO ENERGY DEMAND

Ontario's total energy demand in 2017 was 132.1 terawatt-hours. Ontario

Grid-Connected Peak Demand (for 2017) 21,786 MW

In following outlooks, the annual consumption of electricity could increase to

between 177 TWh and 197 TWh by 2035. Ontario would need to generate more

electricity than it does today to meet these higher levels of demand.

Electricity demand forecasts (Source: Ontario Planning Outlook)

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ONTARIO ENERGY DEMAND

Total Grid-Connected and Contracted Embedded Generation Capacity

This chart shows all grid-connected capacity and IESO-contracted capacity in the

province.

Grid-Connected Generation Capacity 36,863 MW (Q4)

Contracted Embedded Generation Capacity in Commercial Operation 3,302 MW (Q4)

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Year Nuclear Hydro Coal Gas Wind Biofuel Solar Other Total

2017 Q4 (MW)

13,009 8,767 0 10,548 4,804 603 2,409 24 40,164

2017 Q4 (%)

35% 22% 0% 26% 12% 2% 6% <1%

ONTARIO ENERGY DEMAND HYBRIXEL

Available Grid-Connected Capacity at Peak 26,112 MW (Q4)

Ontario will have to rebuild, replace or acquire 7409

MW of electricity by 2030 – What will fill this gap????

Peak Demand 20,306 MW (Q4) Operating Reserve Requirement

1,418 MW (Q4)

Minimum Demand 10,534 MW (Q4) Source: IESO

GREENHOUSE GAS EMISSIONS The marked decline in greenhouse gas emissions (measured in tonnes of CO2 equivalent) is a result

of the phase-out of coal-fired electricity generation in the province and uptake of renewable

generation and conservation measures. Greenhouse Gas Emissions for the Ontario Electricity Sector

The chart below shows annual greenhouse gas emissions (measured in tonnes of CO2 equivalent) for

the years 2008-2017. Year-to-date greenhouse gas emissions in Q4 2017 totalled approximately 3

Megatonnes (Mt)

Air ContaminantsAir contaminants, including oxides of sulphur (SOx), oxides of nitrogen (NOx) and

fine particulate matter (PM2.5), are also released during combustion of fossil fuels

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Greenhouse Gas Emissions ReductionsAir ContaminantsAir contaminants, including oxides of sulphur (SOx), oxides of nitrogen (NOx) and

fine particulate matter (PM2.5), are also released during combustion of fossil fuels

Air Contaminants for the Ontario Electricity Sector (Tonnes)

Source: IESO, Environment Canada

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Sox Emissions 76,020 30,762 38,507 11,966 10,342 10,192 846 424 462 228

NOx Emissions 38,314 23,653 27, 358 18,198 19,867 17,973 11,448 10,364 7,630 3,432

PM2.5

Emissions 1,309 987 843 518 468 445 283 235 215 140

ADVANTAGES OF BINARY PLANTS

Environmentally, binary plants possess key advantages in that they do

not release geothermal fluids into the environment. Earth's gases do not

just include water vapor. They include nitrogen, carbon dioxide,

hydrogen sulfide, ammonia, mercury, radon, and boron. Most of the

environmental hazards are released through disposal water or into the

environment. Although it is a matter of common practice for power

stations to remove hydrogen sulfide from emitted geothermal steam, this

toxic gas can still pose an environmental or health hazard. Also, the

greenhouse (CO2) emissions are generally around 13-380 g/kWh, which

is small compared to the 906 g/kWh from oil, 453 g/kWh from natural

gas, or the 1042 g/kWh from coal, but still substantial. Binary plants

skirt these issues altogether by returning the cooled geothermal gas back

to its underground reservoir.

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HYBRIXELPROJECT EMISSIONS AVOIDANCE

It is expected to prevent 41000 metric tons of carbon dioxide emissions

annually which is equivalent to the emissions from 8779 cars,

44,857,768 pounds of coal burned and 94,924 barrels of oil comsumed.

ESTIMATED CAPITAL COSTS

• Net power production of ~1.25 MW/well

Capital Costs for 5 MW Field:

• Exploration/Well Re-Entry Program: $2 million

• Production Drilling Cost: $15 million

• Injection Drilling Cost: $15 million

• Binary Turbine Power Facility: 5.0MW @ 4.8 million/MW = $24.0 million

• Piping & Fluid transport 5.0 MW @ $0.3 million/MW = $1.5 million

Generic Costs:

• Project Management: ~10% of above total = $6.0 Million

• Total Capital Costs: $63.5 Million

• Installed Capital Costs/MW = ~$12.7 Million

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REFERENCES

1. Bayer, B., Rybach, L., Blum, P., Brauchler, R. 2013. Review on life cycle

environmental effects of geothermal power generation. Renewable and

Sustainable Energy Reviews, vol. 26, pp. 446–463.

2. Bertani, R. Geothermal Power Generation in the World 2010-2014-Update

ReportProceedings of the World Geothermal Congress, Melbourne, Australia, 19-

25 April 2015. (Online) 2015.

https://pangea.stanford.edu/ERE/db/WGC/papers/WGC/2015/01001.pdf.

Document accessed on December 2, 2017.

3. Bouchard, V. Projet géothermique à Fort Liard. (Online) 2012. http://

www.aquilon.nt.ca/article/Une-premiere-au-Canada-201206281501/

default.aspx. Page accessed on December 2, 2017.

4. Delony, J. 2016. Outlook: Future of Geothermal Industry BecomingClearer.

(Online) 2016. http://www.renewableenergyworld.com/articles/2016/01/2016-

outlook-future-of-geothermal-industry-becoming-clearer.html. Page accessed on

December 2, 2017.

5. DiPippo, R. Geothermal Power Plants: Principles, Applications, Case

Studies and Environmental Impact, 3rd ed. (Online) 2012.

https://www.u-cursos.cl/usuario/c658fb0e38744551c1c51c640649db2e/

mi_blog/r/Geothermal_Power_Plants.pdf. Document accessed on

December 2, 2017.

6. Geothermal Energy Association.A Guide to Geothermal Energyand the

Environment. (Online) 2007.

http://geo-energy.org/reports/environmental%20guide.pdf. Document accessed on

December 2, 2017.

7. Glassley, W. E.Geothermal Energy Renewable Energy and theEnvironment,

2nd ed. (Online) 2014. http://www.crcnetbase.com/doi/book/10.1201/b17521.

Document accessed on December 2, 2017.

8. Intergovernmental Panel on Climate Change. Renewable EnergySources and

Climate Change Mitigation. (Online) 2011. https://www.ipcc.ch/pdf/special-

reports/srren/SRREN_FD_SPM_final.pdf. Document accessed on December 2,

2017.

9. Jessop, A. M., Ghomeshei, M. M., Drury, M. 1991. Geothermal

Energy in Canada. Geothermics, vol. 20, pp. 369–385.

11. Majorowicz, J. A., Garven, G., Jessop, A., Jessop, C. 1999.

Present heat flow along a profile across the Western Canada

Sedimentary Basin:

The extent of hydrodynamic influence. In Foester, A., Merriam,

D.(Editors) Geothermics in Basin Analysis. Computer

Applications in the Earth Sciences. Kluwer Academic/Plenum

Publishers. pp. 61–80.

12. Majorowicz, J. A., Moore, M. Enhanced Geothermal Systems

(EGS) Potential in the Alberta Basin. (Online) 2008.

http://www.cangea.ca/uploads/3/0/9/7/30973335/albertaegspotentialr

eport_s.pdf. Document accessed on December 2, 2017.

13. Massachusetts Institute of Technology. The Future of Geothermal

Energy. Impact of Enhanced Geothermal Systems (EGS) on the

United States in the 21st Century. (Online) 2006.

https://www1.eere.energy.gov/geothermal/pdfs/future_geo_energy.pd

f. Document accessed on December 2, 2017.

14. Meager Creek Geothermal Project. (Online) 2016.

http://www.electricityforum.com/news/mar04/meager.html. Page

accessed on December 2, 2017.

15. Menberg, K., Pfister, S., Blum, P., Bayer, P. 2016. A matter of

meters: State of the art in the life cycle assessment of enhanced

geothermal systems. Energy and Environmental Science, vol. 9, pp.

2720–2743.

16. Project Development Strategy Estevan/DEEP. (Online) 2016.

http://www.deepcorp.ca/project-development-strategy/. Page

accessed on December 2, 2017.

17. Natural Resources Canada, Geothermal Energy Resource

Potential of Canada. (Online) 2012.

http://publications.gc.ca/collections/collection_2013/rncan-

nrcan/M183-2-6914-eng.pdf. Document

accessed on December 2, 2017.

Reproduction authorized

with acknowledgement of source

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