September 13-20, 2004

Joint venture to use biomass heat to grow organic greenhouse vegetable crops

A new joint venture partnership will use biomass-fuelled heat to grow organic, pesticide-free greenhouse vegetable crops to meet a growing demand in Alberta. The company, Pure Produce Greenhouses Killam (PPGK), represents an alliance between Vancouver-based Clean Energy Combustion Systems and Pure Produce Greenhouses Canada (PPGC).

The greenhouses, to be designed by PPGC, will incorporate its state-of-the-art hydroponic growing technology and will utilize Clean Energy's proprietary biomass gasification system for heating, using straw or other waste material as the fuel source. PPGK will operate these leading-edge greenhouse systems in central Alberta (Killam), growing "short crop" vegetables such as lettuce and spinach, and root vegetables including radish and carrots. The crops grown will be processed as value-added bagged salads and complete meal salads.

Under the terms of a memorandum of understanding, PPGC will own a 40% interest in PPGK and will supervise the construction and operation of the greenhouses. Clean Energy will own a 60% interest in the venture and will be responsible for providing construction and operation financing for the project. The initial capital requirement of $3.75 million (U.S.) ($5 million (Cdn)) will fully finance two ranges. Each two-acre range will consist of 20 greenhouse units, a nursery and a service building.

Pending the finalization of capital financing for the project, construction will begin this fall, with first crop expected in early spring 2005. Each hydroponic range could produce 11 crops per year, with estimated sales of $1.7 million (Cdn) annually. Based on an average construction cost of $2.4 million (Cdn) per range, the partners anticipate that PPGK could be self-financing within six years, at an expansion rate of 20 additional ranges per year.

The facilities represent a significant leap in quantity and quality over current market alternatives. Production capability is six to 12 times greater than traditional soil based solutions, with crops grown and harvested year-round. The crops will be pure and superior in quality, free of insecticides and herbicides. Preliminary market studies indicate a large and viable market for fresh vegetables, which currently are shipped from California, a five-day transport to Alberta. Killam is central to the Edmonton/Red Deer/Calgary corridor, and studies show that product from up to 200 ranges at the Killam site could be sold in this market.

Clean Energy is a development-stage U.S. public company based in Vancouver. The company's principal technology is a patented, high-efficiency valveless combustor. It operates on the principles of cyclical pulse combustion, originally developed for aerospace propulsion. The technology offers advantages over the standard, steady-state combustion technology currently used in the heat transfer industry in terms of both energy efficiency and resulting fuel cost savings as well as significantly reduced NOx and other emission levels. Clean Energy's pulse combustion technologies can be applied to a wide range of systems built to burn hydrocarbon-based fuels and waste matter to produce thermal energy for heat and on-site power generation.

More information is available from visit Clean Energy Combustion Systems, 604/681-9337, FAX 604/681-9354, E-mail: shareinfo@clean-energy.com, Web site www.clean-energy.com.

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