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Eos Energy Storage CREA Energy Innovations Summit | Denver, CO Philippe Bouchard, VP of Business Development.

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Presentation on theme: "Eos Energy Storage CREA Energy Innovations Summit | Denver, CO Philippe Bouchard, VP of Business Development."— Presentation transcript:

1 Eos Energy Storage CREA Energy Innovations Summit | Denver, CO Philippe Bouchard, VP of Business Development

2 confidential2 # in U.S. 17,350 plants164,000 miles3 million miles Utilization 47%43%34% Projected spend $505B$298B$582B Projected underutilization ~$822B of future US infrastructure will be underutilized without storage G eneration D istribution T ransmission Today’s Electricity Grid is Massively Overbuilt & Under Utilized… Ratepayers fund hundreds of $Bs of infrastructure to serve peak demand Sources: “Electric Power System Asset Optimization.” NETL, March 2011; “The Power of Five Percent.” The Brattle Group, May 2007

3 confidential3 Regional Spending on T&D Projects Completed by 2020 Heavily Weighted Towards the Rockies ~66% of projected infrastructure spend through 2030 is distribution system upgrades Sources: “Electric Power System Asset Optimization.” NETL, March 2011; “The Power of Five Percent.” The Brattle Group, May 2007

4 Significant growth in energy storage industry has already begun 4confidential Source: IHS “The Grid connected energy storage market” 2014 DOE Storage Database; Press searches Energy storage market to reach ~$25B by RFPs outstrip previously installed capacity Battery Energy storage market projection (GW)($B) 2013 energy storage announced RFPs exceed total current global installed non-hydro storage capacity (MW) 2013 represents a~$4B market

5 confidential v v Eos Aurora 1000|4000 Grid-Scale Energy Storage Eos Aurora Designed Specifically to Meet Market Requirements for Grid-Scale Storage 5 Eos Znyth TM Sub-Module DC battery performance attributes Low cost / kWh$160/kWh Long life (high # of cycles) 10,000 cycles (30 years) Energy density 6MWh in a 40ft container High energy efficiency 75% round trip efficiency Safety Non-hazardous, non-combustible Eos Aurora optimized to meet customer requirements and to provide lowest LCOE

6 6 Eos outcompetes gas peaking turbines on an LCOE basis EOS Levelized cost of energy is critical metric for adoption; Eos LCOE lower than incumbents and competitors

7 Eos Partnering with Major Utilities on Business Case Driven Product Development & Demonstration 7 OptimizeDemonstrateDeploy Eos Genesis collaboration includes: 1.Detailed business case analysis to identify profitable opportunities for deployment 2.Testing and evaluation of Eos’ novel Znyth TM battery technology leveraging partner facilities and testing platforms 3.Pilot demonstration of Eos Aurora systems to understand real-world costs and to optimize value streams Customers Miles of T&D GW Generation Countries Together Eos’ Genesis Partners represent:

8 Powerful Business Cases for Storage 8 1 MW-Scale Grid-Connected 2 Behind-the- meter Storage Electricity peak shifting (arbitrage) Generation capacity Transmission or distribution deferral Ancillary services Renewables integration premiums Time of Use (TOU) energy management Demand charge reduction $2.1/W locational capacity program Permanent Demand Reduction Demand response program participation

9 confidential9 Example: Grid-Connected ‘Triple Play’ Example Financials: 5 MW Eos Installation Cost Installed capital cost of ~$1,970 per kW Annual operating cost = $200,000 per yr ~$10.1 M Gross Revenues (Avg Annual) TOTAL per MW (10 yr period, ~70% RTE) 1.Average Energy Arb $ / MWh 2.Gen Capacity $ / kW – year 3.T&D Value $ / kW – year ~$2.7 M / yr IRR After tax, residual value23%56% Equity Total of outlay + any negative cash flows $10 M$2.5 M Payback After tax, 10% discount rate4 years2 years LeverageAll Equity Financing assumptions: 75% 8.0%, 10 yr Eos installation creates 56% IRR and 2-year payback

10 confidential10 Example: 50MVA Substation Deferral T&D upgrade performed as usual; upfront Y1 spend A Storage installed Y1 utility-owned, 5-year T&D deferral B Storage installed Y1, 10-year contract (developer monetizes market revenues) C + $10.3M addition to rate base + $16.1M addition to rate base +$10.3M addition to rate base in Y5 NPV: ($10.5M) NPV: ($6.9M) Energy storage can be used on a targeted basis to provide locational capacity and to defer costly T&D upgrades, improving reliability and lowering costs for the utility / ratepayer

11 Example Peak Load Shaving Battery / Load Profile

12 confidential12 Example: Behind-the-Meter ‘Triple Play’ Images and financial projections provided courtesy of Convergent Energy + Power Eos low-cost, energy dense, and safe battery flattens customer load while increasing resilience Example Financials: 100 kW Eos Install Cost Installed capital cost Operating cost = ~$5,000/yr $310,000 Gross Revenues (Avg Annual) Assumes 10 yr period, ~70% RTE 1.Average Energy Arb ($/kWh) 2.↓Demand charge ($/kW-month) 3.Targeted DSM ($/kW installed) $75,000 Financing assumptions: 50% 10%, 10 yr IRR After tax, residual value23%44% Equity Total of initial outlay + any negative cash flows $310 K$166 K Payback After tax, 10% discount rate4 yrs2 yrs Leverage All Equity 100 kW Project Concept Design

13 Behind-the-Meter Business Case July 2010 Demand Charge Reduction 2 Hour “Demand Response” Call 13 Balance charge / discharge profile to reduce the monthly peak without creating a new one

14 What We’re Hearing from the Solar Industry First Solar CEO, Jim Hughes: * Market cannot respond to falling solar prices because of structural limits: ✴ Transmission capacity constraints ✴ Grid stability issues ✴ Load shape and growth ✴ Utility resource planning cycles * The key to long term growth is to solve for these constraints. * Price alone won’t do it… 1) Jim Hughes, First Solar. Tomorrow’s Utility: The View from the Sun. CleanTech Investor Summit. Feb cleantechsummit.com Critical question: What is the sustainable business model and where does storage fit in?

15 confidential Commence MW Genesis Production Eos continues to make strong progress and will deliver first systems to Genesis partners in Q Q2 2013Q3 2013Q AC-Integrated System Q kW Modules Internal Testing Feb 2013 Manufacturable Sub-Module Design Q Q1 2014Q2 2014Q rd Party Testing & Validation Q Focus: Demonstrate kW-scale, test and optimize AC-integrated systems with Genesis partners, ramp up manufacturing 15 Q … Planned Pilot Projects Con Ed Q GDF Suez Q

16 confidential COMMERCIAL PRODUCT Firm delivery of 1MW/4MWh systems available at $300/kWh for 2016 install and $160/kWh for 2017 install 1 year standard warranty; up to 5 yr warranty at additional cost 16 Eos to Announce 2016 Commercial Product Offering and Aegis Program In December, Eos plans to announce availability of its 2016 & 2017 commercial product (DC battery), also offered with full AC integration via Eos’ new Aegis Program AEGIS PROGRAM Establishes formal relationships with system integrators to provide AC- integrated, turn-key systems via multiple distribution channels Aegis partners can provide warranty wrap and option for extended performance guarantee Aegis partners to be announced in near future Aurora 1000 | 4000 (DC battery system) 2015 demonstration partners will have priority access to 2016 volume

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