1. Tackling the Business Case For Energy Storage Energy Storage - Ready to Help Manage Renewables, Demand Response, and Improve T&D Alaska Energy Storage Workshop Anchorage, AK June 20, 2012

2. America’s Cooperative Research Network Over 900 co-ops Serves 42 million Americans in 47 States Covers 75% of nation’s land mass Owns 42% of all Distribution Line Totals 2.4 Million Line Miles Powered by 55,000 MW Delivers 178 billion kWh of generation annually 2 Timely Energy Innovations Membership established CRN to Monitor, Evaluate and Apply Technologies that: Improve Productivity Enhance Service Control Cost

3. 3 Environmental Thrifty Community Hardship Business Rates Reliability Information Privacy Health Conserve Aesthetics Safety Regulations Sustainable

4. NRECA Technical Teams are Member Driven Our Goal is to Help Clear the Hurdles We start by listening – what challenges are faced? Next we find and vet solutions and identify the hurdles Research is then directed at moving the solutions past the hurdles through support for DevelopmentDemonstrationDeployment 4

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7. DFA Advanced conductors Dist. Automation Edge Voltage Control Superhydrophobic Coatings Solar Options Solar PV Deployment DG Interconnection Advanced Batteries Compressed Air Storage Electricity from biomass Electric Vehicles LED Lamps Energy Efficiency Program Design Demand Response Models Center for Energy Innovation0 Multipollutant Control Cycling Damage to Coal Plants Coal Ash Refining Microturbines Fuel Cells MultiSpeak® Secure Software Development Fuzz Testing Cloud Computing Open Modeling Framework SCADA CVR Remote Sensor Technology Integral Disconnect 7 Distribution Operations Generation & Fuels Smarter Grid Transmission & Substation Renewable & Distributed Energy Innovations

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9. 2012ResearchProjects Multi-Pollutant Control Distribution Fault Anticipation Superhydrophobic Coatings LED Agriculture Lighting Estimated Life of EE Improvements Next Generation Utility IT Secure Software Development

10. Energy Storage Breakthroughs Longer Life - 5,000 to 10,000 cycles now possible Costs have decreased by over 50% with multiple value streams now providing payback in less than five years Large battery complexes are being built in >1 MW Acceptable efficiency of 70% or more Multiple value streams are possible – Peak shaving – Frequency regulation – T&D asset deferral – Minimize cycling and two-shift damage from renewables to fossil plants

11. Renewable Energy Hurdles Economics Relative to Traditional Intermittency Integration Location, Location, Location Regulatory Mandates Member Expectations 11

12. Energy storage has huge potential, but there are too many choices and not enough knowledge. 12

13. Cooperatives and Energy Storage History of ES Projects – McIntosh CAES – Golden Valley NiCad system – Crescent Electric BESS Recent projects – Kauai PV firming – Kotzebue wind integration – Midwest EC distributed energy storage – Others Ongoing research efforts – Energy Storage Handbook in coordination with DOE / Sandia / EPRI – Co-op specific Energy Storage Toolkit There is a groundswell of interest, but lack of in-ground demonstration is a hurdle. 13

14. Energy Storage Hurdles Technical uncertainty, changing technology Business case is not well understood Limited experience in real-world systems Specific utilities require specific solutions 14

15. National Cooperative Energy Storage Deployment Initiative Listen to co-op needs Work with vendors to develop a set of designs Optimize install requirements Standardized Designs Work with CFC, Co-Bank others to develop business models Use National Purchasing Program to get economies of scale Consolidated Financing and Purchasing Nationwide pilot program across a range of applications Experience transfer to the entire cooperative network through dedicated outreach Leverage cooperative strengths and existing resources to gain experience for the whole community. 15

16. Storage Evaluations 16 Many companies and technologies choices Wide range of applications – Short-duration needs (high current inrush for motor start, frequency regulation, ramp requirement of renewables) – Long-duration needs (peak shaving, storing renewables) Focus on your needs and the value streams first, the technology choice second

17. Storage is Different 17 Cycle life/discharge pattern of the energy storage system is critical. (i.e., map out how the storage will be used) Nomenclature – kWh, MWh, kW-h Evaluate energy storage using discounted cash flow analysis of the multiple value streams and not cost of electricity. CRN working with co-ops to develop an RFI and RFP for purchasing an energy storage system.

18. Possible Value Streams For Energy Storage Assuming low penetration of renewables Trim Daily Peaks  Capacity credit or demand charge reduction Frequency regulation – (higher $$ in pay for performance for energy storage) T&D capital asset deferral  Avoid new distribution transformers or transformer banks  Avoid line reconductoring and new lines (big $$$$)

19. Possible Value Streams For Energy Storage Assuming low penetration of renewables Arbitrage value Firming and Shifting Renewables  Improve thermal plant efficiency/reliability  Reduce CO 2 emissions from thermal plants  Reduce congestion and line losses  Eliminate rapid ramp rate requirements

20. Additional Value Streams For Energy Storage Assuming high penetration of wind, such as >10% wind energy Avoid damage to coal-fired power plants Prevent spilling of wind energy at night Additional need for frequency regulation Dynamic VAr support Improved service reliability

21. Emerging Storage Technologies Lithium-Ion & Lithium Titanate Batteries - Expensive but costs dropping, acceptable cycle life, used for short bursts (spinning reserve, frequency regulation, managing high ramp rates) Advanced Lead Acid – Improved cycling vs. traditional lead acid, but still low cycle life. Potential lower cost option Zinc Air – Potentially low cost, but in early stage of development Ultra-Capacitors (UCAPs) – Potentially lowest cost option, but in early stage of development 21

22. Emerging Storage Technologies Dry Cell Battery Technology – Low cost for short duration storage and acceptable cycle life “Flow” Batteries – Megawatt scale, excellent cycling and low cost, but mechanically complex systems Isothermal Compressed-Air Energy Storage (ICAES) – Potentially very low cost that could make 100 MW+ scale storage possible 22

23. Silent Power Customer-Sited Distributed Energy Storage (Smart Grid Demo) Modular units -- 5/10 kW power with 10/20 kW-hr storage (2 hours) Cycle life of 1000 -5,000 cycles (80/10) Customer benefits include backup power as a UPS and renewable integration Potential utility benefits include ability to store excess renewable energy and be dispatched for short- term demand response and peak shaving (for two hours), and manage motor start-up loads 23

24. KEA-CRN Demonstration Objectives  Manage the intermittency of Wind to reduce the number of diesel generator startups  Eliminate the spilling of wind  Reduce diesel fuel consumption  Provide local voltage and frequency regulation support  Provide spinning reserve  Increase the Penetration of wind to nearly 100%  CRN monitoring performance, economics, and documenting the value proposition

25. ASSESSING SMART GRID BENEFITS: THE OPEN MODELING FRAMEWORK 25 and STORAGE

26. Hurdle: What’s the ROI? Technical uncertainty, changing technology Lack of consistent analytical tools – Period modeled – Factors considered – Underlying assumptions – Algorithms – Metrics Different approach necessary for different technologies – e.g., DG vs. CVR vs. Storage Technical uncertainty, changing technology Lack of consistent analytical tools – Period modeled – Factors considered – Underlying assumptions – Algorithms – Metrics Different approach necessary for different technologies – e.g., DG vs. CVR vs. Storage Comparing analyses done with different models is inherently risky. 26

27. Open Modeling Framework Source Data Module Reference Input Module Technology Modules Reference Output Module Grid Modules Monetization & Visualization Module 27

28. OMF: Technology Modules Technology Modules The Technology Modules are being derived from existing models, refined to use the same or similar inputs and to produce common engineering outputs. Source Data Module Reference Input Module Technology Modules Reference Output Modules Grid Modules Monetization & Visualization Module 28

29. Source Data Module Reference Input Module Technology Modules Reference Output Module Grid Modules Monetization & Visualization Module OMF: Reference Input Module Reference Input Module The Reference Input Module contains a refined superset of the data used by the complete set of technology modules – refined to remove duplicative data. 29

30. Source Data Module Reference Input Module Technology Modules Reference Output Module Grid Modules Monetization & Visualization Module OMF: Source Data Module Source Data Module The Source Data Module provides links to basic source data such as the National Climatic Data Center and F.W. Dodge. 30

31. Source Data Module Reference Input Module Technology Modules Reference Output Module Grid Modules Monetization & Visualization Module OMF: Reference Output Module Reference Output Module The Reference Output Module collects the output from the technology and grid modules in a standard framework. These are typically direct costs rather than ROI, IRR, or calculated metrics and engineering impacts. 31

32. Source Data Module Reference Input Module Technology Modules Reference Output Module Grid Modules Monetization & Visualization Module OMF: Monetization & Visualization Module Monetization & Visualization Module The Monetization & Visualization Module takes data from the Reference Output Module and converts these into cost/benefit analyses displayed in tabular and graphical form. AND – it facilitates comparison of different analyses. 32

33. OMF: Grid Modules Grid Modules The Grid Modules are built around GridLab-D. Source Data Module Reference Input Module Technology Modules Reference Output Module Grid Modules Monetization & Visualization Module 33

34. PPC ZnBr GCAES Ex.: Value To G&T Assuming High Penetration of Wind

35. PPC ZnBr GCAES Ex.: Value of Energy Storage To Distribution Cooperatives

36. Conclusions Energy Storage requires multiple value steams, which can pay for the installed costs of a unit. Energy Storage offers more value to distribution cooperatives than G&Ts. Energy Storage is cost effective today when the right applications are paired with an appropriate technology. Energy Storage is essential to manage renewables. Co-ops likely to be early adopters.

37. Possible Risks and Cautions Technologies are changing rapidly, so difficult to pick a winner Promising technologies can fail due to corporation failings If Energy Storage is sited for delaying T&D assets, it must be mobile to prevent being stranded in the future

38. Energy Storage Resources CRN partnering with Sandia National Lab and EPRI Revision of popular Handbook – Application first, then technology – Financial analysis tools – RFP template – Database of technologies CRN to offer additional evaluation tools and sample RFPs as part of an “Energy Storage Toolkit.” 38

39. Timely Energy Innovations www.nreca.coop Tom Lovas NRECA/CRN Arlington, VA tom.lovas@nreca.coop

40. Back-Up Slides 40

41. Lithium-Ion & Lithium Titanate AttributeRating Capital costFair at $600/kW-hr or $4200/kW-7 hours Round-trip efficiency90% to 95% Lifetime in Cycle Life4,000 to 16,000 deep cycles Altair Nano 1 MW System

42. 42 Indianapolis Power & Light’s Altair Nano Lithium Titanate 2 MW/500 kW-h

43. EOS Energy Storage (Zinc Air) AttributeRating Capital costExcellent at $160/kW-Hr or $2000/kW-7 hours Round-trip efficiency~65% to 70% Lifetime in Cycle Life2,000 to 10,000 deep cycles

44. Ultra-Capacitor 1 st Lighten the Load Inc. AttributeRating Capital costExcellent at $50/kW-hr to $150/kW-hr or $650/kW-7 hours to $1500/kW-7 hours Round-trip efficiency~90% Lifetime in Cycle Life>>10,000 deep cycles

45. Xtreme Power’s Dynamic Power Resource Battery (Dry Cell) AttributeRating Capital costFair at >$1000/kW- hr or ~$7000/kW-7 Hr Round-trip efficiency 80% to 85% Lifetime in Cycle Life 1,000 cycles at 100% DOD and 100,000 cycles at 20% discharge Xtreme Power website Dry Cell with proprietary formulas of fundamental alloys, such as copper, lead and tellurium

46. Premium Power Corp’s Zinc Bromide AttributeRating Capital costExcellent at $270/kW- hr or $2000/kW-7 hr Round-trip efficiency 68% to 70% Lifetime in Cycle Life Est. 10,000 deep cycles Premium Power Corp. TransFlow-2000 Modules

47. General Compression Isothermal Compressed Air Energy Storage (ICAES) Sited in salt beds. Seasonal wind storage possible (100+ hours). Less than 1 second response. AttributeRating Capital costExcellent at $1000/kW for 10 hours and $10/kW-hr Round-trip efficiency75% to 80% Lifetime in Cycle LifeNo known limitation in cycle life

48. ICAES Geologic Locations Relative to Class IV Wind Resources (in Blue) General Compression