1. Interactive Distributed Generation for Demand Response Wayne Hartmann; VP, Marketing whartmann@powersecure.com www.powersecure.com 919-556-3056 Town Meeting: July 13-14, 2009 Washington DC

2. 2 Discussion Topics What is Interactive Distributed Generation? How can IDG be used as a DR Tool? Why Employ IDG in the DR Tool Set? Making IDG Happen

3. 3 What is IDG? Use of a Customers on-site distributed generation (DG) for DR purposes DG size typically 250-5,000kW Employ Reciprocating Engine Technology Single or multiple engine generators Connected to the distribution system Interactive (the I in IDG) DG is under Utility control for a DR call DG is monitored for reliability

4. IDG in DR Role Without IDG With IDG 4

5. 5 IDG: Typical Installation

6. 6 Dispatching & Monitoring Broadband typically used as communication medium No SCADA Additions/Modifications Needed !!!

7. IDG Turnkey Application

8. 8 IDG Retrofit Applications Aka: Harvesting

9. 9 IDG: How Used for DR Relieves Customer load by: Load management (peak shaving) Complete load curtailment IDG provides seamless operation IDG is paralleled with Utility Soft Customer & Utility unloading/reloading Does not disturb Customers process or business IDG also provides Standby Power

10. Load Management

11. Complete Load Curtailment

12. Why Employ IDG for DR? Peak Load Management Defer T&D Build Out – Address Distribution Hot Spots – Address Transmission Constraints Utility Does Not Own the Asset – Customer Owns the Asset – No Cap & Trade Issues Dispatchable by the Utility Harvesting Lowest $/kW for Firm Capacity Future: – Address Distribution Constraints – Intelligent Grid/MicroGrid Capability 12

13. Sustainability & Losses: Conventional Power Delivery Losses typically 3-7% 5% used in this example

14. Sustainability & Losses: IDG for DR Heat rates (efficiency) of modern engine/gensets applied in IDG systems are as good if not better than combustion turbines (CTs) [1,2]. IDG capacity has a heat rate of 9,800 btu/kWh saving approximately 2,200 btu/kWh of fuel input compared to the overall peak power generation portfolio published by eGrid [3]. [1] California Energy Commission; http://www.energy.ca.gov/distgen/equipment/reciprocating_engines/reciprocating_engines.html [2] California Energy Commission; http://www.energy.ca.gov/distgen/equipment/combustion_turbines/combustion_turbines.html [3] http://www.epa.gov/cleanenergy/energy-resources/egrid/index.html

15. 15 Sustainability The amount of demand reduction can be precisely matched with the proper amount of dispatched IDG Maximum efficiency of each IDG is maintained IDG can be started and fully loaded within 30 seconds Only small amounts of fuel are consumed without realizing power output and demand/load reduction. IDG are considered spinning reserve while stopped! Tremendous Green House Gas Savings and Carbon Footprint Reduction Avoids 15% Reserve Capacity Over-Build Requirement

16. 16 Sustainability IDGs can operate as bi-fuel Use mixtures of diesel and clean-burn natural gas to reduce emissions IDGs can utilize waste methane and biodiesel IDGs can be fitted with selective catalytic reduction (SCR) to further limit emissions in regions where emissions are restricted This is true for new installations and retrofitting of existing engine/gensets IDG can be applied to firm Renewables

17. Availability, Firmness, Reliability Many IDGs have greater reliability than a small group of CTs A failure of one or even a few IDGs only impacts the demand reduction capability associated with those failed systems…...the others relieve load. IDG systems have an availability of over 96.5% [1] CTs have typically an availability rate of 90-95% [2] Monitoring keeps availability high IDGs can pick up load in 30 seconds IDGs use control implementations that will pick up as much of a Customers load as the generation will allow Dynamic setpoint for non-export [1] PowerSecure operating experience from >850MW of aggregated IDG [2] European Commission Research; ftp://ftp.cordis.europa.eu/pub/eesd/docs/ev260901_poster_came-gt.pdf

18. Prebound-Rebound Effect: Signaled Passive DR

19. No Prebound-Rebound Effects: Signaled IDG-based DR

20. 20 Making IDG for DR Happen Be open to it; employ a holistic view Have rate structures and programs that support it Shared Savings, Lease, other Premium Power, Emergency Power, other Programs Train CI&I Account Managers to suggest IDG as a rate reduction tool to Customers Approach 24/7/365 power users for Greenfield or Harvesting applications Data centers, hospitals, waste water, institutional, mission critical manufacturing, municipal services, hotels, food stores, refrigerated warehouses Have DG interconnection processes in place

21. Interactive Distributed Generation for Demand Response 21 Thank YouQuestions? Town Meeting: July 13-14, Washington DC Interactive Distributed Generation for Demand Response