1. incoteco 1 The Case for Distributed Storage in Ireland As its wind capacity becomes significant

2. incoteco 2 Executive Summary Ireland has an outstanding wind resource......and can develop windpower commercially at 50-60 per MWh Once capital costs are paid, the long term marginal costs of wind power are very low The fuel-only price of power from gas is already 70 – 80 per MWh... …and is more likely to rise than fall Distributed storage can make wind penetration viable up to 3,000 MW and even more

3. incoteco 3 Distributed Storage......closes the gap between day before forecasted wind output and actual wind output...and so reduces the need for spinning and hot fossil stand-by plant to provide balancing power...delivers primary, secondary and tertiary operating reserve in the event of a trip in the generation system...delivers reactive power from many nodes...can deliver a black start capability The conditions for the commercial roll-out of distributed storage are the best in Europe

4. incoteco 4 VRB Demonstration Plants World-wide PlaceApplicationSpecificationStart date Kashima Kita PS, JapanLoad levelling200 kW x 4 h1996 Office building, OsakaLoad levelling demo100 kW x 8 h2000 Sanyo factoryVoltage sag, load levelling 3000 kW x 1.5 sec 1500 kW x 1 hour 2001 Wind power, HokkaidoStabilization wind turbine output 170 kW x 6 h2001 Dunlop Golf CoursePV hybrid, load levelling30 kW x 8 h2001 University, JapanLoad levelling500 kW x 10 h2001 Stellenbosch U, SALoad levelling250 kW x 2 h2001 EPRI, ItalyPeak shaving42 kW x 2 h2002 Pacific Corp, UtahEnd of line peak shaving250 kW x 8 h2004 King Island, AustraliaStabilization wind turbine250 kW x 8 h2004 Tomamae Wind farm, Hokkaido Stabilization wind turbine4000 kW x 2 h2005 Nine Years - no re-invention of wheel needed

5. incoteco 5 Irelands dependence on gas - 1 55%...and increasing

6. incoteco 6 Irelands dependence on gas - 2 30% Efficient 40% efficient 51% efficiency impaired by cycling

7. incoteco 7 Price, October 2005 Winter Price, 2006 August 2005

8. incoteco 8 When UK sneezes... Source: FT 6 Oct 2005 & OFGEM, UK Expect continued high prices for gas into the indefinite future

9. incoteco 9 THE GOOD NEWS! Low Cost of Irish Wind Power High load factors achieved by wind generators in Ireland......and low bank interest rates for good wind projects...mean Irish wind turbine owners can obtain a good return from a feed-in price of 57 – 59 per MWh John Ward – Murray Associates October 2005

10. incoteco 10 But the value of Irish wind Power......is reduced by: 1.Stochastic nature of wind 2.Difference between actual wind output compared with forecast on gate closure previous day… 3.…therefore a need for balancing power provided by firm fossil units… 4.…so losing CO 2 advantages 5.Concentrations in windy west means wind can provide almost no reliable capacity

11. incoteco 11 What can we learn from Denmark? West Denmark has peak load of about 3700 MW and domestic consumption of 21 TWh (2004) Eirgrids peak is about 3800 MW and domestic consumption of 26 TWh (2004) Comparably sized electricity systems

12. incoteco 12 Ireland & West Denmark ESB Generation Adequacy Report, 2002

13. incoteco 13 Wind power over 500 MW is usually exported

14. incoteco 14 West Denmark Clear trend

15. incoteco 15 Intuition suggests... That without storage, wind power feed-in over 500 MW will be progressively more difficult to manage......as growing capacity and high load factor result in frequent output spikes Wind does not respect time of day and seasonal power demand Large scale wind capacity needs storage Curtailment is wasteful!

16. incoteco 16 EIRGRID: Generation Adequacy Report Expect Increasing curtailment West DK wind output over 500 MW is most often exported

17. incoteco 17 Batteries can restore this value VRB battery at Tomamae wind park, Hokkaido

18. incoteco 18 Tomamae - Output smoothing Acknowledgement to J-Power (1). Sum of generators output Time[s ] [kW ] (2).battery is charging (2).Battery is discharging (3).Target output (T=large) (3).Target output (T=short) (3).Target output (T=Variable)

19. incoteco 19 Smoothing at Tomamae supplies...grid quality power to Hokkaido reducing the number of fossil plants required to balance minimum, summer, night time loads......from two to just one fossil unit......saving fuel, operational personnel and mechanical wear Scale of Operations on Hokkaido is similar to Ireland and West Denmark

20. incoteco 20 Forecasting still not perfect so storage allows some balancing Forecasts Actual output Source: EON Netz

21. incoteco 21 Irish Wind Capacity Acknowledgement: IWEA Winds concentration in West Will reduce firm capacity Which storage can restore......to total sum of storage capacity delivered

22. incoteco 22 Storage can provide frequency control in milliseconds49.5 49.2 Frequency (Hz) 10 s 60 s 50.0 Time 10 mins 49.8 50.2 Continuous modulation service Frequency fall arrested by primary response 30 s Primary Secondary (to 30 mins) Reserves 50.5 49.0 Lowest planned frequency Start of auto demand disconnection Statutory limit (+/-0.5Hz) Operational limit (+/-0.2Hz) Aknowledgement: Lewis Dale, National Grid

23. incoteco 23 Also black start Distributed storage gives system Regional clusters of instantly available power for re-starting fossil units

24. incoteco 24 Favourable economics depend on......growing cost difference between raw wind power and fossil plants, especially gas...ability of storage to eliminate use of spinning and hot fossil capacity for system balancing –...thus saving mechanical wear, fuel and CO 2...capacity income attributable from ability to deliver instant primary and secondary reserve...raising firm capacity offered from wind –thus saving requirement to purchase new fossil capacity

25. incoteco 25 Danish costs of balancing Jan 2004 thro July 2005, West Denmark 1.Generated 7.9 TWh of wind power 2.ELTRAs balancing costs were 29.6 million 3.ELTRA purchased 1.97 TWh of balancing power ….mostly for wind power 4.Balancing costs were 3.74 per MWh of wind generated 5.Balancing power purchased was 0.25 MWh per MWh wind generated

26. incoteco 26 1.1 GW Wind – 200 MW Storage Capital cost of storage (say) 400 M Unconstrained wind output 3.4 TWh / y –Balanced by 0.85 TWh balancing power –At (say) 80/MWh costing 68 million per year –…provided by battery instead of fossil units –Saving (say) > 312,000 t CO 2 per year from balance power + 300 – 400 MW of instantaneous primary and secondary reserve capacity at no fuel cost + instantaneously available black start capability + 200 MW x (say) 4 hours standby capacity + 300 – 400 MW, 20 minutes pulse capacity Eirgrid to provide estimated values from records

27. incoteco 27 A significant Irish market justifies study of local manufacture......of key components Cell stacks that can be industrially assembled Power Conversion Units (PCS) Thus reducing costs Cell stacks PCS Units

28. incoteco 28 There is an important export market Although the conditions for mass roll-out of distributed storage are best in Ireland...the underlying conditions making it attractive in Ireland are common to the whole of Europe Especially Denmark, Sweden, Scotland, Germany and Spain

29. incoteco 29 European Market Size - Wind Country Germany UK Spain Portugal Sweden Planned Wind Power GW 25 – 35 10 – 20 20 – 30 5 –10 10 - 20 Ireland is (say) 3 GW

30. incoteco 30 Next Steps 1.Agree technical feasibility 2.Agree economic feasibility 3.Agree presentation documents 4.Presentations to, dialogue with ESB Grid Commission for Electricity Regulation SEI IWEA Others 5.Go – No go! 6.If go - accelerate significant demonstration at Meenanilita 7.Parallel studies & large scale roll-out