1. Conventional and Pumped Hydro = STRATEGIC FLEXIBILITY Richard R. Miller, P.E. HDR, Inc. ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Quebec Electrical Industry, March 20, 2013

2. Grid-Scale Energy Storage Solutions Grid-scale storage enables development of double-digit levels of wind penetration Europe integrates variable energy with big transmission, conventional hydro, and carbon-free pumped storage Changing US market for system reserves and grid reliability services

3. Ancillary Services: Demonstrating Hydro’s Flexible Generation Flexible Hydropower Is a Proven and Widespread Technology!

4. Denmark & Grid Reliability 30% wind penetration in the generation mix No native load balancing Balancing services provided via interconnects: - Strong interconnections with Norway, Sweden, and Germany - Utilizes energy storage and flexible energy options in neighboring balancing areas - Excess wind is exported and stored in Norwegian hydropower reservoirs

5. Power Balance in Denmark 2008 Source: Energinet.dk Germany Norway Sweden

6. Western Denmark Wind Output and Net Electricity Flows

7. Source: Manitoba Hydro

8. Pumped Storage Activity in the United States Proposed/Preliminary Permits for Pumped Storage

9. Contact Info RICK MILLER, P.E. SENIOR VP AND NATIONAL DIRECTOR RENEWABLE ENERGY SERVICES HDR Engineering, Inc. 704.248.3686 rick.miller@hdrinc.com

10. BACKUP SLIDES

11. What Can Be Done to Address Challenges? Markets: Energy Storage Model (Similar to Gas Storage Model) 200 MW 1,000 MW PSH 1,000 MW PSH Reservation Charge/Customer (sold in 100-200+/- MW increments) Electricity Injection Fee: ~$5/MWh 1 Withdrawal Fee: ~$5/MWh 1 LOAD, DSM, or Reg. Down $10/MW 1 GENERATION, or Reg. Up $15/MW 1 Transmission Services: Fast Response, Voltage Support, Regulation (AS provided while still providing storage services)

12. Coordination with Neighbor TSO (REE, Spain)

13. The Portuguese Goals for Renewables (1/2)