1. PJM©2011 From Pilot to Production: Integrating New Storage Products in PJM Scott Baker PJM Interconnection ERCOT ETWG Storage Workshop December 2, 2011

2. PJM©2011 2 ☼ NJ: 22.5% by 2021 ☼ MD: 20% by 2022 ☼ DE: 25% by 2026 ☼ DC: 20% by 2020 ☼ PA: 18%** by 2020 ☼ IL: 25% by 2025 ☼ OH: 25%** by 2025 ☼ NC: 12.5% by 2021 (IOUs) MI: 10% + 1,100 MW by 2015 ☼ VA: 15% by 2025 WV: 25%** by 2025 ☼ Minimum solar requirement ** Includes separate tier of “alternative” energy resources DSIRE: www.dsireusa.org January 2011www.dsireusa.org State RPS Targets: State Renewable Portfolio Standards (RPS) require suppliers to utilize wind and other renewable resources to serve an increasing percentage of total demand. State Goal State RPS PJM States with RPS

3. PJM©2011 3 www.pjm.com

4. PJM©2011 4 www.pjm.com

5. PJM©2011 5 www.pjm.com

6. PJM©2011 6 July 21, 2011 – PJM New All-Time Peak 300 MW on the system at peak.

7. PJM©2011 7 Grid Storage Types www.pjm.com Pumped Hydro Stationary Battery Flywheels Compressed Air

8. PJM©2011 8 PJM Advanced Technology Resources Program www.pjm.com With diversified technologies participating in the program, it has become an open window to demonstrate PJM’s continuous efforts and great achievements in applying new solutions to grid challenges

9. PJM©2011 9 www.pjm.com

10. PJM©2011 10 www.pjm.com

11. PJM©2011 11 www.pjm.com

12. PJM©2011 12 www.pjm.com

13. PJM©2011 13 www.pjm.com 3 consecutive tests of 75% or better

14. PJM©2011 14 Grid-Scale Energy Storage Pilot – 1 MW Battery www.pjm.com Operational Details Lithium-ion nano titanate (Altairnano) Power 1 MW, Energy 250 kWh Full capacity duration, 15 minutes Efficiency, 90% round trip (AC-AC) Usable Charge Range, 5%-99%

15. PJM©2011 15 Regulation: Accuracy Matters… A fossil plant following a regulation command signal Energy Storage accurately following a regulation command signal Energy Storage Output Regulation Signal www.pjm.com

16. PJM©2011 16 Operational Performance: Source: © 2010 The AES Corporation, All rights reserved.

17. PJM©2011 17 Key Learning from Energy Storage Pilot Storage resources can provide faster response and more accurate tracking to AGC signal PJM’s Regulation signal bias ‘down’ –Reduces number of hours storage products can participate in the market –Batteries get ‘full up’ Split Regulation signal –‘Traditional’ – tracks ACE –‘Dynamic’ – ACE component, but tightly correlated to frequency deviation

18. PJM©2011 18 Questions