JaniceLin|ManagingPartnerofStrateGenConsul7ng,DirectorCAEnergyStorageAllianceSeptember29,2009SanDiegoSolarEnergyConference

Integra7ngDistributedSolarandStorageACompellingValueProposi>ontoRealizingaSmarterGrid

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Agenda

1.  StrateGenConsul>ngandCESAOverview

2.  EnergyStorageandCalifornia’sSmartGrid

3.  Ra>onaleforEarlyFocusonDistributedApplica>ons

4.  TheValueProposi>onforIntegra>ngDistributedPVandStorage

5.  EnergyStorageMarketBarriersandPolicyRecommenda>ons

6.  Summary

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StrateGenOverviewStrateGenhelpsbusinessescreatesustainablevalue

throughcleanenergysolu7ons

StrateGenCoreTeam

» Deepindustryknowledgeincleanenergy;corefocusonsolar&storage

» Stronganaly>calandfinancialcapabili>es

» Strategicmanagementexper>se» Productdevelopmentandprojectconstruc>onexperience

» Projectleadershipandmanagement

SmartGridsEnernex

CorporateSustainability

TylerElm

EnergyControlsRonHofmann

MarketResearchAmericanLIVES,Inc.NewHeightsResearch

SolarAdvisoryAndySkumanichLoriMitchell

StructuredFinanceHMHEnergyResources

EnergyEfficiencyConSol

RegulatoryBarkovich&Yap,IncDouglass&Liddell

RogerLevy

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U.S. Department of Energy

StrateGenOverview:OurClients

Ourclientsrepresentawiderangeoforganiza7ons,includingthosecentraltothecleanenergymarket,andthosetryingtoenter

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»  CA‐focusedadvocacygrouprepresen>ngenergystoragestakeholders

»  Focusonstoragecoupledwithrenewableenergyintegratedintothesmartgrid

»  Currentpriori>es/ac>vi>esinclude:–  CPUC

•  SGIPAESimplementa>on•  DG(DER)costbenefitmethodology•  SmartGridOIR

–  Storagelegisla>on:SB412,SB14,AB44–  CECIntegratedEnergyPolicyReportplanning–  CAISOImplementa>onofFERCorder719and

890–  VisionforStorageinCA!

Expandtheroleofstoragetechnologytopromotethegrowthofrenewableenergyandcreateamorestable,secureelectricsystem

OurGoal:

TheCaliforniaEnergyStorageAlliance(CESA)

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EnergyStorageisakeyenablingtechnology

SmartGrid RenewablesIntegra7on

PeakLoadGrowth TransmissionConstraints

“Ourexpecta7onisthatthis[smartgrid]networkwillbe100or1,0007meslargerthantheInternet”‐Cisco,May2009

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Storageisanecessarycomponentofthesmartgrid

Transmission Operator

Distribution Operator

Load Serving Entity

Substation

Other Substations

Residential Customer Multi-

Dwelling Unit

Industrial Customer

Commercial Customer

Distributed Resources

Microgrid / sustainable communities

Energy Storage

Diagram courtesy of PG&E

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Storageisanecessarycomponentofthesmartgrid

Transmission Operator

Distribution Operator

Load Serving Entity

Substation

Other Substations

Residential Customer Multi-

Dwelling Unit

Industrial Customer

Commercial Customer

Distributed Resources

Microgrid / sustainable communities

Energy Storage

Diagram courtesy of PG&E

Substation

Microgrid

Commercial & Industrial

Transmission Scale

Residential

Also~56%lowerNOxemissions

EnergyStorageReducesGHGEmissions

Peak vs. Off-peak CO2 Emission Rate* (Tons/MWh)

Afternoon - Heavy A/C Use Peaker Plants

*Southern California Edison Data

Other times - Very Little A/C Use Better Use of Utility Assets

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PercentCO2/MWhReduc7onShi_ingfromPeaktoOff‐Peak:

SCE:33%reduc7on

PG&E:26%reduc7on

SDG&E:32%reduc7on

E3 Calculator Tons CO2 / MWh

Summer On-Peak

Summer Mid-Peak

Summer Off-Peak

Utility

PG&E 0.6709 0.6068 0.4949

SCE 0.7247 0.6322 0.4862

SDG&E 0.6872 0.5807 0.4705

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EnergyStorageFrameworkforCalifornia

Goal: 25-100 MW deployed 100-500 MW deployed 1,500 MW+ deployed

2009‐2011

PhaseI

Startwithsmallercustomersitedstorage,linkedwithAMI

U>lityownedstoragedemonstra>ons–capitaldeferral

20MWancillaryservicesstoragedemonstra>onswithCAISO

2012‐2015

PhaseII

Couplewithdistributedwholesale(highervalueFiTorPPA)

Demonstratestorageaskeyenablerofsustainablemicrogrids

2015‐2020

PhaseIII

Demonstratelargescaletransmissionlevelstorage(50‐100MW+/site)

Acceleratedistributedstoragedeploymentformul>pleapplica>ons

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Customer Utility System Operator + +

• Reducedenergyanddemandcosts

• Emerg.backup

• Demandresponse

• Improvedreliability

• Integofrenewables• Loadleveling• T&Drelief/deferral• Improvedpowerquality

• Reducedpeak&spinningreserverequirements

• Ancillaryservices• Gridintegra>on• Improvedgridreliability&security

Society +

• Morerenewables

• Feweremissions

• Lowerpowercosts

• Morejobs

Distributedapplica7onsofferthepoten7altocaptureandbundlethegreatestnumberofvaluestreams

Ra7onaleforEarlyFocusonDistributedApplica7ons

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ConceptualOverviewofStorage+PV(1+1=3)

DistributedSolar+Storage Poten7alValueStreams

Baseload

Load&SolarGenera>on

NetLoadisS>llCoincidentwithPeakDemandCharges

StoragetoShikNetPeakLoadtoOffPeakPeriods

»  Chargeduringoff‐peakanddischargeduringpeaktoreducedemandcharges

»  Firmupaddi>onaldemandsavingsfromrenewables

»  Canshareinverter/powercondi>oningequipmentwithsolarorotherrenewables

»  Poten>altoactasdispatchablepowerforu>litydemand‐response

»  Canshikpeakdemand

»  Poten>altoleverageSGIPandFITCforbothtechnologies

»  Poten>altoprovideemergencybackupcapabili>es

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Typical Summer Daily Demand for CA-ISO Region

Demand Curve after Implementation of 3,000 MW solar

0 6 12 18 24 24

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28

30

32

34

36

38

40

42

44

Hour of Day

CA

Gen

erat

ion

(GW

)

Peak - Shaving Impact of 13 GWh storage

Equivalent to 5 kWh Storage for each kW Installed Solar

Source: EPRI

Substation Sited Storage

Customer Sited

DistributedApplica7onsAreU7lity‐Scale

Smalldistributedsystemscanhaveagrid‐scaleimpact

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ValueProposi7on:OurApproach

» Selectaspecificapplica>on/customersite

» Modelthevalueproposi>onofstandalonePVsystemforthesite

» Designahypothe>calenergystoragesystemtobepairedwiththespecificsiteandPVsystem

» Modelthevalueproposi>onofintegratedPVandstorage

» Runkeysensi>vi>estoincen>vesandotherprojectspecifica>ons

WehaveextensivelyanalyzedthedriversofvalueforstoragecoupledwithPV.We’llpresentresultsofthebasecaseandsensi7vi7es.

ThebasecaseforPVOnlyandPV+Storagearepresentedonthefollowingpages

»  Use:customer‐sited350kWrookopPVsystem

»  All‐equityturnkeypurchase»  CAPEX:$5,000/kWDC»  O&M:$15/kW/yr»  Incen>ves:

  30%FITC  $0.22CSIPBI  5YearMACRSDeprecia>on

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ValueProposi7on:PVOnlyBaseCasePVOnlyBaseCase:A350kWPVsystemhasa5.9%IRRfromavoided

energycosts

KeyAssump7ons LoadShapeImpacts

Results

»  AkerTaxIRR:5.9%»  SimplePayback:12years

1)  0.5%annualdegrada>onfactor&0.77deratefactor

Load&PVOutput

»  HighschoolloadprofileinCalifornia»  PVWaps20degfixed>ltinSo.Cal.(1)

»  Use:customer‐sitedstoragesystemcoupledwitha350kWPVsystem

»  All‐equityturnkeypurchase»  BaperySize:100kW,4hdura>on»  BaperyRoundTripACEfficiency:65%»  CAPEX:$475kWh($2,850/kW)»  VariableO&M:$0.075/kWhdischarged(2)»  FixedO&M:$6/kW/yr»  Incen7ves:None

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ValueProposi7on:PV+StorageBaseCasePV+StorageBaseCase:A100kW,4hbaner+350kWPVsystemhasa

7.6%IRRfrompeakloadshi_ingandPVavoidedenergycosts

KeyAssump7ons(1) LoadShapeImpacts

Results

»  AkerTaxIRR:7.6%»  SimplePayback:11years

(1)  SCE TOU8 tariff, CA high school load profile (2)  This cost accounts for replacement costs of battery cells, parasitic loads, and consumables

StorageOp7malSizing

»  AnalyzenetpeakloadwithPVsystem»  SCETOU8PeakPeriod12PM–6PM»  Usestoragetoshaveakernoonpeak»  100kW,4hbapery

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CA’sEnergyStorageRegulatoryMarket

» Cri>calPeakPricing(CPP)»  SelfGenera>onIncen>veProgram(SGIP)

» PermanentLoadShiking(PLS)

»  FederalInvestmentTaxCredit(FITC)

» CECIntegratedEnergyPolicyReport2009updatewillincludestorage» Poten>almediumtermopportuni>es

•  EmergenceofFeedinTariffwithdifferen>alratesforrenewablescoupledwithstorage•  StandardofferforPLS

California’sregulatoryframeworkisrapidlyevolvingtoacceleratedeploymentofstorage,especiallystoragecoupledwithsolar

Source:StrateGen’scurrentregulatoryknowledge

Thesensi>vitytothefirstfourfactorsisexploredonthefollowingpages

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CPP:Cri7calPeakPricingSensi7vity

Non‐CPPvs.CPPImpactstoIRR1 CPPOverview

TheSCETOU8tariffisscheduledtoconverttodefaultcri7calpeakpricing(CPP)inOctober2009

»  CPPwillbethedefaulttariffforSCEcustomerswithpeakdemand>500kWinOctober2009

»  SCEwillroleoutCPPtosmallercustomerclasseswithin1to2years

»  Averageof9events/yr(12/yrmax)duringthesummermonths(with24hadvancedno>fica>on)

»  CPPStructure:  On‐peakenergycharge:$1.37/kWh  Peakdemandchargereducedto$7.26

($19.73w/oCPP)»  Assumestoragedevicecanreacttoandpreparefor24hno>fica>onofCPPevent

1.  SeeAppendixfordetailedmodelingassump>ons

ModeledScenario:Es>matedOctober2009SCETOU8CPPTariff

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SGIP:Evolu7onoftheSGIP

2001 2002 2003 2004 2005 2006 2007 2008

AB2778OnlywindandfuelcellDGtechnologiesqualifyforSGIP

D.01‐03‐073SGIPestablishedtoimplementAB970.Createsfinancialincen>vesfordistributedgenera>ontechnologiesthatprovide“energyconserva>ondemand‐sidemanagementandotherini>a>vesinordertoreducedemandforelectricityandreduceloadduringpeakdemandperiods.”

D.02‐04‐004CPUCOpinionrevealsthat“Legislatureexpressednoguidanceontheextentorscopeofincen>vesfordistributedgenera>on.”

AB2778RemovesallPVincen>vesfromSGIP

Nov2008CPUCconcludesthatAESsystemscannotbeaddedtotheSGIPasstand‐alonetechnology,butdoqualifywhencoupledwitheligiblewindorfuelcells

2009 2010+

SB412RestoresCPUCauthoritytoaddnewtechnologiestoSGIP(awai>ngGov.signature)

SGIPadminimplement2008decision:storageapplica>onsaccepetedMay8,2009

Q1‐Q2An>cipatedimplementa>onofstorageincen>vesforsolarapplica>ons

NOTE:DetailsaboutcurrentSGIPstructureinappendix

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SGIPEnergyStorageIncen7veStructure

SystemSizeIncen7veStructure

RenewableFuelCell

Non‐renewableFuelCell Wind

EnergyStorage

0‐1MW 100% $4.50 $2.50 $1.50 $2.00

1‐2MW 50% $2.25 $1.25 $0.75 $1.00

2‐3MW 25% $1.125 $0.625 $0.375 $0.50

Minimumtechnicalopera7ngparameters:

»  Abilitytobeuseddailyinconcertwithanon‐sitegenera>onresource,ands>llmeetits20‐yearlife>merequirement.

»  Abilitytohandlehundredsofpar>aldischargecycleseachday.»  Abilitytobedischargedforatleastfourhoursofitsratedcapacitytofullycapturepeak

loadreduc>onsinmostu>lityserviceterritories.

»  AbilitytomeetIns>tuteofElectricalandElectronicsEngineers,Inc.interconnec>onstandards.

»  Mustcomplywithalllocalenvironmentalandairqualityrequirements.

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SGIP:SGIPIncen7veSensi7vity

SGIPImpactstoIRR1 SGIPCurrentStatus

SGIPincen7vesforsolar+storageprojectswillbeveryanrac7ve,evenmoreanrac7vethanstandalonestorage

»  SB412(Kehoe,Blakeslee,Skinner)restoresCPUCauthoritytoaddtechnologiesintotheSGIP

»  Storagewillbeexplicitlyadded,forstandaloneapplica>onsaswellascoupledwithPV

»  SB412awaitstheGovernor’ssignature,willbeeffec>veJanuary2010,subjecttoCPUCandSGIPworkinggroupimplementa>on>ming

1.  SeeAppendixfordetailedmodelingassump>ons

ModeledScenario:SGIP@$2,000/kWforStorage

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PLS:ProgramOverview

» PermanentLoadShiking(PLS)isshikingenergyfromone>meperiodtoanotheronapermanentbasis.Itprovidesseveralsystembenefits:  Reduceneedforcapacityinvestments  Reducelikelihoodofshortages(wasdoneinresponseto2006heatwave)  Loweredsystemcosts(fewerpeakingplants)

» Mainapplica>onhasbeentooffsetpeakdemandfromA/C

» TheCPUCcreatedaprogramtoencouragePLSbecausetherewasnoincen>vetodothis(otherthanTOUrates)andPLSwascaughtinbetweenDRandEEprograms,thusgexngfewincen>ves

»  In2007PG&EandSCEimplemented“ShikandSave”programstoimplementthis,withbudgetsof$10Meach  TheseprogramsonlyallowforThermalEnergyStoragesystems  PG&EusesICEEnergyexclusively

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PLS:PLSIncen7veSensi7vity

PLSImpactstoIRR1 PLSCurrentStatus

PLSdoublesstorage’sIRR,buttheCaliforniaprogramsareclosedtofutureRFPsandonlythermalstorageiscurrentlyeligible

»  TheCPUCissuedaFinalDecisionforthe2009‐2011DemandResponseProgramthatendedfurtherRFPsforPLS

»  TheDecisiondid,however,ordertheu>li>esandEnergyDivisionStafftoprovideconstruc>veinputtofuturePLSprograms,includingapossible‘standardoffer’(e.g..Fixed$/kWshiked)

»  BenefitforPV–thisincen>vecouldbecombinedwiththeCSIandpossiblySGIPincen>vesaswell

»  SCE’sNightshikProgramiscurrentlyonlyavailableforthermalstorageandisclosedtonewtechnologies:  $1,110/kW  Basedonanominalra>ng,notpeakra>ngsimilarto

aPTCra>ngforPV21.  SeeAppendixfordetailedmodelingassump>ons2.  100%nominalra>ngusedforthepurposesofthisanalysis

ModeledScenario:SCE’sNightshikProgram@$1,110/kW2

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FITC:FITCIncen7veSensi7vity

FITCImpactstoIRR1 FITCCurrentStatus

StoragemaybeeligiblefortheFITCwhencoupledwithPV.Ifso,itwillraisetheIRR’sapproximately50%higherthantheyaretoday

»  FITCis30%»  Chadbourne&Parkehasindicatedthatstorageis

currentlyeligiblefortheFITCwhenpairedwithrenewables,butonlyifchargedbyrenewablesandnotgridpower

»  Thispar>cularapplica>onworkswellinconjunc>onwithCPPtariffsbecausethebaperycanbechargedontheweekendoff‐peakwithPVtoprepareforCPPevents(outofscopeforthisproject)

»  Inthefuture,theFITCmaybeapplicabletostoragewithoutthesecurrentrestric>ons

»  StrateGen’smodelassumesstoragecanchargeunrestrictedfromgridandnotfromPV

1.  SeeAppendixfordetailedmodelingassump>ons

ModeledScenario:UnrestrictedGridCharging@30%FITC

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Incen7ves:CombiningCPP,SGIP,&FITC

CombinedImpactstoIRR1

Combiningallincen7vevaluestreamshasfavorablefinancialoutcomes,makingStorage+PVaveryanrac7vevalueproposi7on

1.  SeeAppendixfordetailedmodelingassump>ons

Note:Theabilitytocombineandcaptureallofthesevaluestreamsiss>llspecula>vependingclarifica>onofprograms’rules

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MarketBarrierstoFullDeploymentofEnergyStorage

»  Cost/Economics– Manystoragetechnologieshavenotdemonstratedscaleeconomies– Analyzingimpactofstorage,especiallycoupledwithrenewables,isverychallenging

»  Technology– Manysolu>ons,allwithtradeoffs– Firstdemonstra>onsofnewapplica>onsaredifficulttoimplement

»  Regulatory/Policy– Difficulttoaggregatecompletevaluestreamsprovidedbystorage– Percep>onthatu>lity‐scalestorage=largeequipmentonly– Tariffdesigndoesnotreflecttruecostofproducinganddeliveringpoweronpeak– IncompleteCAISOimplementa>onofFERCOrder890/719energystoragetariffforregula>on

– Unclearnetmeteringrulesforstorage+renewablesprojects– Storageisnewenoughthatitisnotyetconsideredinallrelevantaspectsofregula>onandpolicymaking

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Energystorageisdeservingofitsownassetclasscategoryandimmediateenergypolicyfocus

Supply Demand

Transmission/ Distribution

Energy Storage

Goal: System

Optimization

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 Storageisakeyenablerofthesmartgrid Integra>ngstoragewithPVcanboostthevalueproposi>onofPVsignificantly

 Manynewstoragetechnologiesarecommerciallyavailabletoday Significantincen>veprogramsforstorage+PVwillbeinplacesoon Withtheseincen>ves,thevalueproposi>onwillbeveryaprac>ve Nowisthe>metostartdevelopingprojects CESAneedsthePVcommunity’shelptodesigneffec>vepolicyforintegratedPV+storageprojects

 Storageiscri>caltomanykeyenergypolicygoals–itisdeservingofitsownassetclassinCA

Summary

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ForFurtherInforma7on,Contact:

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Incen7ves  “Fullyimplement”SGIPforstorage(needincen>vesforstandalone

andsolarapplica>ons)  Establishincreasedrateofreturnforu>lity‐ownedstorage,similarto

renewablestreatment  Longtermdiscountedfinancingforstorage  Taxincen>vescomparabletosolarandwind(ITCandMACRS)

RD&DFunding  Acceleratedeploymentof“integrated”demonstra>onprojectsunder

variousbusinessmodels  LeveragePIERmatchingfundsforfederalARRAstorage‐related

proposalsinCalifornia  CreateCalifornia‐basedEnergyStorageCenterofExcellenceto

providetechnicalandpolicyleadership

CESAPolicyRecommenda7ons(1of2)

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Goal:Leveragestorageundermul7pleownershipmodelstohelpenabletheSmartGrid,GHGreduc7on,EE,DRandtheRPS

 IncludestorageinDG,DR,EEcostbenefitmethodologies IncreaseFeed‐in‐Tariffcapandpriceforrenewablesfirmedwithstorage

 Requirestorage(customer,3rdpartyand/oru>lityowned)aspartoflongtermprocurementprocess,includingpursuingStandardOffersforDistributedEnergyStorageandpursuingstorageeligibilityfornextPermanentLoadShikingRFP

 Exploreretailtariffdesignthatencouragesloadshiking Implementenergystoragetariffforregula>on(FERCOrders890and719)

 Considerapeakreduc>onstandardforstateagencypowerpurchases Clarifynetmeteringrulesforrenewableenergyprojectswithstorage

CESAPolicyRecommenda7ons(2of2)

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“Enablingtechnologiessuchasfuelswitchingin‘smart’appliances,dispatch‐ableloadfromplug‐inhybridorotherelectricvehicles,orsta7onaryenergystoragewouldberequiredtoenableveryhighlevelsofPVcontribu7on(>20%)totheelectricpowersystem”. ‐NRELDenholm&Margolis,April2006

“WhenPVpenetra7onreachessufficientlyhighlevels(e.g.,5to20%oftotalgenera7on),theinterminentnatureofPVcanbegintohaveno7ceable,nega7veeffectsontheen7regrid”[requiringstorage] ‐USDOE,SEGIS‐ES,July2008

“Storagewillneedtobepartofourporwolioifgoingto15to20percentwindatana7onallevel,otherwiseitwon’tbeefficientatalowerlevelanditwon’tgetuswherewewanttogoenvironmentally” ‐ElectricPowerResearchInsNtute,March2009

BenefitsofStorage–RenewableIntegra7on

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CA’sRPSimplementa7onwillincreasetheneedforregula7onandramping

Ancillaryservicescanbeprovidedtodayat20MWscale,andfromsystemsassmallas1MWonthecustomersideofthemeter

•  Increased wind penetration creates need for greater regulation capacity and faster regulation ramping capability

•  Nov ‘07 CAISO report identifies significant additional regulation requirements with 20% renewables (about 10% wind penetration)

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1.  StrateGen’sApproachtoEnergyStorageModeling

2.  PrimaryDriversofValue

3.  BaseCaseResults

4.  KeySensi>vi>es

5.  ValueProposi>onSummaryFindings

ValueProposi7on–Framework

Wewillnowexaminetheotherstorage‐specificdriverstocustomer‐sitedenergystoragesystemspairedwithPV

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Modelingthevalueproposi7onofstorageischallenging.StrateGen’sapproach:

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ValueProposi7on–KeyDrivers

CustomerSpecific TechnologySpecific

StrateGenhasextensivelyanalyzedthedriversofvalueforstorage.We’llpresentresultsofthebasecaseandsensi7vi7es.

CAPEX»  Fullyloadedcostofstoragesystemincludingbaperies,controls,inverters,BOS,building,etc.

OPEX»  FixedandVariableO&M»  Considerrunningthebaperyeveryweekdayonpeak

»  Includesreplacementcostsandconsumables

RoundTripEfficiency»  ACtoACefficiencylossesofcharginganddischarging

BaselineLoad»  Requirespeakyloadscoincidentwithu>litypeakstomaximizestoragevalue

Tariff»  Requireshighpeakdemandchargesor>me‐of‐usetariffswithlargespreadsbetweenoff‐peakandon‐peakprices

»  Cri>calPeakPricingisanimprovementforstorage

»  Use:customer‐sitedstoragesystemcoupledwitha350kWPVsystem

»  All‐equityturnkeypurchase»  BaperySize:100kW,4hdura>on»  BaperyRoundTripACEfficiency:65%»  CAPEX:$475kWh($2,850/kW)»  VariableO&M:$0.075/kWhdischarged(2)»  FixedO&M:$6/kW/yr»  Incen>ves:None

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ValueProposi7on–BaseCaseBaseCase:A100kW,4hbaneryhasa7.6%IRRfrompeakloadshi_ing

whenpairedwitha350kWPVsystem

KeyAssump7ons(1) LoadShapeImpacts

Results

»  AkerTaxIRR:7.6%»  SimplePayback:11years

(1)  SCE TOU8 tariff, CA high school load profile (2)  This cost accounts for replacement costs of battery cells, parasitic loads, and consumables

StorageOp7malSizing

»  AnalyzenetpeakloadwithPVsystem»  SCETOU8PeakPeriod12PM–6PM»  Usestoragetoshaveakernoonpeak»  100kW,4hbapery

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CustomerSpecificSensi7vi7es

CustomerLoad ApplicableTariff

Threehypothe7calloadshapesandtariffswereselectedtodeterminesensi7vityofcustomerspecificfactors

»  SCETOU8(Secondary):–  $15.41/kWSummerPeakDemandCharge–  $0.1077/kWhSummerPeakEnergyCharge–  4MonthSummer–  12to6PMSummerPeak

»  SCETOU8–CPP(Secondary):–  SamestructureasTOU8,butwith12Cri>cal

PeakDaysduringsummerpeakhoursat$1.36229/kWh

–  PeakDemandChargecreditof$12.47/kWtooffsetCPPevents

»  PG&EE‐19(Secondary):–  $13.51/kWSummerPeakDemandCharge–  $0.1555/kWhSummerPeakEnergyCharge–  6MonthSummer–  12to6PMSummerPeak

AugustDailyLoadProfile

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ValueProposi7on–CustomerSpecificDrivers

CustomerLoad ApplicableTariff

Aproject’sloadshapeandtariffwillhaveasignificantimpactonend‐customerreturns

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ValueProposi7on–StorageTechnologyDrivers

CAPEX ACRoundTripEfficiency

CAPEXhasasignificantimpactonend‐customerreturns.RoundTripEfficiencyistypicallylesscri7cal

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ValueProposi7on–StorageTechnologyDrivers

OPEX Methodology

Aproject’sOPEXwillhaveanimpactonend‐customerreturnsandistheleasttransparentvariablefordistributedapplica7ons

»  OPEXhastwocomponents:  Fixedcoststhatareincurredwhetherthe

baperyiscycledornot  Variablecostsfromcyclingthebapery

»  ThisgraphfocusesonlyonthevariablecostsassociatedwithkWhhoursdischarged

»  Thevariablecostsincludeconsumablessuchaswater,cellstackreplacement,parasi>cloads,etc.

  Variablecostsdonotincludeenergyconsumedorlostduringcharge/discharge(accountedforinavoidedenergycosts)

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SummaryValueProposi7onAnalysisFindings

EconomicDrivers Realis7cScenario

Retailapplica7onscanprovideanrac7vevalueproposi7ons

»  KeyAssump7ons– 85%RTE– $475/kWhCAPEX– $2/WSGIP– $0.0500/kWhdischargedOPEX– SCETOU8CPP– Highschoolloadprofile–  IncludesPVintegra>on

»  ResultsofStorage+PVSystem– 11.9%IRR– 6YrSimplePayback

»  Topeconomicdrivers– CAPEX– Loadshape– Tariff–  Incen>ves

»  Addi7onaleconomicdrivers(notquan7fied)– Abilitytoprovideemergencybackup/UPScapability

– Abilitytocomplywithu>litydemandresponseini>a>ves

– Abilitytopar>cipateinmoretariffopportuni>es