Xtreme Power – Battery Based Energy Storage in Alaska Alaska Energy Storage Workshop June 2012 Xtreme Power, Inc. Company Overview Xtreme Power engineers, designs, and integrates power management and energy storage solutions Founded in 2004 in Austin, Texas; ~ 270 employees Established Beijing Office Projects installed, contracted, and in final negotiations: >70 MVA, across 12 projects US-based operations in Austin, TX and OK, International presence Utility industry leadership on Board of Directors– Pat Wood, Former FERC Chairman and Foster Duncan, Former EVP/CFO of Cinergy Over $70 MM in funding: SAIL Capital, Bessemer VP, Dow Chemical, Fluor, Dominion Power, BP, POSCO, Skylake Incuvest 2 The Dynamic Power Resource® (DPR®) Key Product Features Scalable solutions: .50 MVA to 500 MVA Available durations: 5, 15, 30 min and 1, 2, or 4 h Multi-Storage Architecture Multiple enclosure options Fully integrated turnkey product High round trip efficiency Accurate, real time response in < 3 cycles Re-deployable Intelligent Control Seamless Integration Proven Performance 3 Truly Innovative Solutions The DPR is an Integrated, Intelligent, Power Management Solution that is Configurable, Modular and Scalable. Control System System Integration Programmable, Flexible, and Modular High Reliability & Cyber Security Optimized System Performance Web Based Real Time Monitoring Real-time Response Power Electronics Battery Energy Storage Fully Synchronized BMS & PCS Control Real and Reactive Power Supply Fast Response Seamlessly Interface with the Grid Low Auxiliary Consumption Long or Short Duration Factory Tested and Field-Ready Power Precision within 10 kW Multi-Storage Platform Capabilities Operate 100 Modules as Single System Overload to 150% of Nameplate MVA Low lifecycle cost Safe and Reliable 4 XPOC and Test Bay 24/7 Operations Center (XPOC) ― Monitors all installations in the field in real time ― Collects and stores data to view graphical representations of historical and live operational data ― Remote access via secure Virtual Private Network ― Option to access through Tablets and Smart Phones ― Redundant Safety Notification Alerts Test Bay ― 12 MVA in-house test facility ― Equipped for Factory Acceptance Tests ― Expandable to 20MVA ― Ability to perform full 4 quadrant PQ operation ― Verification of control modes such as Ramp Control, Frequency Regulation, Voltage Regulation, Power Leveling, etc. 5 Proven Experience As of March 31, 2012 – Xtreme Power’s experience includes: 77 > 143,000 245 > 2.5 GWh Megawatts Installed by End of 2012 Hours of Integrated Module Operation Gigabytes of Recorded Data Energy Charged and Discharged Leading the Market with Operational Experience 6 A Growing Portfolio of Deployed Projects Project Customer Application South Pole Telescope (SPT) University of Chicago Microgrid Kahuku First Wind Lanai Castle & Cook Ford Michigan Assembly Plant Ford, DTE Energy KIUC Kaua’i Island Utility Cooperative Nova Xcel Energy Total Operating 6 Customers KWP II (Maui) First Wind Fosters Classified Ture Classified KIUC II & III Kaua’i Island Utility Cooperative Notrees Renewable Integration Renewable Integration Demand Management Grid Support Renewable Integration 4 Applications Renewable Integration Microgrid Renewable Integration Power Rating / Duration Deployed Projects COD Services 0.5 MVA / 5 min. 4Q 2006 Peak-Shaving 15.0 MVA/ 15 min 1Q 2011 Ramp Control, Curtailment Mitigation 1.1 MVA / 15 min 2Q 2011 Ramp Control, Frequency Response 0.75 MVA / 60 min 2Q 2011 Load-Leveling, Ramp Control 1.5 MVA / 15 min 3Q 2011 Frequency Response, VAR Support 1.5 MVA / 15 min 4Q 2011 ~20 MW 6 Projects Near-Term Projects Ramp Control, Firming & Shaping, Frequency Response, VAR Support 7 Services 10.0 MVA / 45 min 2Q 2012 3.0 MVA / 15 min 2Q 2012 Ramp Control, Responsive Reserves, Grid Services Uninterruptible Power Source 1.5 MVA/ 15 minutes 2Q 2012 Ramp Control & VAR Support Grid Support 3.0 MVA / 15 min 3Q 2012 Ramp Control Duke Energy Merchant Services 36.0 MVA / 15 min 4Q 2012 Bear Kodiak Electric Grid Support 3 MVA/ 15 min 4Q 2012 Total Near-Term 3 New Customers 4 Applications 57 MW 5 Projects Responsive Reserves, Regulation Services, Grid Services Frequency response, Responsive Reserves, Voltage Support 9 Customers, 5 Applications & 10 Services To Date in Deployed Projects ~ 77 MVA, 154 MW Dynamic Power Range in Deployed Projects 7 South Pole Telescope 5 Years Experience Location South Pole, Antarctica Segment Microgrid DPR 0.5 MVA, 5 minute duration Dynamic Power 1 MW COD Q4 2006 Services Peak-shaving, Load-leveling In collaboration with several centers of higher education, the University of Chicago chose the Xtreme Power DPR to power the 200-ton South Pole Telescope’s scan cycles without infringing on the station’s life support system. The Telescope requires up to 259,200 cycles/month. 8 Kodiak Electric Cooperative Expanding Xtreme Power’s Microgrid Experience Location Kodiak, AK Segment Microgrid DPR 3.0 MVA, 15 minute duration Dynamic Power 6.0 MW COD Q4 2012 Services Ramp Control, Frequency and Voltage Response Kodiak Electric will employ the 3.0 MW DPR to smooth the output of the Pillar Mountain Wind Project, so that the utility can utilize the Terror Lake Hydro facility to manage grid stability and frequency regulation. Additionally, the utilization of the DPR will reduce diesel fuel consumption by allowing a higher penetration of renewable assets. 9 Microgrid Operators Challenges Expensive Diesel Operating Costs ― Can be >$4/gal in remote locations ― High cost and risk of fuel delivery ― Few alternatives available Unstable and Unsecure Grid ― Weak electrical distribution system can lead to loss of critical loads ― Poor power quality may require purchase of additional electrical equipment Actual Wind Output Without DPR ― Insufficient response time for diesel generators Inefficient Use of Grid Resources ― Generators operate at reduced output for reliability ― Common curtailment and limited integration of renewable generation ― Constant cycling of units leads to more frequent O&M and greater fuel consumption 10 Microgrid Operators: Case Study Microgrid Challenge Example Case Study Scenario Outline Microgrid Peak Load 5 MW ― 2 MW of solar curtailed down to 1.2 MW Diesel Generators 3 x 2 MW each ― 4.5 MW of wind curtailed down to 2.5 MW Solar Farm Nameplate Capacity 2 MW ― Requires more generation from diesel Wind Farm Capacity 4.5 MW Diesel Fuel Cost $1.25/liter Grid Instability Limits Renewable Energy Delivered Inefficient Diesel Operation Consumes More Fuel ― Contingency requirements force generators to operate at low levels Solution 1: Utilize Diesel Generators to Balance Grid ― Average loading of generators = ~52% ― Spinning reserves cause additional curtailment of renewables 11 Microgrid Operators: Case Study Example Case Study Scenario Outline Microgrid Solution Microgrid Peak Load 5 MW ― Wind and solar farms operate at full nameplate Diesel Generators 3 x 2 MW each ― DPR balances intermittency of renewables and acts as reserves without adding generation Solar Farm Nameplate Capacity 2 MW Wind Farm Capacity 4.5 MW Diesel Fuel Cost $1.25/liter DPR Maximizes Renewable Energy Delivered Efficient Asset Utilization Yields High Cost Saving ― Average loading of generators = ~70% Solution 2: Utilize 2 MVA/1 h DPR for Grid Balancing and Reserves Diesel Fuel Savings Summary Fuel Consumed without DPR 90,000 liters/week Fuel Consumed with DPR 75,000 liters/week Estimated Annual Fuel Savings 780,000 liters/year Cost of Diesel Fuel Total Annual Savings Decrease Fuel Consumed by > 17% $1.25 /liter $975,000 /year 12 Microgrid Operators Xtreme Power Solutions Increase Reliability and Reduce Diesel Consumption ― Allow diesels to operate in optimal range to reduce fuel consumption ― Reduce need for fuel shipments ― Support energy independence Correct Grid Imbalances ― Act as back up power source to keep critical loads online ― Maintain high power quality with VAR support Actual Wind Output Without DPR ― Respond 40-50 times faster than diesel generators Maximize Productivity of Grid Assets ― Reduce strain on the electrical distribution system caused by intermittency ― Decrease diesel consumption through less curtailment of renewable resources ― Decrease cycling to reduce O&M and fuel consumption 13 Renewable Developers & Operators Challenges Intermittent supply ― Variable, inconsistent production decreases market value ― Difficult to maintain sufficient power quality ― May require additional balancing services Curtailed Production ― Frequent curtailment reduces annual production ― Unable to capitalize on PPA without guarantees ― Prolonged return on investment Actual DPR ActualWind WindOutput OutputWithout Without DPR Uncorrelated Generation & Demand ― Inconsistent generation profile vs. consistent load profile ― Peak output does not match peak load ― Unable to capture full market value Source: Energy Storage – A Cheaper, Faster, & Cleaner Alternative to Conventional Frequency Regulation (CESA) 14 Renewable Developers & Operators: Case Study Renewable Developer Challenge Example Case Study Scenario Outline Solar farm Capacity 3 MW ― Uncurtailed ramp rate > 3x limit (±1.9 MW/min) Ramp Rate Requirement ± 500 kW/min ― Must curtail to 950 kW to meet requirement PPA Compliance Requirement 99% Solar PPA Price $135/MWh Solution 1: Limit Maximum Capacity 950 kW Ramp Rate Limit Requires Curtailment Curtailment Decreases Energy Delivered ― Capacity factor @ nameplate 3MW = 19.3% ― Capacity factor @ limited 950 kW = 11.5% ― Annual production decreased by over 40% Curtailment Ramp Rate Setpoint (MW) (kW/min) 3.00 1900 2.50 1700 1.50 1000 1.25 800 1.00 550 0.95 500 0.75 400 Capacity Factor 19.34% 19.29% 15.38% 13.77% 11.91% 11.48% 9.59% 15 Renewable Developers & Operators: Case Study Renewable Developer Solution Example Case Study Scenario Outline Solar farm Capacity 3 MW ― DPR able to maintain ramp rate requirement Ramp Rate Requirement 500 kW/min ― No curtailment required to meet PPA PPA Compliance Requirement 99% Solar PPA Price $135/MWh Solution 2: DPR Size 1.5 MVA/15 min duration 1.5 MW DPR Reduces Intermittency Increase Energy Delivered & Project Revenues ― Maintain capacity factor of 19.3% ― Capture incremental Ancillary Service revenue ― Increase Project Revenues by > 95% Energy Storage Value Summary Project Revenue without DPR Energy @ 11.5% NCF 3,022 MWh Total Annual Revenue $ 407,997 /yr Project Revenue with DPR Energy @ 19.3% NCF Energy Revenue $ A/S Revenue* $ Total Annual Revenue $ 5,072 MWh 684,725 /yr 123,188 /yr 807,913 /yr Annual Revenue Boost $ 399,916 /yr *Assumes in Reg Market 10 h/day at price of $25/MW 16 Renewable Developers & Operators Xtreme Power Solutions Smooth Generation Variability ― Reduce intermittency, Avoid penalties ― Improve power quality ― Provide grid balancing services Optimize Asset Value ― Mitigate Curtailment, Increase energy delivered ― Enable restructured Power Purchase Agreements ― Boost revenue with additional service offerings Reshape Output to Meet Demand ― Mitigate forecast error market penalties Actual Wind Output With DPR® ― Shape power to capture peak pricing opportunities ― Firm power to access premium pricing 17 Utilities, Cooperatives & Municipalities Challenges Grid Stability & Power Quality ― Growth in renewables drives need for additional balancing services ― Inefficient grid balancing service offerings increases operating costs ― Power Quality issues must be solved locally Rigid and Costly T&D Congestion Solutions ― Transmission congestion can lead to high wholesale prices Actual Wind Output Without DPR ― T&D infrastructure is sized to meet a future peak demand, but rarely used at that level ― Congestion requires capital intensive T&D infrastructure upgrades Complex T&D Project Planning & Logistics ― NIMBY area restraints ― Prolonged lead times increase project risks ― Onerous permitting process increases costs ― Strict siting limitations reduces solution efficiency 18 Utilities, Cooperatives & Municipalities Xtreme Power Solutions Improve Grid Stability & Power Quality ― Smooth intermittency or firm and shape power delivered from renewable resources ― Balance grid fluctuations accurately and efficiently without adding unneeded energy ― Siting flexibility delivers power quality solutions directly to problem source Enable Flexible, Economic Congestion Solutions ― Enhance reliability and decrease congestion ― Increase load carrying capacity of the transmission system Actual Wind Output Without DPR ― Provide incremental capacity to defer an oversized T&D upgrade investment Expedite Turnkey Project Execution ― Integrate all key components into a utility-scale system and shorten project lead times ― Operate with existing/planned infrastructure ― Site anywhere with non-hazmat technology 19 Tom Noelle Vice President, Business Development tnoelle@xtremepower.com 5513 Silentbrook Rolling Meadows, IL 60008 847-348-7453 20