Energy Storage The Key Enabler for the Future

Energy Storage, The Key Enabler for the Future Smarter Grid Dale Bradshaw CEO Electrivation dtbradshaw@electrivation. com 423 -238 -4052

• • Why is Energy Storage Critical to Improving Affordability and Reliability and make wind Shift wind and solar to meet the peak and solar dispatchable. Provide demand reduction or avoid need for new capacity Buy low cost electricity at night and run during high cost daily peaks Provide for fast (<4 cycle) backup power for hours to improve system reliability Delay or avoid the need to build new transmission or distribution lines in high cost areas Provide frequency regulation and spinning reserve Reduce carbon emissions Reduce consumption of oil and natural gas

Month Typical Wind Farm Output Pattern Hour

Battery Energy Storage Systems History Review Golden Valley Electric Association Ni. Cad – 27 MW BESS for 15 minutes for reliability improvement (3 to 82 outages covered each year)

Advanced Battery Breakthroughs • Long Life (defined by number of charge and discharge cycles is needed) – Cycle lifetime of 5, 000 to 10, 000 cycle is now possible – Charging and discharging daily implies 300 or more cycles a year, 9, 000 cycles in 30 years • Costs have decreased by 30% to 50% – $2, 000/k. W now for 7 hours of storage instead of $3, 500/k. W • Large battery complexes are being built in >1 Mw sizes • Acceptable efficiency of 70% or more

Lithium Ion (Li-ion) Battery Attributes Attribute Rating Capital cost Poor - $800/k. W-hr to $3, 000/k. W-hr Round trip efficiency Excellent – 90 to 95% Lifetime in Cycle Life Excellent (7, 000 to 16, 000 DOD cycles and 28, 000 to 250, 000 partial discharge cycles ) Altair. Nano Li Ti 1 MW for 15 minutes at 750 to 1050 V

Vanadium Redox Battery (VRB) Attributes-Prudent Energy Attribute Rating Capital cost Fair - $500/k. W-hr to $800/k. W-hr Round trip efficiency Fair – 70 to 75% Lifetime in Cycle Life Excellent (10, 000 cycles? )

NAS battery Attributes and Ratings S&C Electric and NGK Attribute Rating Capital cost Fair - $400/k. W-hr to $500/k. W-h Round trip efficiency Good– 80% to 90% Lifetime in Cycle Life Good (4, 000 to 5, 000 cycles)

Sodium Sulfur (NAS) Construction Cells Modules

Zn. Br Battery Attributes Premium Power Corporation & ZBB Attribute Rating Capital cost Excellent - $250/k. W-hr Round trip efficiency Fair– 70% to 75% Lifetime in Cycle Life Excellent (>10, 000 cycles)

Basic Zinc-Flow Technology (Plating and de-plating of Zinc)

Zinc-Flow Battery Tower Module

Premium Power Corporation Trans. Flow 2050 -7 Zinc Bromide battery on a trailer 500 k. W, 7. 4 hours and 3. 8 MW-Hr & ~$1 million

Why Interest in the Premium Power Corporation Zinc Bromide Battery? • Lifetime of more than 10, 000 cycles of deep charge and discharge • Lowest cost battery of all the advanced options based on CRN due diligence report • Potentially very low environmental impacts • PPC Zn. Br is UL, FCC, and NFPA certified • PPC has recently completed the production of its first Trans. Flow 2050 -5 (500 k. W, 2. 8 MWh, 5. 6 hours) • PPC has production capacity to meet the needs of the participating co-ops in this proposal. • The PPC Zn. Br batteries are made in the U. S. • PPC is well capitalized. • PPC Zn. Br has the potential for fast frequency regulation and nearly unlimited cycle life.

NRECA CRN projects • Confirmed addition of a TF-2050 -7 for Kotzebue Electric Association (KEA) in Kotzebue Alaska to provide: – – – – Time shift wind to daily peak Frequency regulation and spinning reserve Arbitrage Reduce diesel generator start-ups and O&M Emergency back-up Blackstart Improved fossil plant efficiency • Other possible future projects in Kauai, South Carolina, and Floriday

Possible Value Streams for Energy Storage (Potential Net Present Values) • Capacity credit or demand charge reduction ($500/k. W to $2500/k. W) • Arbitrage value (Buy low and sell high ranging from $900/k. W to $1500/k. W) – – Firming and Shifting Renewables (wind and solar) Improved thermal plant efficiency Reduce CO 2 emissions from thermal plants Improve Thermal Plant Reliability • T&D capital asset deferral ($200/k. W to $1300/k. W) – Avoid or delay need for second transformer or transformer bank – Reduced congestion and line losses • Frequency regulation ($1600/k. W to $4000/k. W) • Dynamic VAr Support ($100/k. W) • Improved service reliability

Range of Values for 6 hours of Energy Storage assuming 2% real discount rate low gas of $3/MBtu, wind energy off-peak, 70% gas on peak, etc. Zn. Br price for 7. 4 hours is about $2500/k. W installed

Future Trends with Advanced Batteries • Costs in $/k. W-hr will drop (mass production) as the value for installing batteries will increase (increased costs for natural gas and oil, for carbon emissions, new capacity, etc. ) • Commercial feasibility of advanced batteries will be established in 2010 with large orders possible by 2011 • Example of expansion (PPC Zn. Br batteries): – 100 MW-hr capacity in 2008 – 400 MW-hr capacity in 2009 – 1500 MW-hr to 4000 MW-hr in 2010 • G&T’s with distribution coops should examine/evaluate where application of advanced batteries can add value and reduce cost of electricity and rates. • Advanced batteries compete with CAES when natural gas price exceeds $8/MBtu with CAES at $1, 000/k. W or $3/MBtu at $2, 000/k. W assuming no carbon tax. Currently significant uncertainty in CAES capital cost and natural gas prices

Residential Scale via Red. Flow’s Zn. Br at 5 and 10 k. W