Emerging Energy Storage Business Models INTERSOLAR & EES SUMMIT - PowerPoint PPT Presentation

Emerging Energy Storage Business Models INTERSOLAR & EES SUMMIT USA EAST APRIL 4, 2018 | NEW YORK Powered by: EDF Renewables Distributed Solutions

EDF = ELECTRICITÉ DE FRANCE S.A. World’s largest Renewable Energy Financial Strength Electricity electricity company Powerhouse Production US$88 Bn Sales  US$33 B market capitalization  37 million Customers 87% CO2 free generation  134 GW installed  A3 credit rating by Moody’s  160,000 Employees  619 TWh generation  Operating in 21 countries 3 business Segments Generation Installed capacity 8 % Nuclear power, gas Generation 14 % 21 % and coal, renewables 134 619 Transmission Networks Distribution TWh GW 54 % 25 % 78 % Customer service Customers Trading Nuclear power Renewables Gas and coal Listed on the Paris stock exchange (Euronext). The Group is 84% owned by French Government.

Global Experience - Including Energy Storage • Experts in electricity markets • 330MW/824MWh of storage in operations • Financing for battery storage projects • Battery Storage operations for maximum revenue opportunities • Project Development expertise • Offices throughout North America and Mexico 3 EDF RE Confidential

US$33 billion market cap A+ Investment grade credit 4 EDF RE Confidential

Storage Costs Following Similar Pattern as Solar St Storage Cos Cost t an and Volu olume Trend • Cost inflection point reached in 2012 Annual Battery Production (GWh) • Inflection point to high growth expected in the next few years Battery Cost ($/kWh) Source: Goldie- Scot, L.. (2014) “European End - User Storage: A Battery In Every Home?”, BNEF.

The Energy Storage Opportunity

California Leading the Way Peak Shaving + SGIP = Huge market Opportunity 5.000 Old Peak 4.500 Demand 4.000 New Peak 3.500 Load (kW) Demand 3.000 2.500 2.000 1.500 1.000 500 Off Peak 0 0:00 0:45 1:30 2:15 3:00 3:45 4:30 5:15 6:00 6:45 7:30 8:15 9:00 9:45 10:30 11:15 12:00 12:45 13:30 14:15 15:00 15:45 16:30 17:15 18:00 18:45 19:30 20:15 21:00 21:45 22:30 23:15 original with storage

Duck Curve - California 8

Duckling Curves - NJ customers NJ Customer 1 NJ Customer 2 NJ Customer 4 NJ Customer 3 9

Solar & Storage Case Main Storage Use Cases • Demand Charge Reduction • Capacity Reduction (I-Cap) • Transmission Reduction (I-Trans) • Demand Response • Frequency Regulation • Arbitrage 4/11/2018 EDF RE Confidential 10

Unpacking Commodity Energy Components in Deregulated Markets 90 FORECASTED� PEAK� DAY� � Cost� components 800� 80 tax Energy 33.83 700� 70 Capacity 16.89 RPS 600� 60 Ancillaries 1.29 Discharge� Losses during� 500� $/MWh 50 Load� (kw)� a� four-hour� Transmission� 18.72 window� to� Transmission 400� 40 decrease� the� Losses 0.88 peak 300� 30 Ancillaries RPS 6.87 200� 20 tax 5.2 Capacity 100� 10 83.68 Energy 0� 0 0:00� 4:00� 8:00� 12:00� 16:00� 20:00� With� Ba ery� Without� Ba ery� 11

PJM Capacity Obligation (I-Cap) The PJM capacity market ensures long-term reliability by FORECASTED PEAK DAY 800 procuring the appropriate amount of power supply needed to meet peak demand 700 600 This cost is split between consumers according to their load Discharge coincident with PJM’s five highest summer peaks. This is the during 500 Load (kw) a four-hour customer’s peak load contribution (PLC), and is built into the window to 400 $/kWh rate customers pay for its energy decrease the peak 300 EDF RE can forecast these annual peaks and manage flexible 200 load and storage systems to discharge during these five peaks, reducing the capacity portion of the bill 100 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0:00 4:00 8:00 12:00 16:00 20:00 With Battery Without Battery 2017 Base period sets PLC 2018 Program Year -> 2019 -> Program Year 4/11/2018 EDF RE Confidential 12

PSE&G Transmission Obligation (I-Trans) FORECASTED PEAK DAY The cost of upgrading the transmission network is borne by 800 PSE&G and passed on to its customers 700 The transmission load for each customer is equal to the 600 average of its hourly load at the time of PSE&G’s five highest Discharge hourly loads during the prior summer, multiplied by a loss during 500 Load (kw) a four-hour expansion factor and a transmission scale factor window to 400 decrease the peak The transmission cost is built into the $/kWh rate customers 300 pay for its energy 200 EDF RE can forecast these annual peaks and manage storage 100 systems and flexible load to discharge during the peak, 0 0:00 4:00 8:00 12:00 16:00 20:00 reducing the transmission portion of the bill With Battery Without Battery 4/11/2018 13 EDF RE Confidential

Storage: 2 MW – 8 MWh Year 1 Revenues Lifetime Revenues & Savings Revenue Stream Revenue Demand Charge Reduction $76,988 Regulation (Reg D) $621,503 Capacity Charge $1,638,171 Transmission Charge $2,139,315 Demand Response $1,418,423 Total Lifetime Savings $5,894,400 Project Specifications • Commercial operation date: 12/1/2018 • Project life: 11.5 years • Battery size: 2000 kW – 8000 kWh 4/11/2018 EDF RE Confidential 14

Summary Lifetime Solar Plus Storage Revenues 1MW-4hr� Storage� Revenue 2MW-4hr� Storage� Revenue Solar� -� Avoided� Electricity� Cost $13,845,261 $13,845,261 Solar� -� NJ� SRECs $3,783,544 $3,783,544 Storage� -� Regulation� Revenue $525,638 $621,304 Storage� -� PSE&G� Demand� Charge� Savings $44,501 $76,966 Storage� -� Capacity� Reduction� -� I-Cap $919,789 $1,612,006 Storage� -� Transmission� Cost� Reduction� -� I-Trans $1,075,744 $2,105,094 Storage� -� Demand� Response� Revenue $867,758 $1,418,041 Total� Revenues $21,062,235 $23,462,215 Solar Plus Storage Project Revenue $25.000.000 Storage - Demand Response Revenue $20.000.000 Storage - Transmission Cost Reduction - I- Trans Storage - Capacity Reduction - I-Cap $15.000.000 Storage - PSE&G Demand Charge Savings Storage - Regulation Revenue $10.000.000 Solar - NJ SRECs Solar - Avoided Electricity Cost $5.000.000 $0 1MW-4hr Storage Revenue 2MW-4hr Storage Revenue 4/11/2018 EDF RE Confidential 15

Key Take Aways 5,000 • Business models are emerging to take 4,000 advantage of multiple value streams New Peak • 3,000 Demand Most value streams are not contracted making financing 2,000 challenging 1,000 • Solar paired with storage is a powerful combination 0 12:00 AM 12:45 AM 1:30 AM 2:15 AM 3:00 AM 3:45 AM 4:30 AM 5:15 AM 6:00 AM 6:45 AM 7:30 AM 8:15 AM 9:00 AM 9:45 AM 10:30 AM 11:15 AM 12:00 PM 12:45 PM 1:30 PM 2:15 PM 3:00 PM 3:45 PM 4:30 PM 5:15 PM 6:00 PM 6:45 PM 7:30 PM 8:15 PM 9:00 PM 9:45 PM 10:30 PM 11:15 PM • Innovation, creativity, and track -1,000 record with new business models will original solar production net usage lead the way to widely distributed resources Tom Leyden, Senior Director • The full force of ketchup is coming! EDF Renewables Distributed Solutions thomas.leyden@edf-re.com Thank You! 609-532-3642