1. Thoughts About the Grid of the Future
……and Realities about the Future of the Grid
Malaquías Encarnación
Project Director – Solutions Development
AES Energy Storage
www.AESEnergyStorage.com

2. The AES diverse portfolio of assets and broad market footprint
provide the market insight & credibility to create an energy storage
business.
37 MW Solar PV An industry leader in…
Independent Power Production
1,755 MW Wind Generation in the Project Finance
Generation in the Europe Carbon Offsets
United States International Privatizations
Deregulation
Solar PV
132 Power plants worldwide
totaling approximately 40 GW
100 million people gross generation capacity
are served with
AES electricity.
Fuel Type Geography
Asia &
Renewables Middle East Latin
Coal America
14 Utilities worldwide, 21% 13%
26%
Other
serving 11 million Thermal 5% 41% Europe,
27%
customers, with sales of CIS &
33% Africa 34%
77,000 GWh
Gas North America
Note: As of October 2010 2
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3. ?
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4. The Grid Of The Future
Source: DoE
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5. Problems Power Grid Operators have today
Irreversible Causes Reversible Consequences
• The Grid is aging, most tecs developed • There have been 5-7 massive blackouts
back in the 50’s over the last 40 Years
• Since 1982 demand growth has • The average outage affects 15% more
exceeded transmission growth by at people every 5 years
least 25% every year • Outages and Power Quality cost
• All states have aggressive plans to businesses more than $150 BB/year
develop renewables (20%) • Blackouts occasioned by unexpected
• Load is becoming more sensitive to drops in renewable resources (TX)
outages (more expensive to interrupt) • Voltage constraints and out-of-merit units
• Not enough room for redundancy and to supply reactive power
spare equipment • More frequent system islands due to
• Citizen opposition to siting and building transmission congestions
new TLines • Security issues with more lines been
added to the same right-of-way
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6. Problems Energy Storage is solving today
• Efficient Operating Reserves
(Frequency Regulation and
Spinning Reserve)
• Release stranded capacity
• Eliminate out-of-merit dispatch
• Enable Wind and Solar
integration
• Solve T&D congestion problems
(deferral)
• Local voltage issues
• Low utilization peaking resources
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7. Problems we know ES will solve in the future
• Highest flexibility and self-healing
• Ability to forecast, analyze and
expect
• A lot of data available for Power
Systems analysis
• Higher situational awareness through
PMUs and others
• Multiple seasonal and situational
operations profile
• Distributed storage for distributed
generation
• Integration of EVs and smart
appliances
• Ancillary Services provided by
renewable resources
• Emissions Reduction
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8. Energy storage meets two pressing goals of electric power policy
simultaneously: reduce emissions and ensure reliability.
!
absorbs as generated
Nuclear
Emissions- (4%) Demand
Free
Response
Wind Hydro
(3%)
Solar
CCS Geothermal
Capacity
(2%)
(42%)
Emissions
Profile
Emission-
bearing
Nat. Gas
(46%)
Coal
(3%)
Inflexible
Flexibility Profile
Highly Flexible
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Size represents share of planned capacity additions in the U.S. 2010-2025, Source: EER
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9. Value: Advanced energy storage solutions are more flexible and
precise than the grid’s best fossil solutions.
“Ideal regulation capacity is 2.7 times more efficient than the average combustion turbine capacity.”
Makarov, Y.V. Assessing the value of Regulation Resources Based on Their Time Response Characteristics.
http://certs.lbl.gov/pdf/task-2-4-regulation-resources.pdf
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10. Energy Storage offers multiple operational and
economic advantages over alternatives.
Capacity Alternatives
AES 400 MW 400 MW CT 500 MW CCGT Demand Response
Characteristics
BESS (8 x 50) (LM 6000)
Hours Synchronized
>95% <10% 80% Value limited to peak.
Startup Time 1 min 15 min Up to 4 hrs 1 min
Regulation 800 MW/min 40 MW/min 12 MW/min Not generally available
Spinning Reserve
800 MW/min 40 MW/min 12 MW/min Fast
Operational
Flexibility Voltage Support Yes, ±400 MVAR Rarely Synched Yes No
Min. Load Req. 0 MW 180 MW 200 MW 0 MW
Primary Fuel Any base fuel,
Gas, FO Gas N/A
Diversity including wind
Heat-rate 7731(1) 10500 6765 0
Efficiency Controllable Load
Yes, 0-400 MW No No Not available off-peak
Direct Emissions None Significant Moderate None
Water Requirement
No Yes Yes No
Environment
Emissions
Reduction Significant Limited Significant Significant
(1)Based on AC-AC round-trip efficiency of 87.5% and charging source of electricity with 6765 BTU/kWh (CCGT). 10
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11. Leading ISOs and Market Operators are integrating ES
PJM NYISO CDEC Others
• Allowed ES into • ES resource tariff • 12 MW installed in • HECO requires
market in 08’ issued in 09’ Los Andes in 09’ wind-solar-storage
• Pay-for-performance • Implementing pay- • Storage best integration for
expected 1Q12 for-performance performing operating reliability
• 32 MW installed at a • 8 MW of Battery- reserve • CAISO ES program
wind farm in WV Based ES in operation • 20 MW under in 2012, planning
construction calls for 1,000 MW
• 1 MW installed at • 20 MW of flywheels
PJM HQ’s parking lot ES in operation • Offers Primary and • ERCOT new law
Secondary FR clarifying storage as
• Integration of EV to generation, for
the FR market renewable integration
“Energy storage is among the best means “Energy storage has the ability to change everything as we know it today. For
to ensure we can reliably integrate example, PJM has successfully linked AES’s lithium ion batteries to the grid to
renewable energy resources into the grid” provide regulation service. These types of units provide grid operators with an
– Jon Wellinghoff, Chairman, FERC efficient and accurate tool to deliver grid stability by balancing the varying load.”
– Chantal Hendrzak, PJM’s General Manager of Applied Solutions
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12. Case Study: AES Energy Storage has 88 MW in operation
Capacity Release for Generators Reserve Capacity for Utilities and LSEs
12 MW 8 MW
Los Andes, Chile Johnson City, NY
COD: Dec-2009 COD: Dec-2010
Size: 12 MW Size: 8/20 MW (DOE LG)
Revenue Model: 94 GWh energy sales/year Revenue Model: Reg. Capacity Sales (NYISO)
Commercial Availability.: 100% Commercial Availability.: >95%
20 MW Angamos, Chile 98 MW Wind/32 MW Storage Project, WV-US
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Capacity Release for Generators Reserve Capacity for Utilities and LSEs
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13. AES Energy Storage Business Model
To Provide Power Services using Fast,
Emissions-Free Energy Storage Services
Customized Applications
Advanced ES Turnkey
Technologies Design/Deploy
Software and Monitoring &
Control Ops 24/7
Flexibility and Efficiency
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14. A12 MW project in Chile project has proven the most reliable resource
for the grid in the region.
Capacity Release for Generators
COD: Dec-2009
Size: 12 MW
Revenue Model: 94 GWh/year
Commercial Availability: 100%
1:02 am 1:16 am
Loss of 200 MW in SING: November 24th
Pre-programmed digital response
when frequency dropped below 50 Hz
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15. Johnson City (8/20MW) was the first energy storage project to
provide reserve capacity to utilities in the NYISO market – proving
the siting and permitting of battery systems in NY.
Reserve Capacity for Utilities and LSEs
COD: Dec-2010/3Q-2011
Size: 8/20 MW
Revenue Model: Reg. Capacity Sales (NYISO)
Commercial Availability.: >95%
AES Johnson City SCADA Daily Report
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16. Laurel Mountain (32 MW) in West Virginia is the first Energy
Storage project to be integrated to a wind farm
Reserve Capacity for Utilities and LSEs
COD: Sept-2011
Size: 32 MW
Revenue Model: Reg. Capacity Sales (PJM)
Additional Capability: Wind Ramp Moderation
Commercial Availability.: >95%
AES Laurel Mountain SCADA Daily Report 16
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18. Keeping High Availability Other Key Benefits:
Software
• Highly flexible, expandable and
and
control
reliable
Modular
Design
100%
Synch’d
• 100 % Emissions Free
• No water required
24/7 > 95% Vendors • Operation almost fully
CAF integration
Monitor
automated
• Re-programmable and
Fast
Response
Distributed
adaptable
Must
perform to • Always synched to the grid
get paid
• Computer based control
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19. AES Energy Storage bundles its Capacity & Reliability Services into
a single PPA structure paid monthly
AES Energy Storage only gets paid if the services are delivered as contracted.
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20. ü Value
ü Precedent
ü Business Model
ü Credentials
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21. Got questions?
Project Director!
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