1. Smart Storage Space and Water Heaters Resources for Grid Management, Renewable Integration, and Conservation Paul Steffes Steffes Corporation psteffes@steffes.com 888-783-3337 October 4, 2010

2. 2  Work with over 200 Electric Utilities across North America (some for over 20 years)  World leader in innovative electric storage Steffes Corporation “Commitment to Innovation”

3. 3  Adjust the target temperature up or down in response to power availability (grid signal) - “Battery” charge level  Adjust the input wattage  Provide Comfort Assurance, so home is always warm and has hot water “Grid-Interactive Controls” for Electric Storage ” Family of Electric Storage Products

4. 4 Grid-Interactive Residential Electric Storage Furnace with or without Heat Pump 86 to 240 kWh storage Stored renewable and off-peak energy

5. 5 Forced Air Hydronic 480 kWhStorage 960 kWh Storage Ten Story Office Building Grid-Interactive Commercial Size Forced Air and Hydronic Units “ThermElect” Electric Storage

6. 6 Grid-Interactive Renewable Water Heating Think of a 105 gal. Water Heater as a 26kWh Battery (nominal two day supply of hot water)

7. 7 Grid-Interactive Electric Storage Systems Deliver: 1.Arbitrage Value 2.LMP following 3.Renewable Integration Value 4.Ancillary Value 5.Conservation

8. 8 Renewable Integration  Wind and Solar ramp up & down quickly. Grid interactive controls can ramp just as fast  Allows a higher percentage of Renewable Energy (RE) to be utilized  Enhances RE value  Reduces Carbon footprint  Lowers cost for consumers

9. 9 NYISO 2008 Data

10. 10 Variability of Electric Load Water Heater Load

11. 11 Variability of Renewables Three Year Stable Annual Wind Output When 25% of kWh’s are derived from Wind Amount of Potentially Curtailed Wind Energy

12. 12 MISO NSP.Buffr Gennode LMP 2007 Real Time Prices

13. 13 Variable Real Time Price Three Year Stable Annual Average Price

14. 14 Putting it Together Overall Utility Load Wind Generation Wholesale Energy Cost Smart Space & Water Heater Load Potentially Curtailed Wind Generation Typical Water Heater Load

15. 15 This analysis uses three (3) years of actual load, wind scaled to 25% of load, LMP, and EPRI water heater data. Energy Storage Method Wholesale Cost ($/y) Total Energy Used (kW·h/y) Wind Energy Use (kW·h/y) Nonwind Energy Use (kW·h/y) CO 2 Reduction† (lb/y) 55-gal Uncontrolled Storage Water Heater $251480511563649Baseline 0% 24%76% 85-gal Grid-Interactive Storage Water Heater $1334940272622141436 -47%3%55%45%-39% 105-gal Grid-Interactive Storage Water Heater with Smart Signal $1264974284021341515 -50%4%57%43%-42% Assumes that COP = 2 above 55°F and COP = 1 at or below 55°F 55-gal Heat Pump Water Heater (Zone 1) $126240758018281821 -50% 24%76%-50% 55-gal Heat Pump Water Heater (Zone 3) $153293671722191430 -39% 24%76%-39% 55-gal Heat Pump Water Heater (Zone 5) $18735668802686964 -25%-26%25%75%-26% 55-gal Heat Pump Water Heater (Zone 7) $20538999722928721 -18%-19%25%75%-20% †Assumes 1 lb of CO 2 per kW·h of nonwind energy use. Renewable Integration and Arbitrage Value New Dimension of Conservation and Efficiency, charging more when there is renewable energy available and storing more energy to span times without renewable energy With 25% Wind Energy

16. 16 Six days of output from a 5MW Solar PV plant As grid-interactive storage heaters follow solar and wind up and down in realtime, the carbon is significantly further reduced

17. 17 Bonus Economic and Environmental Value Note the monetary value of Regulation (Greater then energy at times) Regulating with a non fuel consuming resource has a significant carbon reduction (up to 70%)

18. 18 Fast regulation, responding to an Automatic Generation Control (AGC), Renewable following or other signals to: Provide frequency control Reduce generator fuel consumption Improve grid reliability Reduce regulation costs Reduced system CO2 Yield ancillary value payments Ancillary Value Grid-Interactive Renewable Electric Water Heaters

19. 19 Equivalent times and magnitudes above and below nominal Requires high-speed two- way communication infrastructure Ancillary Value

20. 20 Ancillary and Other Value Data from Grid-Interactive Space and Water Heating (2-way smart communication needed) 3-Step Continuously-Variable

21. 21

22. 22 BPA Balancing Reserves Deployment

23. 23 Grid-Interactive Space and Water Heaters are… “Thermal Batteries” With smart control, you affect the grid exactly like other electric storage technologies

24. 24 Low-Cost Electric Storage  To realize the dream of the smart-grid significant storage in needed  CALISO says 4000 Megawatts of variable storage need to balance renewables  Grid-interactive Thermal Storage is a small fraction of cost of other methods  Pursue “Low hanging Fruit”  Fill low-cost window of opportunity first

25. 25 Can Work With Various Interoperable Smart Control Signals 1.One-Way Dual Relay Control 2.One-Way Variable Control Signal 3.Two-Way High-Speed Signal 4.Other…

26. 26 Fixed Dual Relay Control Ramping Dual Relay control

27. 27 One-Way Variable Control Signal Renewable Integration and Arbitrage Value

28. 28 Communication Heartbeat 1.Hours: to buy low-cost electricity and consume it when cost are higher (arbitrage value) 2.Minutes: to vary charge rate and level based on current renewable generation output, real-time pricing, and other grid needs or limitations (renewable integration value) 3.Seconds: to provide fast up and down regulation for frequency control and grid reliability (ancillary value) 4.Other… Arbitrage, Renewable Integration & Ancillary Value

29. 29 Grid-Interactive Storage Space & Water Heating Systems are good for…  Environment  Consumers  Conservation  Efficiency  The Grid

30. 30 “If we want to have a low or zero carbon economy, we must encourage products or technologies that have the potential of getting us there.” Paul Steffes Steffes Corporation psteffes@steffes.com 888-783-3337 Questions?