East Bay Community Energy Local Development Business Plan Task 1 LCOE (for grid-side DER) Overview Webinar November 30, 2017 Thomas Yurysta, Optony LDBP Project Team: Special Advisors: Betony Jones & Gary Calderon

LCOE Analysis - Overview Purpose Show current costs for the DG technologies most readily available in Alameda County Format and Content Costs expressed in levelized cost of energy (“LCOE”) LCOE is the net present value of all energy procured from a resource over a fixed period of time LCOE tool is an excel spreadsheet User has ability to adjust resource mix and see affect on overall portfolio LCOE User can also adjust inputs to derive new LCOEs The tool also shows potential capacities and energy output of each technology This is a necessity in order to provide an overall weighted portfolio LCOE However, the capacity numbers should be taken with a grain of salt. The primary purpose of this tool is not to estimate countywide capacity of different DG technologies, so broad assumptions were made in deriving these numbers

LCOE Analysis - Approach Methodology Cost For solar, since data is widely available, cost estimates derived ground-up using known pricing for individual components For other technologies, cost estimates derived from industry reports and supplemented with vendor quotes and empirical data Cost broken down by initial capital cost, annual fixed costs, and annual variable costs Capacity Factor and Energy Output Solar and wind are highly dependent on location and system configuration, so production estimates were modeled For other resources that are not constrained by resource availability, production estimates were based on typical runtimes for the plant type (e.g. typical biofuel plants have capacity factors of 80%) LCOE LCOE is a simple summation once cost and energy output numbers are known The LCOE calculation is done on a separate tab of the spreadsheet. NREL’s online LCOE calculator was used to validate.

LCOE Analysis - Approach Notes and Limitations Energy generation is a long term investment with large upfront costs. As such, LCOE is highly sensitive to both financing costs and discount rate. A discount rate of 6% was used for this analysis. The concept of LCOE is less intuitive for storage technologies, since energy is being time shifted rather than created. For flywheels, which are often used for grid regulation, both charging and discharging cycles are included in the energy side of the LCOE calculation For all other storage technologies, only the discharge cycles are included LCOE is best used as a cost comparison between energy generation technologies

LCOE Analysis - Results Findings Solar LCOEs range from $0.10/kWh to $0.156/kWh Lowest for large ground mounts in the sunnier eastern side of the County Highest for smaller roof mounts along the Bay Solar has by far the greatest potential, so overall portfolio LCOE driven by solar Large scale wind has the best LCOE at $0.084/kWh This is for turbines in the northeast corner of the County where wind speed is highest For other DG technologies, LCOE varies greatly Biofuels driven by fuel source and plant capacity factor Storage and fuel cells driven by runtime Comparison to Lazard’s LCOE Analysis Our numbers generally fall within the bounds of Lazard ranges. Exceptions: Our wind LCOE is higher. Lazard report assumes capacity factor of 30-35%, but highest available in Alameda County is 29%. Our solar LCOE for large ground mounts is higher. Lazard assumes higher insolation than is available in Alameda County (main factor) and larger sizing of 10 MW (minor factor)

LCOE Tool – Main Table Shows all inputs and resulting LCOE for each technology. The green rows show cumulative totals.

Toggle resources on/off here Totals in this row update to reflect selected resource mix LCOE of total portfolio $0.129/kWh over 20 years

Measured solar potential higher than shown here Potential capacities for biofuels, fuel cells, and storage are placeholders, represent typical plant sizes T&D losses for storage technologies represent round- trip conversion efficiencies Variable costs are mostly fuel, some O&M related to plant runtime

LCOE Tool – Calculator Tab Allows the user to select a DG technology from a dropdown list (yellow cells) and adjust any of the input associated with that technology (grey cells) to see the effect on LCOE. User can also adjust the analysis period or discount rate.

The deadline for submitting comments is: Thank you The Draft EBCE LDBP Task 1 (Grid-side DER) LCOE Report is posted for public review and comment at: http://ebce.org/local-development-business-plan/ The deadline for submitting comments is: December 8, 2017 LDBP Project Team: Special Advisors: Betony Jones & Gary Calderon