Making Clean Local Energy Accessible Now 7 November 2013 Craig Lewis Executive Director Clean Coalition mobile Hunters Point DG + IG Project Grid Modernization for a 21 st Century Power System

Making Clean Local Energy Accessible Now 2 Clean Coalition – Mission and Advisors Board of Advisors Jeff Anderson Co-founder and Former ED, Clean Economy Network Josh Becker General Partner and Co-founder, New Cycle Capital Pat Burt CEO, Palo Alto Tech Group; Councilman & Former Mayor, City of Palo Alto Jeff Brothers CEO, Sol Orchard Jeffrey Byron Vice Chairman National Board of Directors, Cleantech Open; Former Commissioner, CEC Rick DeGolia Senior Business Advisor, InVisM, Inc. John Geesman Former Commissioner, CEC Eric Gimon Independent Energy Expert Patricia Glaza Principal, Arsenal Venture Partners Mark Z. Jacobson Director of the Atmosphere/Energy Program & Professor of Civil and Environmental Engineering, Stanford University Dan Kammen Director of the Renewable and Appropriate Energy Laboratory at UC Berkeley; Former Chief Technical Specialist for RE & EE, World Bank Fred Keeley Treasurer, Santa Cruz County, and Former Speaker pro Tempore of the California State Assembly Felix Kramer Founder, California Cars Initiative Amory B. Lovins Chairman and Chief Scientist, Rocky Mountain Institute L. Hunter Lovins President, Natural Capitalism Solutions Ramamoorthy Ramesh Founding Director, DOE SunShot Initiative Governor Bill Ritter Director, Colorado State University’s Center for the New Energy Economy, and Former Colorado Governor Terry Tamminen Former Secretary of the California EPA and Special Advisor to CA Governor Arnold Schwarzenegger Jim Weldon Technology Executive R. James Woolsey Chairman, Foundation for the Defense of Democracies; Former Director of Central Intelligence ( ) Kurt Yeager Vice Chairman, Galvin Electricity Initiative; Former CEO, Electric Power Research Institute Mission Mission To accelerate the transition to local energy systems through innovative policies and programs that deliver cost-effective renewable energy, strengthen local economies, foster environmental sustainability, and provide energy resilience

Making Clean Local Energy Accessible Now 3 Distributed Generation + Intelligent Grid

Making Clean Local Energy Accessible Now 4 Plan for Renewables Everywhere within D-grid Distribution Grid Transmission Grid Project Size Wholesale DG Serves Local Loads Behind the Meter

Making Clean Local Energy Accessible Now 5 WDG Delivers Scale & Cost-Effectiveness Fast Solar Markets: Germany vs California (RPS + CSI + other) Germany has deployed 12 times more solar than California in the last decade despite California’s 70% better solar resource!!! Sources: CPUC, CEC, SEIA and German equivalents. Cumulative MW

Making Clean Local Energy Accessible Now 6 German Solar Pricing Translates to 5 cents/kWh Project SizeEuros/kWhUSD/kWh California Effective Rate $/kWh Under 10 kW kW to 40 kW kW to 1 MW MW to 10 MW Conversion rate for Euros to Dollars is €1:$1.309 California’s effective rate is reduced 40% due to tax incentives and then an additional 33% due to the superior solar resource Source: 10 September 2013 Replicating German scale and efficiencies would yield rooftop solar at only between 5 and 7 cents/kWh to California ratepayers

Making Clean Local Energy Accessible Now 7 DG+IG Initiative = Proving Feasibility of High DG Work with five utilities across the US to deploy a DG+IG demonstration project at each by yearend-2015 Prove viability of Distributed Generation (DG) providing at least 25% of total electric energy consumed within a single substation grid area Integrate Intelligent Grid (IG) solutions to ensure that grid reliability is maintained or improved from original level IG solutions include diversity and Energy Storage for sure, and potentially, advanced inverters, forecasting & curtailment, and/or Demand Response

Making Clean Local Energy Accessible Now 8 Benefits of DG+IG and Community Microgrids Power Quality, Reliability & Resilience benefits Increased customer satisfaction Improved equipment longevity Sustained vital services in otherwise complete blackout scenarios Avoided transmission & central generation vulnerabilities Economic benefits Significant private-sector investment Substantial local job creation Fixed electricity prices for 20+ years Localized energy spending Avoided inefficiencies of central generation & transmission Environmental benefits Avoiding dirty power generation, including nasty peaker plants that are often sited in underserved communities Utilizing built-environments and disturbed lands for generation projects Preserving pristine environments from transmission lines and other infrastructure

Making Clean Local Energy Accessible Now 9 Bayview-Hunters Point (BHP) Background BHP has a long history of environmental degradation. Houses one third of San Francisco’s hazardous waste sites. Was site of California's dirtiest peaker power plant until community activism forced its closure in % of BHP children suffer from asthma, and other chronic illnesses, 4 times CA average BHP has one of the highest poverty rates in San Francisco, with 30% of families earning less that $10,000 per year, and a median household income of $29,640 annually, as compared to $65,000 for white San Franciscans and a $55,221 average citywide. An overwhelming 72% of the African Americans in BHP have incomes below the federal poverty level. Sources: Hunters Point Family and Grid Alternatives.

Making Clean Local Energy Accessible Now 10 Hunters Point Project Scope & Deliverables Identify prospective sites and components for DG+IG solutions throughout Bayview-Hunters Point (BHP), including PV, biogas, wind, storage, demand response, and advanced inverters Model and simulate existing grid characteristics Model and simulate DG+IG scenarios that maintain or improve grid power quality, reliability, and resilience Recommend the optimum DG+IG scenario that best balances system cost & performance considerations Quantify the benefits of the recommended DG+IG scenario in terms of economics, environment, and grid efficiency & performance Design streamlined procurement & interconnection procedures Secure approvals for full DG+IG deployment Deploy!!!

Making Clean Local Energy Accessible Now 11 New Construction vs Retrofit Comparison Hunters Point Substation serves Major Redevelopment Area & Continuing Urban Neighborhoods (about 40/60 split)

Making Clean Local Energy Accessible Now 12 Hunters Point Project Goals Get at least 25% of the electric energy consumed within the Hunters Point substation area (Bayview-Hunters Point) coming from local renewables Deliver a proven model for maximizing local renewables under San Francisco’s 2020 goal to be 100% powered by renewables Achieve about $250 million dollars of private investment in Bayview- Hunters Point with about a third going to local wages Reduce annual greenhouse gas emissions by at least 50M pounds Serve as a model for clean local energy that can easily be scaled and replicated across the globe Provide a compelling business case for Community Microgrids that inspires cities and communities everywhere to implement Distributed Generation + Intelligent Grid (DG+IG) projects

Making Clean Local Energy Accessible Now 13 Starting Point: BHP Total Load Hunters Point Total Average Load: 328,217 MWh = 37.5 MW(ac) Existing conventional: 236,520 MWh = 27 MW(ac) Existing DG (PV+Biopower): 13,338 MWh = 1.5 MW(ac) Planned for Redev Zone: 78,359 MWh = 8.9 MW(ac) PG&E Average Load Calculation kW average = kWHr / Hrs kW average = kW peak x PG&E Load Factor. DART has different LFs for each customer type. kW peak and load factors provided by PG&E PG&E Load – Existing Summer KVAWinter KVA FeederKVA Lds fm LF SF P ,428 3,193 SF P ,383 5,062 SF P ,518 2,947 SF P SF P ,679 4,685 SF P ,836 1,769 SF P ,238 4,616 SF P ,167 2,849 SF P ,433 2,242 Totals: 26,008 27,815 NOTE: For all slides, average load is in MW (dc), total load is in MWh (ac) – except where noted; e.g. where average load represents conventional rather than renewable resources.

Making Clean Local Energy Accessible Now 14 Next: BHP DG Potential = 50MW New PV Bayview/Hunters Point DG Potential: 95,194 MWh = 60.6 MW = 30% of Total Load New PV: 52.1 MW Existing DG: 8.5 MW (PV equivalent) TypeAvg. Load (MW) Total Load (MWHr) New PV: Commercial ,333 New PV: Residential ,275 New PV: Parking Lots 2.64,102 New PV: Redev Zone ,146 Total New PV52.1 MW81,856 Existing PV Equiv.8.513,338 Total DG Potential:60.695,194

Making Clean Local Energy Accessible Now 15 BHP DG Potential: Commercial Potential PV: Commercial Rooftops Highlights: Number of visually-sited highest value “A” sites = 34 Total PV-potential rooftop square feet = 1.4M Total participating sq. 50% = 736K Total average generation, participating rooftops = 11 MW Example: 180 Napolean St. PV Sq. Ft = 47,600 System size = 714 kW Hunters Point Rooftops - Commercial Assumptions Watts/sq. ft.15 PV hrs./yr.1570 Participation Factor50% Results Total Sq. Ft. 1,472,000 Total Sq. Ft. Participating 736,000 Total Watts Participating 11,040,000 Total PV in MW 11.0 Total PV in Annual MWhr 17,333 Average kW per site 649

Making Clean Local Energy Accessible Now 16 BHP DG Potential: Parking Lots Potential PV: Parking Lots Highlights: Number of visually-sited highest value “A” sites = 13 Total PV-potential parking lot square feet = 348K Total participating sq. 50% = 174K Total average generation, participating parking lots = 2.6 MW Example: 1485 Bay Shore Blvd PV Sq. Ft = 37,800 System size = 567 kW Hunters Point Parking Lots Assumptions Watts/sq. ft.15 PV hrs./yr. 1,570 Participation Factor50% Results Total Sq. Ft.348,400 Total Sq. Ft Participating174,200 Total Watts Participating 2,613,000 Total PV in MW2.6 Total PV in Annaul MWh4,102 Average kW per site402

Making Clean Local Energy Accessible Now 17 BHP DG Potential: Residential Potential PV: Residential Rooftops Highlights: Total residential sites = 14,000 Average PV-viable square feet per residence (from 50 sites) = 343 Total PV-potential residential square feet = 4.8M Total participating sq. 25% = 1.2M Total average generation, participating rooftops = 18 MW Example: 50 average rooftops Average PV Sq. Ft = 343 Average system size = 5 kW Hunters Point Rooftops - Residential Assumptions Watts/sq. ft.15 PV hrs./yr.1570 Participation Factor25% Results Total HH 14,000 Average PV-viable sq. ft. per HH 343 Total PV-viable Sq. Ft. 4,802,560 Total PV-viable Sq. Ft. Participating 1,200,640 Total PV in Watts 18,009,600 Total PV in MW 18.0 Total PV in Annual MWh 28,275 Average PV system size per HH, kW 5

Making Clean Local Energy Accessible Now 18 BHP DG Potential: Redev Zone Potential PV: Redev Zone Highlights – total planned load of 78,359 MWh/yr: Total planned rooftop square feet in HP = 4.2M Total rooftop square feet in HP = 2.73M Total participating sq. 50% = 1.365M Total average generation, participating rooftops = 20.5 MW Hunters Point Rooftops – Redev Zone Assumptions Watts/sq. ft.15 PV hrs./yr.1570 HP % of Redev Zone65% Participation Factor50% Results Total Planned Rooftop Sq. Ft. 4,200,000 Total Rooftop Sq. Ft. in HP Substation 2,730,000 Total PV-usable Sq. Ft. Participating 1,365,000 Total PV in Watts 20,475,000 Total PV in MW 20.5 Total PV in annual MWh 32,146

Making Clean Local Energy Accessible Now 19 Benefits of 50 MW New DG in BHP Source: NREL JEDI calculator. Based on average installed cost of $3.25/W(ac) before taxes & incentives using PG&E rates/region. Economic $233M total regional economic output 1,560 Job Years near-term regional employment 590 Job Years ongoing regional employment $85M local wages in construction & installation $6.75M state/local construction-related sales taxes Energy $244M local energy spend vs. imported over 20 years $79.7M avoided transmission costs over 20 years Lower cost vs. natural gas 14.9¢/kWh solar vs. $15.3¢/kWh CCNG LCOE Environment 82M lbs. annual reductions in GHG emissions 15M Gallons annual water savings Photo courtesy of GRID Alternatives ~$250M in Private Investment Over 20 Years Delivers These Regional Benefits:

Making Clean Local Energy Accessible Now 20 Peek of the Future at Hunters Point

Making Clean Local Energy Accessible Now 21 Back-Up Slides

Making Clean Local Energy Accessible Now 22 Example DG+IG Grid Stabilization 1.6AM: no PV impact 2.Noon: 20MW PV causes overvoltage without DG+IG 3.Noon: DG+IG stabilizes voltage impact from 20MW PV

Making Clean Local Energy Accessible Now 23 Advanced Inverters – Reactive Power Champion P 100% Q 45.8% S 110% REACTIVE (Q) REAL (P) 100 kW solar PV AC power 110 kVA inverter capacity 0.9 power factor 45.8 kVAr reactive power 100 kW real power Oversized inverter: No reduction of PV real power Draws up to 10 kW real power from the grid Provides reactive power 24/7/365 Oversized inverter: No reduction of PV real power Draws up to 10 kW real power from the grid Provides reactive power 24/7/365 P: Real power (kW) Q: Reactive power (kVAr) S: Total power (kVA)

Making Clean Local Energy Accessible Now 24 Example DG+IG Grid Stabilization 1.6AM: no PV impact 2.Noon: 20MW PV causes overvoltage without DG+IG 3.Noon: DG+IG stabilizes voltage impact from 20MW PV

Making Clean Local Energy Accessible Now 25 Distributed Voltage Regulation – Location Matters “The old adage is that reactive power does not travel well.” Oak Ridge National Laboratory (2008) Source: Oak Ridge National Laboratory (2008) T&D lines absorb 8- 20x more reactive power than real power. Prevent Blackouts: When a transmission path is lost, remaining lines are heavily loaded and losses are higher. T&D lines absorb 8- 20x more reactive power than real power. Prevent Blackouts: When a transmission path is lost, remaining lines are heavily loaded and losses are higher.

Making Clean Local Energy Accessible Now 26 Replacing SONGS with DG+IG Huntington Beach 290 MVars (minus line losses = 261 MVars) Huntington Beach 290 MVars (minus line losses = 261 MVars) vs 570 MW of local solar with advanced inverters, oversized by 10% set at 0.9 Power Factor = 261 MVArs Local solar configured with advanced inverters alone can replace SONGS

Making Clean Local Energy Accessible Now 27 Replace SONGS – Energy Storage Potential Targets proposed by CPUC include 745 MW storage in Southern California

Making Clean Local Energy Accessible Now 28 PV Potential of Top 25 Roofs in LA is Over 75 MW 100+ GW of Built-Environment Solar Potential in California vs 60 GW of Peak Load

Making Clean Local Energy Accessible Now 29 Renewables are Reliable Country Percent of electrical generation in 2007 from non-hydro renewables 2007 SAIDI – outage duration (minutes) 2007 SAIFI – outage frequency (number of outage events) Denmark29.4%230.5 Germany12%240.5 United States2.8% Sources: Galvin Electricity Initiative, Electric Reliability: Problems, Progress and Policy Solutions, February 2011 U.S. Energy Information Administration, International Energy Statistics, 2011

Making Clean Local Energy Accessible Now 30 DG+IG Core Solutions for Voltage Regulation SolutionsBenefits Distributed Generation Provisions reactive power where it’s needed most for regulation Avoids line losses Reduces congestion of transmission and distribution lines Advanced Inverters (paired with solar, storage) Provisions distributed reactive power Reacts automatically within fractions of a second (conventional resources can take minutes to react) Converts real power from the grid to reactive power 24/7/365 Oversized inverters can deliver reactive power without reducing DG real power output Ride-through voltage events, remain attached longer than conventional spinning generators without harm Modern inverters already have these advanced capabilities Energy Storage (batteries, flywheel) Provisions both real and reactive power Generally paired with advanced inverters

Making Clean Local Energy Accessible Now 31 DG+IG Solutions for Balancing Power & Frequency SolutionsBenefits Demand Response Automated demand response can address power imbalances within fractions of a second Reduces or shift load away from peak hours to free up other resources to provide real power Energy Storage (batteries, flywheel) Supplies and absorbs power Can reduce or shift load Can react automatically within fractions of a second Forecasting Forecasting improvements will reduce unpredicted differences between scheduled supply and actual supply Curtailment (proactive ramp control) Reduce output from intermittent generators for proactive ramp control to smooth out short term impulse

Making Clean Local Energy Accessible Now 32 DG+IG Keeps Power in Balance DR, ES shifts load ES, Auto-DR, curtail for steep ramp

Making Clean Local Energy Accessible Now 33 DG+IG Projects Begin with Grid Modeling & Simulation

Making Clean Local Energy Accessible Now 34 DG+IG Policy Innovations Required Integrate Grid Planning Transparent and public T&D planning processes Proactively evaluate DG+IG alternatives to new transmission investments Necessary to meet goals re: renewables, EVs, costs, local job creation, resilience Implement Full Cost & Value Accounting Investments should reflect the full spectrum of rate impacts, economic growth, health, safety, and environmental sustainability Prevent bias against DG+IG (e.g. hidden transmission costs) Monetize DG+IG Grid Services Establishing markets that compensate at full value of grid services is fundamental to optimizing value for ratepayers Prioritize DG+IG Development in High Value Locations Identify preferred locations on the grid based on transparent cost & value criteria Set “Local Portfolio Standard” targets Update Technical Standards: Update national technical standards (IEEE/ UL) to allow DG+IG to provide grid services to the fullest potential

Making Clean Local Energy Accessible Now 35 Clean Coalition Overarching Objectives From 2020 onward, at least 50% of all new electricity generation in the United States will be from local sources. Locally generated electricity does not travel over high voltage transmission lines to get from the location it is generated to the area it is consumed. From 2020 onward, at least 80% of all new electricity generation in the United States will be from renewable sources. By 2020, policies and programs are well established for ensuring successful fulfillment of the other two objectives. Policies reflect the full value of local renewable energy. Programs prove the superiority of local energy systems in terms of economics, environment, and resilience.

Making Clean Local Energy Accessible Now 36 Clean Coalition Activities in 2013 Policy: Implement policy innovations that remove barriers and open market opportunities for Distributed Generation (DG) and Intelligent Grid (IG) solutions Key victories: SB 43, AB 327 and positioning of Advanced Inverter as key reactive power solution Wholesale DG Programs: Establish and expand market opportunities for WDG across the country Key victories: Georgia Power, Los Angeles, Long Island, Palo Alto, Fort Collins, and Sacramento DG+IG: Stage five DG+IG demonstration projects for online by yearend-2015 Key progress: Hunters Point (PG&E), Virgin Islands (WAPA), Palo Alto, and Los Angeles Solar Developers Council: Open markets & remove barriers for members Key progress: Multiple new WDG programs established and key policy victories Communications: Increase impact and frequency of communications Key progress: Three key communications pieces per month plus heavy blogging, rapid response, and social media activities. New concepts like Advanced Inverters.

Making Clean Local Energy Accessible Now 37 Hunters Point Scale: Cost Benefit Busbar wholesale cost from plant 2015: $11.7 ¢/kWh 2024: $17.1 ¢/kWh 2034: $21.7 ¢/kWh LCEO: $15.4 ¢/kWh Hunters Point Solar LCOE is less than CCNG NATURAL GAS SOLAR 500 kW Solar achieves lower LCOE than new natural gas generation – Hunters Point average expected commercial size = 650 kW Source: CEC, 2010

Making Clean Local Energy Accessible Now 38 Zero Net Energy is Key Driver for Smart Buildings

Making Clean Local Energy Accessible Now 39 Adoption Cycle: Demos, Certs, Standards & Codes

Making Clean Local Energy Accessible Now 40 Buildings of 2030 Must Fit with Cities of Future

Making Clean Local Energy Accessible Now 41 Expect EV Chargers Everywhere EVs provide the CLEAN Bridge between Energy, Buildings, Cities and Transportation

Making Clean Local Energy Accessible Now 42 German Solar Capacity is Small WDG (Rooftops) Source: Paul Gipe, March 2011 Germany’s solar deployments are almost entirely sub-2 MW projects on built- environments and interconnected to the distribution grid (not behind-the-meter) 22.5% 26% 23.25% 9.25% 19%

Making Clean Local Energy Accessible Now 43 US has Far Better Solar Resource than Germany

Making Clean Local Energy Accessible Now 44 WDG is Key Market Segment with Superior Value The most cost-effective solar is large WDG, not central station due to significant hidden T&D costs Distribution GridT-Grid PV Project size and type 100kW roof 500kW roof 1 MW roof 1 MW ground 5 MW ground 50 MW ground Required PPA Rate 16¢15¢13¢9-11¢8-10¢7-9¢ T&D costs0¢ 2-4¢ Ratepayer cost per kWh 16¢15¢13¢9-11¢8-10¢9-13¢ Sources: CAISO, CEC, and Clean Coalition, Nov2012; see full original analysis from Jul2011 at Total Ratepayer Cost of Solar

Making Clean Local Energy Accessible Now 45 Deployment Volume Drives Learning Curves Si learning curve Solar pricing is reduced by 20% for every doubling of deployed volume New technology learning curve Efficiency innovation