© Energy Storage: Addressing Today’s Grid Challenges for Tomorrow’s Energy Demands Brad Roberts Power Quality Systems Director S&C Electric Company Grid Week September 2011

The Grid Connected Energy Storage Market is Large….. Estimated Global Installed Capacity of Energy Storage Source: StrateGen Consulting, LLC research; thermal storage installed and announced capacity estimated by Ice Energy and Calmac. Note: Estimates include thermal energy storage for cooling only. Figures current as of April, 2010.

Grid-Purposed Energy Storage - Hierarchy Large Central Units 100s of MW Storage at Grid Edge 10s of kW Substation Batteries 10s of MW Graphics adapted from an EPRI Presentation by Joe Hughes

Grid Storage Benefits Prepare for new Revenue Models Prepare for new Revenue Models Prepare for new Renewable & Reliability Mandates Prepare for new Renewable & Reliability Mandates Prepare for new Customer Behaviors Prepare for new Customer Behaviors 1- Strategic Benefits Energy Arbitrage Energy Arbitrage Frequency Regulation Frequency Regulation Generation Capacity Generation Capacity 3- Market Benefits T&D Capital Deferral T&D Capital Deferral Service Reliability (DA) Service Reliability (DA) Improve System Efficiencies Improve System Efficiencies Voltage Regulation Voltage Regulation 2- Service Benefits All three must work together synergistically to justify widespread storage deployment

Layered Intelligence Reaction Times

Smart Grid Projects with Storage Project NameSize in MW Online Date Unique Features NEDO 1 MW2011Two battery types and solar integration VACA-Dixon 2 MW2011Integration with 10MW solar plant BC Hydro Golden and Field 2 MW (Total)2012 Provide supplemental power to over 250 customers and avoid costs of new substation Catalina Island 1 MW2011 Supplement diesel generators in island community Hitachi GST 4 MW2012 Duel use as backup power system and peak shaving Santa Rita Jail 2 MW2011Peak shaving and islanding scheme as part of overall smart grid implementation

Smart Grid Projects with Storage Project NameSize in MW Online Date Unique Features Presidio Station 4 MW2010 Supports an entire town of during outages and combines with smart grid distribution Rock County Station 1 MW2009 Integration with wind power to provide load leveling East Busco Station 2 MW2009 First integration of energy storage and smart grid distribution Citizens Station 2 MW2009 Up to 8 hours of supplemental power to increase system reliability Balls Gap Station 2 MW2009 Up to 8 hours of supplemental power to increase system reliability Chemical Station 1 MW2006First system of its kind in United States and proved the use of energy storage in peak shaving to defer substation upgrades

CES – A Virtual Substation Battery Communication & Control Layout for CES Utility Dispatch Center /SCADA CES Control Hub Integration Platform Substation CES CES is Operated as a Fleet offering a Multi-MW, Multi-hour Storage Grid Benefits: 4) Load Leveling at substation 5) Substation Power Factor Correction 6) Ancillary services Local Benefits: 1) Backup power 2) Voltage correction 3) Renewable Integration

AEP Ohio and S&C Debut First Lithium-Ion- Based CES First CES units in the world to be installed at customer homesFirst CES units in the world to be installed at customer homes Sensing technology in CES units recognizes when homes lose electric power, and automatically provides back-up for up to several hoursSensing technology in CES units recognizes when homes lose electric power, and automatically provides back-up for up to several hours S&C is contributing significant technological expertise to the AEP Ohio gridSMART Demonstration Project, providing customers greater energy control and improving electric distribution service and performanceS&C is contributing significant technological expertise to the AEP Ohio gridSMART Demonstration Project, providing customers greater energy control and improving electric distribution service and performance

Next Steps for Storage DOE Smart Grid and Storage stimulus projects will confirm the value of storageDOE Smart Grid and Storage stimulus projects will confirm the value of storage Wyden Storage Act would provide the much needed Investment Tax Credits to stimulate growthWyden Storage Act would provide the much needed Investment Tax Credits to stimulate growth Storage participation in the Ancillary Services market has proven very effectiveStorage participation in the Ancillary Services market has proven very effective Storage will be a key component of higher penetration of renewables and electric transportationStorage will be a key component of higher penetration of renewables and electric transportation