1. The Democratization of Energy
Jay Marhoefer
CEO and Executive Manager
Intelligent Generation LLC
June 17, 2010

2. Tonight’s discussion Overview of the electricity sector
The challenge of renewables
Intelligent GenerationTM and the democratization of energy

3. The obligatory plug
Intelligent GenerationTM is an integrated hardware/ software platform that democratizes how clean energy is produced and distributed.
The optimizer is a smart box that acquires electricity for a building when it is cheap or free and stores it in a battery for later use during peak times. It buys low and sells high.
The network forms a virtual power plant from the optimizers. It provides immediate, reliable power to utilities when it is most valuable.
The optimizer and network, when combined, can triple the cost savings of solar energy and cut the payback time in half.

4. Questions I hear
Why aren’t the wind turbines spinning when it’s a windy day?
Why can’t we run everything on renewables and use fossil fuels or nuclear power for backup?
Will a smart national electricity grid solve our problems?
Will solar ever work without subsidies?

5. Electricity 101

6. It’s a little more complicated
Types of power companies
IOUs (investor owned utilities)
IPPs (independent power producers)
Wholesale power marketers (e.g. Exelon)
Munis and co-ops
Load generating vs. “wires and meters”
ARES (alternative retail electricity suppliers)
Regulators
FERC (Federal Energy Regulatory Commission
PUCs (state public utility commissions)
ISOs/RTOs (regional transmission organizations, e.g. PJM)
Other stuff
Baseload/load-following/peaker
RPS (renewable portfolio standards)
Deregulation
For starters…

7. Seasonal demand varies

8. As does daily demand

9. Which leads to 3 challenges
Availability/reliability
Nukes, coal and natural gas are steady
Wind and solar are not
Resource management
Grid was built to be one-way
How to match demand with (variable) supply?
Inertia
Nuclear plant: 5-7 days from cold start
Coal plant: 3-5 days
Load following natural gas plant: minutes
Pure peaker: 15 minutes
Wind: minutes
Solar: instantaneous

10. Can wind do it all?

11. Maybe in winter

12. But not in summer

13. Wind’s effect on price (Texas)

14. Capacity doubled in 2008

15. …and so did price volatility
ERCOT—Houston Hub
2006
2007
2008
Average kWh price (cents)
5.2
5.4
7.2
Average daily spread
18.7
22.0
41.2
Lowest
(95.0)
(99.9)
(153.6)
HIghest
124.8
150.0
380.6
Moral
Wind blows most when you need it least (winter nights) and least when you need it most (summer days)
Wind’s volatility necessitates more high value ancillary services (storage, voltage regulation, spinning reserve)
Wind potential is greatest in areas far away from major cities (other than offshore)

16. What about a national grid?
Probably won’t happen
Politics (see next slide)
Shifting demographics to Sun Belt
Low wind
Not aligned with regional transmission groups
Cost of new transmission (tens of $ billions)
Property rights

17. Retail electricity rates vary

18. What about solar?
92% of Americans think it’s important to develop solar energy and incorporate it in the U.S. electricity system
Source: 2009 Schott Solar BarometerTM
But…long payback periods and high upfront costs
15+ years even with 30% federal tax credit
10+ years even with tax credit and $300/MWh REC

19. Supply side management
So what’s the answer?
Demand side management
Supply side management
Demand

20. Reshape electricity demand
Demand side management
Demand

21. Reshape electricity demand
Solar

22. Reshape electricity demand
Purchased off-peak /wind power stored in battery
Demand

23. Reshape electricity demand
Resulting purchased electricity
Demand

24. …by democratizing energy
A managed network of distributed renewable generation and storage
100,000 networked buildings is equivalent to bringing a small nuclear plant online immediately
Enormous market power even at 5% of total generation (see Texas)
The “Holy Grail”: consumer participation in the wholesale electricity market

25. Solar with IG Optimizer

26. Intelligent Generation network

27. Comparison Solar only Solar /battery/ timer Solar/ battery/ IG
Net installed cost
$10,000
$11,600
$12,000
Annual electric bill w/o solar
$2,000
Electricity cost savings
$260
$500
$700
Solar RECs
Capacity reduction $0
$200
Ancillary services
Peak demand credit
$100
TOTAL ANNUAL Savings
$760
$1,000
$1,700
Payback period—solar system
13 years
10 years
5.8 years
Payback period—battery/timer
N/A
1.6 years
1.2 years
Payback period—battery/IG
Total payback period
11.6 years
7.0 years

28. Other possibilities
Smart grid
Plug-in hybrids
Fuel cells

29. Smart grid
Focus has been on demand-side management and investor-owned utilities
What consumers like
Real time pricing
Rewards for peak time reductions
What consumers don’t like
Utility control of “smart” appliances (HAN)

30. Plug-in hybrids Potential storage capacity is formidable
10 million PHEVs could store 100,000 MWh (enough to power California for 2 hours)
“Charging” side makes perfect sense
Excess capacity and cheap electricity
Discharge side is problematic
Peak times coincide with commute home
Higher and better use
Reducing greenhouse gas emissions?
Getting US off foreign oil?

31. Fuel cells E.g., the “Bloom Box”
Darling of the cleantech VC crowd
$400 million invested to date
Reliable on-site production of electricity
But…
Won’t be affordable for 5-10 years
Needs a hydrocarbon (e.g., natural gas)
What happens in winter when the cost of natural gas is 6x?

32. Summary Hardware costs are coming down PHEVs are coming
Solar
Batteries/storage
PHEVs are coming
Legislation (RPS, PACE) is driving adoption
Lack of integrated vision
Doing what’s cheap (wind) vs. what’s smart
Those who democratize energy will reap the major benefits

33. Intelligent Generation LLC
Thank you
Jay Marhoefer
Intelligent Generation LLC