1. Iowa Stored Energy Park APPA Engineering and Operations April 16, 2007 Sam Shepard Electricity and Air Storage Enterprises CAPTURING THE POWER OF NATURE

2. The Wind blows mightily in Iowa At Night In the northwest quadrant So -- How do we move the wind ?

3. CAPTURING THE POWER OF NATURE Presentation Overview Project Summary Economics Technology Support Conclusions

4. Iowa Stored Energy Park An aquifer based storage system Combustion turbine technology Bio-derived fuel compatible CAPTURING THE POWER OF NATURE

6. Three parts to a CAES system Storage Generation Compression

7. CAPTURING THE POWER OF NATURE Storage Two existing CAES plants use mined salt caverns ISEP will use an aquifer Similar to natural gas storage techniques

8. CAPTURING THE POWER OF NATURE Generation- Conventional Combustion Technology Compression– Separate and Replace Combustor- similar to existing Expander-similar to existing High and low pressure sections

9. CAPTURING THE POWER OF NATURE Generation- Fuel Two separate combustors High and Low Pressure Investigating use of two fuels Natural gas Bio-derived fuels

10. CAPTURING THE POWER OF NATURE Compression Use existing high efficiency equipment Proven track record – Air Separation Industry

11. CAPTURING THE POWER OF NATURE So how does CAES work with Wind ? Increases off-peak system load Utilizes transmission when line ratings are high Provides voltage and frequency regulation During either compression or generation

12. CAPTURING THE POWER OF NATURE Funding to Date State of Iowa US DOE Iowa municipal utilities

13. CAPTURING THE POWER OF NATURE Status Assessed all candidate sites in Iowa Completed seismic testing on best 2 sites Selected best site – west of Des Moines Building ownership / off-take portfolio Preparing to drill test wells and test fluid flow

14. CAPTURING THE POWER OF NATURE Supporters Iowa municipals Local residents US DOE

15. CAPTURING THE POWER OF NATURE Summary Preliminary analysis confirms feasibility Supports renewable energy needs Adaptation of proven technology Meets electric system technical/ market needs

16. Iowa Stored Energy Park Its The Responsible Thing To Do Why The Economics Make Sense CAPTURING THE POWER OF NATURE

17. Load Duration Curve 0 2 4 6 8 10 12 0%10%20%30%40%50%60%70%80%90% % Hours Demand MW

18. CAPTURING THE POWER OF NATURE Comparative Cost $/MWh 0 10 20 30 40 50 60 70 80 90 Coal-PCCCSCCAES Compression Fuel + VOM Fixed Costs $/MWh

19. CAPTURING THE POWER OF NATURE Cost Comparisons-Base Economics 0 50 100 150 200 250 10%15%20%25%30%35%40%45%50% Capacity Factor $/MWh Coal-PC Coal -IGCC CC SC CAES

20. CAPTURING THE POWER OF NATURE Energy Generation 0 2 4 6 8 10 12 0%10%20%30%40%50%60%70%80%90% % Hours Diesel GT CAES Wind Coal 2 Coal 1 ISEP Demand in MW

21. CAPTURING THE POWER OF NATURE Why ISEP? Cheapest energy 10% < C.F. < 50% Operational flexibility Enhance value of wind energy Protect against high gas prices Protect against carbon tax

22. CAPTURING THE POWER OF NATURE Technology Conventional Combustion Turbine Expander Output103 MW Compressor Load -59 MW Gross CT output 44 MW

23. CAPTURING THE POWER OF NATURE CAES Machine Expander Gross Output103MW Air Flow optimization 9MW High Pressure expander 22MW CAES Gross Output134MW

24. CAPTURING THE POWER OF NATURE Thermodynamics CAES 1 kWh out = 0.75 kWh in plus 4400 Btu fuel With wind driving compression Total heat rate = 6900Btu/kWh (HHV) F Class CT Simple cycle 10000Btu/kWh (HHV) Combined cycle 7700Btu/kWh (HHV)

25. CAPTURING THE POWER OF NATURE ISEP A Great Fit For Algona Proven source of renewable energy Control costs by owning/investing in generation source Good for the environment Mix of generation sources helps risk mitigation Consumers/owners want us to invest in renewable energy

26. CAPTURING THE POWER OF NATURE ISEP Meeting Waverlys Renewable Goals Owned wind generation since 1991 Want storage from ISEP Renewable goal: 20% by 2020 Intermediate capacity needs ISEP helps Waverly meet its goals

27. CAPTURING THE POWER OF NATURE Why The Department Of Energy Backs ISEP Increased demand anticipated Federal mandates likely Trends, challenges, and needs point to ISEP

28. CAPTURING THE POWER OF NATURE GROWTH IN ENERGY CONSUMPTION ECOLOGICAL CONCERN DIGITIZATION OF SOCIETY TRANSMISSION CONGESTION RENEWABLE MANDATES POWER OUTAGES ELECTRICAL ENERGY STORAGE INCREASED CAPACITY FACTOR DISPATCHABILITY OF RENEWABLES HIGH POWER QUALITY SOLUTION TRENDS CHALLENGES NEEDS

29. Iowa Stored Energy Park Its The Responsible Thing To Do What Energy Customers Say… CAPTURING THE POWER OF NATURE

30. Weve Done Our Homework Talked to 600 people All lived in Dallas County A strong majority support the idea

31. CAPTURING THE POWER OF NATURE Why Dallas County Residents Like ISEP: Helps reduce/control MY household energy costs Uses a resource (wind) not being used enough Could decrease dependency on foreign energy Could decrease dependency on fossil fuels Is a clean and healthy source of energy

32. Iowa Stored Energy Park ISEP Funding So Far… Leveraged $800,000 Municipal Funds Received $3,500,000 Federal Funds CAPTURING THE POWER OF NATURE

33. Moving Forward Leaving Research Phase Entering Development Phase Research Development Construction ending 2007 -2009 2009 - 2011

34. CAPTURING THE POWER OF NATURE Conclusions ISEP Answers winds shortcomings Diversifies the portfolio Helps meet intermediate capacity needs Helps manage coming renewable mandates

35. Iowa Stored Energy Park For more information: Kent Holst ISEP Development Director 319.239.8968 kentholst@traer.net www.isepa.com CAPTURING THE POWER OF NATURE