Smart Grid Matures - Consumers want MicroGrids

1. Speaker: Terry Mohn Company: General MicroGrids Smart Grid Matures- Consumers want MicroGrids

2. About General MicroGrids • General MicroGrids, Inc (GMI) is an end-to-end solution provider for renewable energy technologies and transformational microgrid construction. • GMI’s Balance Energy intelligent energy software platform “iESP”, manages microgrid control, dispatchable renewable generation and resource control systems for campuses, industrial complexes, electric cooperatives, small communities and distribution utilities. • Safe, controllable and reliable MicroGrids integrating renewable generation are complimentary infrastructure with customer assets that increase grid reliability, stabilize long-term energy costs, and mitigate negative environmental impact. GridWise Alliance • The GridWise Alliance, founded in 2003, has developed into an organization that represents a broad range of the energy supply chain from utilities to large tech companies to academia to venture capitalists to emerging tech companies. • This variety of stakeholders gives the Alliance a unique diversity of perspectives which enables interactive dialogue between members. • Being a consensus based organization; the assortment of opinions produces deliberate and highly reflected upon resolutions to key issues

3. Overview • Capacity • Climate legislation is uncertain • Demand is increasing in spite of recession • Economic environment • Technology • Data privacy, security • Communication infrastructure • Smart grid is new with many benefits • Consumer • Going green • PV, EV, Power Meter • Sustainability

4. Capacity Climate legislation is uncertain Demand is increasing in spite of recession Economic environment

5. National Renewable Policy 2 • The U.S. Energy Information Agency (EIA) estimates that renewable energy totaled 10.51% of all U.S. energy production at the end of 2009. The Administration states that it has created or saved 640,000 jobs since January 2009. This number includes roughly 51,700 new and 11,000 saved “green” jobs since January 2009. • The American Recovery and Reinvestment Act of 2009 (ARRA) created and expanded government financing opportunities, and to date marks the Administration’s single largest effort to promote renewable energy. • The Obama Administration’s stated mandate is to increase the renewable energy percentage of the U.S.’s total energy portfolio from 7.5% to 15%, and to create 5 million new renewable energy jobs, within 3 years of taking office (or by January of 2012).

6. Price on Pollution November 2nd, 2010 • Obama has commented that some sort of “price on pollution” – specifically on this “really bad thing for the environment” (GHGs) – would speed the development of U.S. jobs and deployment of cleaner energy resources. • Obama is leaving himself plenty of room to endorse any agreement which may arise from cap-and-dividend, net-zero carbon tax or other discussions, if they come together. • The FY11 White House budget proposal retained a place holder – but no details – for a regulatory structure for GHG emissions.

7. Congressional Efforts The American Clean Energy and Security Act of 2009, “Waxman‐Markey Bill” and the Clean Energy Jobs and American Power Act, “Boxer‐Kerry Bill”

8. Legislative Outlook 25 • Climate legislation looks increasingly unlikely to pass. It may be too politically controversial in an election year, and the mid-term elections are expected to complicate the legislative agenda. As such, more states may pass their own cap-and-trade legislation to supplement the 29 states already having such programs. • Congress may take up a new comprehensive energy package that would exclude climate provisions, but include tax titles, the creation of a Clean Energy Development Agency (CEDA, the so-called “Green Bank”), extensions of various ARRA programs, and some tax and non-tax incentives to promote energy efficiency and conservation.

9. Demand for Renewables (US RPS Example)

10. Rising Energy Prices

11. PV Solar BioPower Estimated Cost of New Generation

12. Large Wind and Solar Farms NREL 2009 Report • Since 2000, renewable electricity installations in the United States (excluding hydropower) have nearly tripled, and in 2008 represent 42 GW of installed capacity. • Wind and solar PV are the fastest growing renewable energy sectors. In 2008, wind capacity installations increased by 51% and solar PV grew 44% from the previous year.

13. Non‐Wind Renewable Resources • While the Legislature made several proposals to increase non‐wind generation, none of the proposals passed. • PURA 39.904(a) sets a target of having at least 500 MW of renewable generation other than wind. • Commission Staff issued a strawman rule proposal in Project No. 35792 on January 11, 2010.

14. Economic Viability: Solar has come a long way towards reaching the grid parity goal… and it won’t stop short Levelized Cost of Energy US$/ kWh – California and Arizona Cell efficiency increase/ scale Supply / demand imbalance, tech innovation, margin compression Grid parity Source: EIA, team analysis

15. Transmission Difficult to Site Apr 4, 2010 - Chicago Tribune • The key challenge facing developers is that existing transmission lines, substations and transformers are inadequate to handle the amount of energy expected to come from wind farms • "It's easy to be green and say let's build wind but we have to think about - how are we going to deliver that?" said Thomas O'Neill, chief operating officer at Chicago-based Exelon Transmission Co., a unit of Exelon Corp. • The estimated cost to move that wind power east could range from $64 billion to $93 billion in 2009 dollars and would require 17,000 to 22,000 miles of transmission lines to be built in the eastern half of the country alone, according to National Renewable Energy Laboratory. • It isn't feasible for businesses to pay costs associated with the transmission upgrades. Many withdraw their requests to hook in once they realize the significant upgrades that would be needed, according to Midwest ISO.

16. Declining Reserve Margin

17. Technology Smart grid is new with many benefits Communication infrastructure Data privacy, security

18. Utility Impact • Increased penetration of renewable energy into the generation mix • Technology upgrades within the utility • New systemic impact occurring behind the meter • Distributed energy resources will likely become the normal state; therefore, how do we integrate: • analog-centric power system • digital-centric information infrastructure • Responding to these issues requires a new approach

19. Smart Grid – A U.S. National Priority “It is the policy of the United States to support the modernization of the Nation's electricity [system]… to achieve…a Smart Grid.” Congress, EISA 2007 “We’ll fund a better, smarter electricity grid and train workers to build it…” President Barack Obama “To meet the energy challenge and create a 21st century energy economy, we need a 21st century electric grid…” Secretary of Energy Steven Chu “A smart electricity grid will revolutionize the way we use energy, but we need standards …” Secretary of Commerce Gary Locke

20. Why Smart Grid?

21. What Will the Smart Grid Look Like? • High use of renewables – 20% – 35% by 2020 • Distributed generation and microgrids • “Net” metering – selling local power into the grid • Distributed storage • Smart meters that provide near-real time usage data • Time of use and dynamic pricing • Ubiquitous smart appliances communicating with the grid • Energy management systems in homes as well as commercial and industrial facilities linked to the grid • Growing use of plug-in electric vehicles • Networked sensors and automated controls throughout the grid

22. Technologies • Grid-wide integrated communications • Internet for the power grid • Sensing, metering, measurement • Digital two-way communication devices • Enable generation connect and disconnect • Enhance operator information • Advanced control capabilities • Computer based grid monitoring • Enables dispatch of distributed resource • Advance grid components • Energy storage • Distributed generation • Decision Support • Analytics to guide grid operators • Semi-autonomous agent software

23. Communication Network

24. Smart Grid Value Chain

25. Privacy & Security

26. Consumer Going green PV, EV, Power Meter Sustainability

27. Generation

28. Preparing for Electric Vehicles • Use of EV/PHEVs can help lower emission of pollutants, utilize less fossil fuels as the amount of wind generation in Texas grows, and help address energy security issues by reducing the amount of imported oil. • Powering a car on electricity would result in 93 percent less smog‐forming volatile organic compounds and 31 percent less nitrogen oxide emissions than powering a car on gasoline. • Operating costs of plug‐in cars are likely to be significantly lower than those of gasoline‐powered cars. • Electricity costs three to five cents per mile with average electric rates, or the equivalent of $0.75 to $1.25 per gallon of gasoline.

29. Applications

30. Changes in the Network • Consumer engagement with resources to solve power issues locally • Two-way power flow in distribution • As prices increase, local renewables will increase in residential, commercial, and industrial • Imperative to transform from passive to active control in distribution • New ways for distribution to become a transmission resource

31. Smart Grid integration of DER

32. Benefits Risks Distributed Energy Resources • Slow adoption • Lack of control systems • No history of aggregation success • Lack of incentives • Few investors • Regulatory hurdles • Lack of education Improved grid reliability “Green” alignment Improved energy use and fuel costs Improved operating efficiency Market participation New revenue sources

33. Microgrid-Based Power Systems • Distributed resources treated as an integrated and autonomous system • Localized to a customer, community or region • Smart grid applied towards balancing loads with renewable’s variable generation • Must complete energy efficiency measures • Integrate storage, load shifting, base plus variable generation with smarter grid • Participate in power, frequency and demand markets

34. Microgrid “Cells” • Multiple microgrids will emerge locally • Participate in grid and market support • They will be aggregated • They will be networked • Transactive markets will emerge • Individually, each may offer unique capabilities • Central management will emerge • Ideal for… • University Campus • Business Park • Indian Tribal Land • Municipality • Utility Distribution • Military Base • Owned by… • Customer • Developer • Utility • Investment trusts

35. Ancillary services • Aggregate markets • New business operators • Utilities are enablers • Geographically strategic storage

36. Networked MicroGrids • Neighborhood storage • Within municipality districts • Now in states where there are no franchises • As critical mass is reached on franchised utilities • Will need some changes to regulatory policy

37. Worldwide Capacity Market Sector Breakdown MicroGrid Market

38. Summary • Economic, sociologic and environmental pressures require us to examine a new energy management model • Distributed resources meet individual requirements and offer larger grid support • MicroGrids allow generation, storage, and loads to operate autonomously, balancing out voltage and frequency issues • MicroGrid cells are scalable and can be clustered locally as well as market opportunities • MicroGrids are a new commercial growth area • Competition will drive need for conforming architecture and standards

39. Thank You General MicroGrids Balancing Energy for a smarter, renewable-driven grid