Emerging Energy Storage Business Models INTERSOLAR & EES SUMMIT - - PowerPoint PPT Presentation

Emerging Energy Storage Business Models

INTERSOLAR & EES SUMMIT USA EAST APRIL 4, 2018 | NEW YORK Powered by: EDF Renewables Distributed Solutions

Generation Networks Customers

Nuclear power, gas and coal, renewables Transmission Distribution Customer service Trading

3 business Segments

Listed on the Paris stock exchange (Euronext). The Group is 84% owned by French Government. Generation Installed capacity

619 134

TWh GW

Nuclear power Gas and coal Renewables

8 % 14 % 78 % 21 % 25 % 54 %

EDF = ELECTRICITÉ DE FRANCE S.A.

World’s largest electricity company

87% CO2 free generation

US$88 Bn Sales

 US$33 B market capitalization  A3 credit rating by Moody’s  37 million Customers  160,000 Employees  Operating in 21 countries

Renewable Energy Powerhouse Financial Strength

 134 GW installed  619 TWh generation

Electricity Production

Global Experience - Including Energy Storage

• Experts in electricity markets
• 330MW/824MWh of storage in operations
• Financing for battery storage projects
• Battery Storage operations for maximum revenue opportunities
• Project Development expertise
• Offices throughout North America and Mexico

3

EDF RE Confidential

4 US$33 billion market cap A+ Investment grade credit

EDF RE Confidential

Storage Costs Following Similar Pattern as Solar

Source: Goldie-Scot, L.. (2014) “European End-User Storage: A Battery In Every Home?”, BNEF.

St Storage Cos Cost t an and Volu

• lume Trend

Battery Cost ($/kWh) Annual Battery Production (GWh)

• Cost inflection point reached in 2012
• Inflection point to high growth expected in the next

few years

The Energy Storage Opportunity

California Leading the Way

500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 5.000 0:00 0:45 1:30 2:15 3:00 3:45 4:30 5:15 6:00 6:45 7:30 8:15 9:00 9:45 10:30 11:15 12:00 12:45 13:30 14:15 15:00 15:45 16:30 17:15 18:00 18:45 19:30 20:15 21:00 21:45 22:30 23:15

• riginal

with storage

New Peak Demand

Load (kW)

Off Peak

Old Peak Demand

Peak Shaving + SGIP = Huge market Opportunity

Duck Curve - California

8

Duckling Curves - NJ customers

9

NJ Customer 1 NJ Customer 2 NJ Customer 3 NJ Customer 4

Solar & Storage Case Main Storage Use Cases

• Demand Charge Reduction
• Capacity Reduction (I-Cap)
• Transmission Reduction (I-Trans)
• Demand Response
• Frequency Regulation
• Arbitrage

4/11/2018 EDF RE Confidential 10

10 20 30 40 50 60 70 80 90 $/MWh tax RPS Losses Transmission Ancillaries Capacity Energy

Unpacking Commodity Energy Components in Deregulated Markets

11

Cost components Energy 33.83 Capacity 16.89 Ancillaries 1.29 Transmission 18.72 Losses 0.88 RPS 6.87 tax 5.2 83.68

100 200 300 400 500 600 700 800 0:00 4:00 8:00 12:00 16:00 20:00 Load (kw)

FORECASTED PEAK DAY

• With

Ba ery Without Ba ery

Discharge during a four-hour window to decrease the peak

PJM Capacity Obligation (I-Cap)

4/11/2018 EDF RE Confidential 12

100 200 300 400 500 600 700 800 0:00 4:00 8:00 12:00 16:00 20:00 Load (kw)

FORECASTED PEAK DAY

With Battery Without Battery

Discharge during a four-hour window to decrease the peak

The PJM capacity market ensures long-term reliability by procuring the appropriate amount of power supply needed to meet peak demand This cost is split between consumers according to their load coincident with PJM’s five highest summer peaks. This is the customer’s peak load contribution (PLC), and is built into the $/kWh rate customers pay for its energy EDF RE can forecast these annual peaks and manage flexible load and storage systems to discharge during these five peaks, reducing the capacity portion of the bill

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 Base period sets PLC 2018 Program Year -> 2019

• > Program Year

PSE&G Transmission Obligation (I-Trans)

4/11/2018 EDF RE Confidential 13

The cost of upgrading the transmission network is borne by PSE&G and passed on to its customers The transmission load for each customer is equal to the average of its hourly load at the time of PSE&G’s five highest hourly loads during the prior summer, multiplied by a loss expansion factor and a transmission scale factor The transmission cost is built into the $/kWh rate customers pay for its energy EDF RE can forecast these annual peaks and manage storage systems and flexible load to discharge during the peak, reducing the transmission portion of the bill

100 200 300 400 500 600 700 800 0:00 4:00 8:00 12:00 16:00 20:00 Load (kw)

FORECASTED PEAK DAY

With Battery Without Battery

Discharge during a four-hour window to decrease the peak

Storage: 2 MW – 8 MWh

4/11/2018 EDF RE Confidential 14 Revenue Stream Revenue Demand Charge Reduction $76,988 Regulation (Reg D) $621,503 Capacity Charge $1,638,171 Transmission Charge $2,139,315 Demand Response $1,418,423 Total Lifetime Savings $5,894,400

Year 1 Revenues Lifetime Revenues & Savings Project Specifications

• Commercial operation date: 12/1/2018
• Project life: 11.5 years
• Battery size: 2000 kW – 8000 kWh

Summary Lifetime Solar Plus Storage Revenues

4/11/2018 EDF RE Confidential 15

$0 $5.000.000 $10.000.000 $15.000.000 $20.000.000 $25.000.000 1MW-4hr Storage Revenue 2MW-4hr Storage Revenue

Solar Plus Storage Project Revenue

Storage - Demand Response Revenue Storage - Transmission Cost Reduction - I- Trans Storage - Capacity Reduction - I-Cap Storage - PSE&G Demand Charge Savings Storage - Regulation Revenue Solar - NJ SRECs Solar - Avoided Electricity Cost

1MW-4hr Storage Revenue 2MW-4hr Storage Revenue Solar

• Avoided

Electricity Cost $13,845,261 $13,845,261 Solar

• NJ

SRECs $3,783,544 $3,783,544 Storage

• Regulation

Revenue $525,638 $621,304 Storage

• PSE&G

Demand Charge Savings $44,501 $76,966 Storage

• Capacity

Reduction

• I-Cap

$919,789 $1,612,006 Storage

• Transmission

Cost Reduction

• I-Trans

$1,075,744 $2,105,094 Storage

• Demand

Response Revenue $867,758 $1,418,041 Total Revenues $21,062,235 $23,462,215

Key Take Aways

• 1,000

1,000 2,000 3,000 4,000 5,000 12:00 AM 12:45 AM 1:30 AM 2:15 AM 3:00 AM 3:45 AM 4:30 AM 5:15 AM 6:00 AM 6:45 AM 7:30 AM 8:15 AM 9:00 AM 9:45 AM 10:30 AM 11:15 AM 12:00 PM 12:45 PM 1:30 PM 2:15 PM 3:00 PM 3:45 PM 4:30 PM 5:15 PM 6:00 PM 6:45 PM 7:30 PM 8:15 PM 9:00 PM 9:45 PM 10:30 PM 11:15 PM

• riginal

solar production net usage

New Peak Demand

• Business models are emerging to take

advantage of multiple value streams

• Most value streams are not

contracted making financing challenging

• Solar paired with storage is a powerful

combination

• Innovation, creativity, and track

record with new business models will lead the way to widely distributed resources

• The full force of ketchup is coming!

Thank You!

Tom Leyden, Senior Director EDF Renewables Distributed Solutions thomas.leyden@edf-re.com 609-532-3642