Energy Storage - Emissions-Free Capacity
April 2011
Chris Shelton
[email protected]
www.aesenergystorage.com
Safe Harbor Disclosure
Certain statements in the following presentation regarding AES’s business operations may
constitute “forward-looking statements.” Such forward-looking statements include, but are not
limited to, those related to future earnings growth and financial and operating performance.
Forward-looking statements are not intended to be a guarantee of future results, but instead
constitute AES’s current expectations based on reasonable assumptions. Forecasted financial
information is based on certain material assumptions. These assumptions include, but are not
limited to accurate projections of future interest rates, commodity prices and foreign currency
pricing, continued normal or better levels of operating performance and electricity demand at our
distribution companies and operational performance at our generation businesses consistent
with historical levels, as well as achievements of planned productivity improvements and
incremental growth from investments at investment levels and rates of return consistent with
prior experience. For additional assumptions see the Appendix to this presentation. Actual
results could differ materially from those projected in our forward-looking statements due to risks,
uncertainties and other factors. Important factors that could affect actual results are discussed in
AES’s filings with the Securities and Exchange Commission including but not limited to the risks
discussed under Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2008, as well as our other SEC filings. AES undertakes no obligation
to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.
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© 2010 The AES Corporation, All rights reserved.
AES Energy Storage has 20 MW in operation serving two customer
segments with another 64 MW in construction across 3 sites.
Capacity Release for Generators
COD:
Size:
Revenue Model:
Commercial Availability.:
Reserve Capacity for Utilities and LSEs
12 MW
Los Andes, Chile
8/20 MW
Johnson City, NY
(in operation)
(in operation/construction)
Dec-2009
12 MW
94 GWh energy sales/year
100%
COD:
Size:
Revenue Model:
Commercial Availability.:
Dec-2010/1H-2011
8/20 MW (DOE LG)
Reg. Capacity Sales (NYISO)
>95%
20 MW Angamos, Chile
32 MW Laurel Mtn Wind Project, WV-US
(in construction)
(in construction)
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Capacity Release for Generators
Reserve Capacity for Utilities and LSEs
© 2010 The AES Corporation, All rights reserved.
The AES diverse portfolio of assets and broad market
footprint provide the market insight & credibility to create an
energy storage business.
1,755 MW Wind
Generation in the
United States
An industry leader in…
37 MW Solar PV
Generation in the
Europe
Independent Power Production
Project Finance
Carbon Offsets
International Privatizations
Deregulation
Solar PV
132 Power plants worldwide
totaling approximately 40 GW
gross generation capacity
100 million people
are served with
AES electricity.
Fuel Type
Renewables
14 Utilities worldwide,
serving 11 million
customers, with sales of
77,000 GWh
41%
5%
33%
Gas
Note: As of October 2010
Coal
21%
Other
Thermal
Geography
Asia &
Middle East
13%
Europe,
CIS &
Africa
Latin
America
26%
27%
34%
North America
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© 2010 The AES Corporation, All rights reserved.
AES Energy Storage – Flexible Capacity & Reliability Services
Our Business:
•
•
•
•
Develop, own & operate grid-scale storage
Serve markets, utilities, and renewable developers with capacity related services.
84MW in operation & construction, 500MW in near-term development.
AES has experience working with utilities and operators in 29 countries.
Our Value:
• Reduce operating costs, improve revenue streams for
our customers.
• Improve efficiency and reliability of systems we serve.
• Reduce environmental footprint of electric supply.
• Enable higher penetration of variable renewable
sources.
• Manage project deployment, operations, and lifecycle
technology risks.
Our Perspective:
• Tech agnostic; use multiple technologies in our
portfolio.
• Storage is a system resource (and should not be
forced into renewables).
• Scalability of storage solutions enables new planning
and deployment models.
• Significant cost decline in storage solutions will
significantly change the power sector.
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© 2010 The AES Corporation, All rights reserved.
What is electric “power” ?
Really?
electric power –
“energy generated through the conversion of
other forms of energy, such as mechanical,
thermal, or chemical energy.”
Source: Encyclopedia Britannica, 2008
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© 2010 The AES Corporation, All rights reserved.
What is electric “power” ?
Score one for new media!
electric power –
“the rate at which electric energy is
transferred. Electric power is measured by
capacity and is commonly expressed in
megawatts (MW).”
So, flexible capacity (MW) allows us to control the flow of electricity.
Source: whatis.com
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© 2010 The AES Corporation, All rights reserved.
Which sources do we depend on for our electric power
capacity (MW, not MWh)?
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© 2010 The AES Corporation, All rights reserved.
How do our MWs rate on emissions and flexibility?
Nuclear
EmissionsFree
(10%)
DR*
Wind
Geothermal
Solar
Hydro*
(10%)
(<5% combined)
Capacity
Emissions
Profile
Emissionbearing
Coal
(30%)
Inflexible
*Limited siting for Hydro, limited scale for DR.
Nat. Gas
Diesel (40%)
(6%)
Flexibility Profile
Highly Flexible
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© 2010 The AES Corporation, All rights reserved.
Planned capacity additions are primarily from emissionsbearing and/or inflexible resources.
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© 2010 The AES Corporation, All rights reserved.
Energy storage meets two pressing goals of electric power
policy simultaneously: reduce emissions and ensure
reliability.
Nuclear
EmissionsFree
(10%)
Energy
Storage
DR*
Wind
Geothermal
Solar
Hydro*
(10%)
(<5% combined)
Capacity
Emissions
Profile
Emissionbearing
Coal
(30%)
Inflexible
*Limited siting for Hydro, limited scale for DR.
Nat. Gas
Diesel (40%)
(6%)
Flexibility Profile
Highly Flexible
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© 2010 The AES Corporation, All rights reserved.
Peak to off-peak swing is 40% of total capacity in PJM on the
peak day; average capacity factor of CCGT in U.S. is 43%.
40%
Storage means we will use our growing CCGT
fleet to its fullest.
Source: PJM, EIA
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© 2010 The AES Corporation, All rights reserved.
Advanced energy storage solutions are more flexible and
precise than the grid’s best fossil solutions.
“Ideal regulation capacity is 2.7 times more efficient than the average combustion turbine capacity.”
Makarov, Y.V. Assessing the value of Regulation Resources Based on Their Time Response Characteristics.
http://certs.lbl.gov/pdf/task-2-4-regulation-resources.pdf
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© 2010 The AES Corporation, All rights reserved.
The jobs advanced energy storage projects are performing
today are technically the most demanding, therefore the
technology is nearly vetted for all future applications.
Intensity Key:
C/2 – C/6
low throughput
Up to 1C
Up to 4C
moderate throughput
high throughput
Installed Capacity
Area Regulation
Operating Reserves
Electric Supply
Synchronized Reserves
Load Following (AGC)
Renewable Supply Following
Minimum Generation Support
(Nuclear, Other)
Arbitrage
Upgrade Deferral (rate case deferral)
Grid Storage Benefits
Transmission & Distribution
Congestion Management
Volt/VAR Management
Island Support
Peak Demand Management
Time of Use Management
Electric Demand
Reliability
Voltage
Power Quality
Other
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© 2010 The AES Corporation, All rights reserved.
A battery based peaking capacity solution is more economic
than traditional technology.
Project Cost/Benefit vs. New LM6000 on LI ($/kWmonth)
Energy Storage can compete with traditional
peaking capacity solutions.
Several distinct and unique benefits create
compelling solution.
Global project opportunities for a 4hr product.
AES Emissions
Free Capacity
Modularity /
Scaling
Benefits
Lower Energy Environmental
Cost (vs.
Benefits (Solar
LM6000)
Equivalent)
Distributed
Deployment
Benefits
Effective
Project Costs
© 2010 The AES Corporation, All rights reserved.
Energy storage can play a complementary role to all of the
existing resources in the supply portfolio.
• No local emissions from the facility.
• The most flexibility to support reliability needs and high penetration
for renewables at system level.
• Ability to create load to maintain or increase the value of nuclear,
wind, and low CF CCGT.
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© 2010 The AES Corporation, All rights reserved.
Comprehensive policy and regulatory support for emissionsfree, flexible capacity from energy storage is needed.
• Incentives: Full ITC (investment tax credit) treatment for energy
storage to level the playing field with other emissions-free grid
resources (such as solar).
• Planning: RPS (renewable portfolio standard) programs should
consider capacity in addition to energy and plan for coordinated
deployment goals.
• Market Updates: Market mechanisms should reward flexibility and
precision in “pay-for-performance” models.
• Financing: Regulators should encourage long-term contract
structures from markets and utilities for emissions-free, flexible
capacity resources.
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© 2010 The AES Corporation, All rights reserved.
By the way… history shows that the previous wave of
inflexible resources (nuclear) had some flexible
counterparts (pumped hydro) added in step with them.
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© 2010 The AES Corporation, All rights reserved.