ENERGY STORAGE: ENABLING RENEWABLES ON ISLANDSA TECHNOLOGY PLAY TO ACCELERATE THE ZERO-CARBON TRANSITION “AS-A-SERVICE”

5 JULY 2019

1

HIGHLIGHTS 3

11

15

5 JULY 2019

ENGIE EPS PROJECTS

ISLANDED MICROGRIDS IN A NUTSHELL

AGENDA

19CHALLENGES

!3

HIGHLIGHTS

+ 521,000People powered every day

23 countries

N.1 Worldwidein off-grid microgrids

by number of projects (BNEF)

0301 0502 04

14Nationalities

100+ Employees

30% PhD/MBA

WHERE WE ARE TODAY

130Patents and application 95% filed internationally + 500Trade secrets 90% in registered form

150% CAGRRevenues

> 30%Spent in R&D and Innovation176MW

Total Installed Capacity Of which 111MW/65MWh Microgrid & Grid Support

!4

!5

Present in 70 countries of the world

with 160.000 employees

Leader in energy transition towards

zero CO2 emissions

ENGIE is active in Italy throughout the energy and energy efficiency supply chain

with over 3,300 employees

Rank Company Score

1 ENGIE 81.4

2 ABB 76.0

3 Optimal Power Solutions 75.6

4 Schneider Electric 75.0

5 EDF 72.2

6 Caterpillar 67.4

7 OutBack Power 65.8

8 Husk Power Systems 62.6

9 Powerhive 59.9

10 Larsen & Toubro 52.6

11 PowerGen Renewable Energy 50.1

12 juwi 48.3

“ENGIE most important acquisition related to the remote microgrid space is a

majority stake purchase of Electro Power Systems of Italy, now rebranded as

ENGIE Eps”

Navigant Research. 1Q 2019

OUR POSITIONING IN THE MICROGRID MARKETN. 1 WORLDWIDE, AHEAD OF INDUSTRIALS AND ENERGY PLAYERS

!6Source: Navigant Research Leaderboard: Remote Microgrid Players , 1Q 2019

The Navigant Research Leaderboard Overall Scores for remote microgrids

ENGIE EPS MARKET POSITIONING IN OFF-GRID MICROGRIDSN. 1 WORLDWIDE BY NUMBER OF PROJECT

Bloomberg New Energy Finance, Microgrid Asset Database, 4Q 2018

Exe

cu

tio

n

Strategy

FOLLOWERS CHALLENGERS CONTENDERS LEADERS

ENGIE

ABB

Optimal Powers

Solutions

Schneider

Electric

EDF

Caterpillar

PowerhiveLarsen &

Toubro

PowerGen

Renewable Energy

juwi

Husk Power

Systems

OutBack

Power

ENERGY STORAGE SYSTEMS APPLICATIONS AND DEFINITIONS

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ESS Grid Support

DERs Behind-the-Meter

MicrogridsIslanded Stability and resiliency in weak grids

Grid-tied

Stand-alone (Front-of-the-Meter)

Capacity firming

B2B

B2C

EV

Aggregation (Virtual Power Plants)

Energy communities

Grid/Ancillary Services (Frequency and Voltage Regulation)

RES intermittency mitigation (PV+storage)

CCGT or Coal plants ramp smoothing

V1G

Rural electrification

Ancillary Services

Domestic PV self-consumption (< 10 kW)

Peak Shaving

Demand Side Management (time-shifting / self-consumption)

Power Quality: (Voltage SAG mitigation / Harmonic compensation)

V2G

Battery Pack

Renewable Sources

SCADA and AI

Cloud based DERs, Cybersecurity and Predictive

Maintenance

SMART INVERTER

Instant RPPT/MPPT for unique microgrid performance

Generators and Power Plants

24/7 stable power supply

ENERGY MANAGEMENT SYSTEM (EMS)

Pool Algorithms & Black Start

POWER CONVERSION SYSTEM (PCS)

Synthetic Inertia DROOP Control and Statism

HyESSTM Hybrid Energy Storage System

BATTERY MANAGEMENT SYSTEM (BMS)

For all battery chemistries

PROPRIETARY ENGIE EPS TECHNOLOGY covered by 130 patents and 500+ trade secrets

Microgrids

Energy Storage Systems

CO

MM

OD

ITIE

S

HYDROGEN MANAGEMENT

SYSTEM

Power2Power for long term storage without fossil fuels

A VERTICALLY-INTEGRATED TECHNOLOGY PLATFORM

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!9

Grid Support

Energy storage to support renewable

penetration in developed economies

Independent Power Generation

and weak-grids stabilization, enabling

renewables in emerging markets

!9

OUR ADDRESSABLE MARKETS SINCE 2015

ENERGY STORAGE MICROGRIDS65%100%

940 GW global to 2040*

340 GW Europe

to 2030

100%

630 GW global to 2017

15 GW Annually

27%

30%

4%

39%

7%

8%

68%

17%

2%

93%

5%

OUR ACHIEVEMENT: 175MW OF SOPHISTICATED TECHNOLOGY

Grid-Support Solutions* Energy Storage

APAC Europe Africa Americas

111 MW 65 MW 84 MWh

* including utility scale and behind-the-meter solutions Source: data as at 01.04.2019, including systems in Backlog to be manufactured in 2019 with COD exp. in 2020!10

Microgrids and Solar-plus-storage

generation capacity

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ISLANDED MICROGRIDS IN A NUTSHELL

ISLANDED MICROGRID CONCEPT

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The installation of a renewable + storage system in an islanded microgrid allows to:

● Displace the old and expensive diesel generation capacity, which has a huge impact on the local pollution;

● Reduce the electricity cost by fully exploiting the cheaper solar and wind generation capacity;

● Optimize the dispatching of the diesel generators through the addition of a customized Energy Management System, reducing the operation and maintenance costs;

● Reduce significantly the environmental impact of the energy production.

Localized DG:

Local gensets which constituted

the only available electricity

source on the island

Solar PV

Solar plants allow you to generate

electricity from the sun, at a much

lower cost

The distribution:

The energy produced by the microgrid

is distributed to the existing loads

Energy storage :

Energy storage is installed to store

excess solar energy, provide grid

stabilization and spinning reserve

Energy management system:

The implementation of a smart

management system can optimize the

dispatchment of the different sources

STORAGE SYSTEMS SECURING STABILITY AND RESILIENCE

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Energy storage systems secure the smoothing of renewable’s intermittency and at the same time provide 4 specific additional services:

● Grid stability, like frequency and voltage regulation, both in on-grid and off-grid mode;

● Dynamic power management for both generation and load shifting;

● Resiliency, enabling fault management and black start, facilitating protection selectivity, including backup power and disaster recovery capabilities;

● Seamless operations , transit ioning between on-grid and off-grid operation, as well as between diesel and renewable power.

3MW

ENERGY STORAGE SYSTEM: A FLEXIBLE APPLICATION

ACDC

FOLLOWING

ACDC

HYESS

ACDC

HyESS

1MW

2MW

ACDC

FOLLOWING

ACDC

FOLLOWING

ACDC

FOLLOWING

ACDC

FOLLOWING

ACDC

FOLLOWING

ACDC

FORMING

(+) Rotating Inertia

Rotating Inertia

2MW

3MW

3MWp

1MWh-1C

Full Virtual

Inertia

+1MW

2.5MVA

Intermittent solar requires

additional spinning reserve

which increases DG inefficiency,

maximizes fuel consumption, and

offset the low-cost solar power.

Storage with “Following” inverters

just minimize the PV intermittency

but do not manage spinning

reserve. DGs on at full speed

despite PV installed..

Storage with “Forming” inverters do

not allow DGs running, full spinning

reserve shall be managed by an

oversized storage capacity.

HyESS enable spinning reserve

sharing between DG and storage,

limiting the DG to a base-load flat

running at the efficiency point,

and following load peaks with

storage

1DG running flat at the efficiency point

DGs under stress

DGs not efficient

+0.5MW

(–) Rotating Inertia

Synthetic Inertia

peak load 2.5MW

max load insertion 2MW

DG ramp: 1.5MW (60%)

2 DG Installed (5MW)

running at partial load,

with high inefficiency

and heavy fuel

consumption

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2MW

DROOP Control set-point

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ENGIE EPS PROJECTS

GIANNUTRI – FIRST ITALIAN SMART ISLAND

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ENGIE EPS has supplied a 0.7 MW microgrid to the Italian island of Giannutri in the context of the Smart Island project promoted by Terna. The microgrid is composed by:

● 62.7 kWp roof-mounted solar plant;

● 125 kW / 137 kWh Energy Storage System, integrated with the PV plant through the EPS’ proprietary technology inverter C-HPP125;

● 4 existing diesel generators, which have been integrated through ENGIE EPS proprietary EMS in order to optimize the microgrid dispatchment;

● The project targets a 30% renewable penetration with the existing generation mix; a second phase is also forecasted, which aims to increase the renewable penetration through the addition of solar, batteries and possibly hydrogen.

LIFOU, NEW CALEDONIA – A STEP TO ENERGY INDEPENDENCE

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ENGIE EPS is contracted to supply a 5.4 MW / 5.07 MWh Energy Storage System to the island of Lifou – New Caledonia. The ESS will be integrated in the existing microgrid presenting the following features:

● 1.2 MW average load, 2.4 MW peak load;

● 1.3 MWp solar plant operating, which are planned to be expanded up to 5.4 MWp in two different phases;

● 275 kW wind turbines operating, which will be increased up to 825 kW in the next project development phase;

● Biofuel generators for providing capacity to the system, minimizing the environmental impact;

● The project aims to reach >90% of renewable penetration by the end of 2020.

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SELECTED REFERENCES ON ISLANDS

Tasmania, Flinders Island 3MW Microgrid

Maldives 10MW in 2 Microgrids

Singapore, Semakau3MW Microgrid

Italy, Ginostra 2 MWh H2 enabled Microgrid

East Africa, The Comoros 22MW in 2 Microgrids

In Operation

Under Construction

Italy, Terna Storage Lab4MWh Grid Support

New Caledonia, Lifou15MW Microgrid

Italy, Giannutri 0.7 MW Microgrid

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CHALLENGES

CHALLENGES TO THE ENERGY TRANSITION ON ISLANDS

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The need of completing the energy transition towards the 100% renewable penetration on islands still faces some important challenges that must be properly assessed:

● Availability of space for the renewable infrastructure, which may be not sufficient to reach a high renewable target without a contribution from liquid or gaseous fuels;

● Landscape regulations that may significantly affect the feasibility of some technologies, especially wind turbines;

● Seasonality of renewable sources and load, affecting the optimal mix.

Increasing the exploitation of renewable sources that can provide capacity to the system – such as biofuels –, without increasing abruptly the energy marginal cost.

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Forward-Looking statements

Price sensitive and confidential information

ENERGY STORAGE: ENABLING RENEWABLES ON ISLANDS® are internal publications of ENGIE EPS strictly and exclusively reserved to the members of the Board of Directors and the statutory auditors of ENGIE EPS, not to be disclosed externally. This document and any information contained therein are strictly privileged, price sensitive and confidential. This document and any information contained therein cannot be sent, copied, reproduced, distributed, released or disclosed, directly or indirectly, in whole or in part, to any person (whether internally or externally to your company) other than the addressees of the email to which this document is attached or the person authorized to download it or to work on it. Non-compliance with these restrictions will result in the violation of legal restrictions in any jurisdiction in which the ENGIE EPS is active.

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