OPPORTUNITIES IN ENERGY

John R Bryan Director, Energy Systems 424-258-4572 jrb1165@gmail.com

From Mechanical Power to Electrical Power

A M

ILITAR

Y SW

ITCH

ING

FRO

M C

OA

L TO O

IL Strategic Change in Transportation Fuels

WIN

STON C

HU

RC

HILL – 1874 TO

1965 Power was more important than local supply

=

Prime Minister of the United Kingdom

during WWII May 10, 1940 - July 26, 1945

SH

IFTING

FRO

M M

ECH

AN

ICA

L TO E

LECTR

ICA

L Compare Coal to Oil and Fuel to Electricity

Fuel is a form of

Energy Storage

ELEC

TRIC

ITY AS A F

UEL IS E

CO

NO

MIC

ALLY S

TABLE

Comparing the Price of Oil and Electricity

$0.00  

$0.50  

$1.00  

$1.50  

$2.00  

$2.50  

$3.00  

$3.50  

$4.00  

$4.50  

Jan  1976   Jan  1980   Jan  1984   Jan  1988   Jan  1992   Jan  1996   Jan  2000   Jan  2004   Jan  2008   Jan  2012  

Dollars  per  Gallon  (Equivalent)  

NaBonal  Average  Monthly  Gasoline  Retail  Price  v.    Monthly  ResidenBal  Electricity  Price*  

ResidenBal  Electricity  Real  Price  Jun  2012   Gasoline  Real  Price  Jun  2012  

*Based on a plug-in electric vehicle with an efficiency of 3.4 miles per kWh and an internal combustion engine vehicle with a 30mpg rating. Source: Energy Information Administration, Short-Term Energy Outlook, June 2012. Data compiled, converted, and presented by the Edison Electric Institute.

Forecast

Iran-Iraq war starts

Iranian Revolution, 1979 Energy Crisis

‘80 Recession

‘81-’82 Recession starts

Crude Oil Price Collapse

Asian Financial Crisis

‘01 Recession

US Invades Iraq

Hurricane Katrina

‘07-’09 Financial Crisis starts

Hurricane Rita

Hurricanes Ike & Gustav

??? Iraq invades Kuwait, 1990 Oil shock

Middle East Revolutions & Civil Wars

Iran Threatens Strait of Hormuz

STR

ATEG

IC R

ISKS TRU

MP S

HO

RT TER

M E

CO

NO

MIC

S Oil Supply Lines create National Security Risks Climate Change creates National Security Risks

…from FY 2003 to FY 2007 in Iraq and Afghanistan, a total of more than 3,000 Army personnel and contractors were wounded or killed in action from attacks on fuel and water resupply convoys. According to U.S. Transportation Command (USTRANSCOM), ground convoys were attacked 1,100 times in 2010 …. http://energy.defense.gov/Portals/25/Documents/Reports/20110614_Operational_Energy_Strategy.pdf

http://www.bp.com/content/dam/bp/pdf/Energy-economics/statistical-review-2014/BP-statistical-review-of-world-energy-2014-full-report.pdf

MA

JOR U

S OU

TAG

ES CR

EATE E

CO

NO

MIC

LOSSES

Modern Life is Impossible without Electricity

3 Days without Electricity halts 80% of all Economic Activity

•  Energy security is a national priority regardless of a defined policy

•  Products providing energy security have reached grid and fuel parity

•  Distributed generation improves stability and equal access to advanced services

Access to Electricity has become a Societal Need; equal access is a ethical imperative.

EN

ERG

Y FLO

WS IN TH

E UN

ITED S

TATES

2008 to 2013

https://flowcharts.llnl.gov/

EN

ERG

Y FLO

WS IN TH

E UN

ITED S

TATES

2008 to 2013 for All USA Energy Use (not just electricity)

2008 to 2013 (in Quadrillion BTU - visually equivalent to kWh of energy)

2008 2013 Total: 99.2 to 97.4 ê 2% Rejected: 57 of 99 (57%) to 59 of 97 (60%) Solar: .09 to .32 é 355% (does not include distributed self generation)

Wind: 0.51 to 1.60 é 313% Nat Gas: 23.8 to 26.6 Coal: 22 to 18 ê 18% Petro: 37 to 35

https://flowcharts.llnl.gov/

THE G

RID R

EQU

IRES B

ALA

NC

E AT A

LL TIMES

Electricity Generation and Consumption is a Continuous Balancing Act

Grid

Services

CLA

SSIC E

LECTR

ICA

L EN

ERG

Y RU

NS O

N STEA

M

Spinning Magnets Make Electricity

Power

Time = Energy

ELEC

TRIC

AL E

QU

IPMEN

T IS SEN

SITIVE TO

PO

WER Q

UA

LITY Quick Responding Energy Storage Provides Ride Through Protection

REA

L WO

RLD G

RID C

ON

TRO

L IS DYN

AM

IC

Power Stability is Continuous Process and Must Be Stable at ALL Points of Use

“DU

CK C

HA

RT” FR

OM

DISTR

IBUTED S

OLA

R Hourly Ramp Rates are Too Fast for Conventional Power Plants

GEN

ERA

TOR R

AM

P EFFIC

IENC

Y (LOW

ER EM

ISSION

S) Storage Acts like a Prius or Hybrid Automobile Engine Efficiency Support

y = 9727.7x-0.579 R² = 0.98246

-

10,000

20,000

30,000

40,000

50,000

60,000

$-

$0.05

$0.10

$0.15

$0.20

$0.25

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

He

at R

ate

(BT

U/k

Wh)

Fue

l Co

sts

pe

r kW

h ($

/kW

h)

He

nry

Hub

Sp

ot P

rice

of $

3.41

on

11/9

/201

2

Percent of Plant Power Rate (% of MW) - 16MW Natural Gas Combustion Turbine

Fuel Cost per kWh

Heat Rate (BTU [LHV] / kWh)

Power (Heat Rate (BTU [LHV] / kWh))

LESS OF THIS

MORE OF THIS

Optimal Operating Zone Large Spinning Generators

(cost/usage rate)

PEA

K INFR

ASTR

UC

TUR

E IS BECO

MIN

G LESS E

FFICIEN

T Storage Provides a Local (Cheaper & Faster) Responding Grid

Since the mid-1990’s U.S. generation capacity has increased 50% while net consumption has declined 20%. To maintain profits, utilities nationwide are raising their demand rates (kW) charged to U.S. businesses.

47% 46% 46%

47% 47% 45%

43%

38% 38% 38% 38% 37% 37%

38%

30%

35%

40%

45%

50%

55%

60%

65%

-

0.200

0.400

0.600

0.800

1.000

1.200

1997 1999 2001 2003 2005 2007 2009

Ave

rage

Hou

rly U

tiliz

atio

n (a

vera

ge k

W/m

ax k

W)

Tota

l US

Grid

in T

eraw

atts

Usa

ge (1

M k

W)

Peak Generation Average Daily Demand Capacity

http://www.eia.gov/electricity/capacity/

GEN

ERA

TION P

LAN

T REPLA

CEM

ENTS

$0.5 Trillion in Aging Energy Generation Plants

2008 Generation Technology

Average Age

Nameplate Capacity

Number of Units

Average Unit Size

Cost to Replace ($/Watt)

Operating Costs

($2008 mills/kWh) Over 40 Needed Investment

Coal 45 337,300 1445 233 $2.22 $4.69 153,952 $342,305,224,536

Natural Gas 25 454,611 5467 83 $0.69 $3.65 87,447 $59,957,692,725

Nuclear 32 106,147 104 1,021 $3.82 $0.51 12,904 $49,302,446,886

Petroleum 31 63,655 3768 17 $0.98 $2.11 24,820 $24,419,255,385

Pumped Storage 38 20,355 151 135 $2.29 $2.49 4,466 $10,238,775,360

Wood and Wood Derived Fuels 35 7,730 353 22 $3.84 $6.86 2,368 $9,083,920,161

Other Gases 41 2,262 102 22 $2.60 $0.01 1,000 $2,600,620,020

Other Biomass 13 4,854 1412 3 $2.60 $0.01 202 $524,440,170

Other 37 1,042 49 21 $1.40 $7.28 300 $419,789,790

Geothermal 23 3,280 228 14 $1.75 $- 220 $384,846,000

Wind 10 24,980 494 51 $1.97 $- - $-

Solar Thermal and PV 8 539 89 6 $2.50* $- - $-

Hydroelectric Conventional 62 77,731 3996 19 $2.29 $2.49 58,479 dams live forever

Totals 1,104,486 17,658 346,157 499,237,011,033

* All Dept of Energy’s EIA Data from 2008 PV Installed Cost from Sept 2012 Includes No Subsidies or Support Federal Support Decreases $/Watt by 30%

TRA

NSM

ISSION B

ALA

NC

E BETWEEN C

ON

TRO

L AR

EAS

Storage reduces the need to spinning reserves and their increased emissions

http://www.eia.gov/todayinenergy/images/2012.06.14/CaliforniaMap.png

INSTA

LLED CO

ST OF P

HO

TOV

OLTA

ICS

Providing Renewable Energy with Controllable Power

LEVELIZED C

OST O

F EN

ERG

Y (CA

PITAL +

OPS)

Providing Renewable Energy (Distributed / Roof Top Solar Power) with Controllable Power

7 12 17 22 27 32 37

Ha

wa

ii C

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.S. T

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inn

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isso

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EIA's Table 5.6.A. Average Retail Price of Electricity to Ultimate Customers by End-Use Sector (Commercial Only), October 2014

EM

ERG

ENC

Y LOA

D BA

LAN

CIN

G &

BLA

CK S

TAR

T Gaining Economic and Operations Resilience through Onsite Power

80% of All Economic Activity Stops after 3 Days w/o Power Controlled Operations Shut Down Protects Investments Emergency Operations Protect Lives and Reduce Impact Security and Telecommunications are Priority Power

2005 Hurricane Katrina’s Infrastructure Impact in New Orleans 2012 Hurricane Sandy’s Outage Impact 48 Hours Post-Landfall

BTU per Capita per Year

-20

0

20

40

60

80

100

120

140

Load Solar Output Resultant Load

STO

RA

GE IS TH

E APPLIC

ATIO

N OF A

LGO

RITH

MS

Providing Renewable Energy (Distributed / Roof Top Solar Power) with Controllable Power

While solar is inexpensive in Hawaii, California, Alaska, New York, and Connecticut, it fails to provide a reliable reduction in demand charges (kW) Average Reduction is 32% of Nameplate kW(AC) Standard Deviation is 16%

(e.g. 5% of the time Solar provides 0% Reduction) Solar’s already positive economics can be improved

with a source of dispatchable energy

FEW

IND

ICA

TIVE D

ATA P

OIN

TS ON B

ATTER

Y CO

STS The Cost of Storage is Declining like Moore’s Law (and Double the Life Span)

R² = 0.97105

$-

$150.00

$300.00

$450.00

$600.00

$750.00

$900.00

$1,050.00

$1,200.00

$1,350.00

$1,500.00

$1,650.00

$1,800.00

$1,950.00

$2,100.00

$2,250.00

$2,400.00

$2,550.00

$2,700.00

Lithium Iron Phosphate (LiFePO4) Delivered Battery Module Costs ($/kWh)

Corporate Purchases for Actual Purchased Li-Ion Batteries

-20

0

20

40

60

80

100

120

140

Load Solar Output Resultant Load

RED

UC

ING

PEA

K LOA

D WITH S

OLA

R + S

TOR

AG

E Providing Renewable Energy with Controllable Power

45%

Red

uctio

n w

ith

200

kWh

Reduces peak monthly load by 50% (60kW controlled discharge of 200kWh of stored energy over 90 minutes)

Solar Peak Reduction

Storage Peak Reduction

CO

MM

ERCIA

L BILLS / IN

VO

ICES H

AV

E TWO

PA

RTS Utilities and Regulators set Energy and Demand Rate Tariff Policy (Residential is Different than Commercial or Industrial)

“Pipe” = Monthly Peak as Demand Charges in $/kW “Use” = Expenses or Energy in $/kWh

Improving Either “Pipe” or “Use” reduces cost

55% “Use” $0.032 / kWh

45% “Pipe” $15.07 / kW

Sim

ple

Exa

mp

le fr

om

Fo

rt C

ars

on

, CO

DISTR

IBUTED S

YSTEMS A

RE M

OR

E EFFIC

IENT

Solving Local Needs and Providing Regional Services

*

* A single $65,000 (all-inclusive, w/o incentives) energy storage system can save up to $8,000 per year. Adding a single electric vehicle fast charger can also increase electricity costs by another $5,000 per year…each.

INC

REM

ENTA

L CO

STS FOR M

AJO

R RISK R

EDU

CTIO

N Gaining Economic and Operations Resilience through Onsite Power

Project Basics 200 kW of Solar + 400 kWh of Storage $1,140,200 Total Investment Inverter and Installation Cost Share $3.63 / Watt PV w/ ½ Shared Costs $1,034 / kWh Storage w/ ½ Shared Costs vs $3.85/kW and $1,140/kWh each Combined Return Achieves >15% IRR but ALSO provides Additional Benefits Backup Critical Load Panels Extended Emergency Operations Security and Telecommunications

IND

USTR

Y GR

OW

S BY RED

UC

ING

TECH

NO

LOG

Y RISK

Scaling Beyond the Pilot with Low Risk Distributed Generation Investments

Grants and Policy Build Markets Initial Deployments with SGIP Growth through 30%ITC Markets Integration for Grid Stability

0

10,000

20,000

30,000

40,000

50,000

60,000

2012 2013 2014

Deka 3

Ojai Energy 4

Trojan Battery Company 5

GS 5

Global Energy Storage 5

Princeton Power Systems 15

Thermodynamic Industries 30

MCV Technologies, Inc. 30

JLM Energy 43

Concorde Battery Corporation 41 3

Outback Power 26 34

Clean Energy Storage, Inc 72

Sharp 30 60

Aquion Energy 95

ETM Electromatic 100

OES 116

Samsung 120

QESC 300

Saft 566

Danko Enterprises 600

Sunverge 660 34

UET 1,000

Ashlawn Energy LLC 1,000

GE Energy 1,500

REP Energy/Eaton Crop 1,722

Desert Power 2,000

CODA Energy 620 2,645

ZBB Energy 4,000

Green Charge Networks 469 3,834

Stem Inc 4,296 614 4,456

Tesla 12,685 7,320 40,340

Wa

tts o

f SG

IP F

und

ing

Self Generation Incentive Program (SGIP) Committed Incentive

ISO Market Integration

No PPA or Contracts

Competitive Bidding

Renewable Investment Tax Credit

30% Tax Incentive

>85% kWh from Generator

Self Generation Incentive Program

60% Cash Grant $77M Cap

SU

MM

AR

Y OF S

TOR

AG

E’S IMPA

CT

10 Storage Services noted Today (others available)

Today’s Noted Values to Grid Connected Energy Storage Systems Replacing old coal plants is a $340B effort over 10 years. Some part of that will be renewables and storage. 17 Companies Added 40MW of Local Energy Storage in 2014 in California alone. Utility or Centralized Energy Storage Deployed in Multiple Sites around the globe. NYC will decentralize energy. Department of Defense Deploying Energy Storage Globally to reduce security risks to warfighters.

Qua

lity

Sta

bili

ty

Fue

l

Emis

sio

ns

Sec

urity

Pea

k

Ca

pa

city

Sub Second Power Quality þ Over Voltage Circuit Protections þ Under Voltage Circuit Protection þ Stable and Reduced Transportation Budgets þ þReduce System Wide Energy Waste þReduce Dependence on Long Fuel Supply Lines þReduce Grid Infrastructure Capital Requirements þControl Renewable Energy Generation to Reduce Off Generation Emissions

þ þ

Provide Emergency Backup Power þReduce the Costs of Local Infrastructure and Lower Utility Bills þ

NEA

R EN

DLESS O

PPOR

TUN

ITIES TO M

AKE A

N IMPA

CT

Make Money

Billions of Money in Infrastructure Deployments Billions of Money in Fuel Savings Billions of Money in Operational Savings Replace Existing Control Systems Provide New Services and Systems to Compete

Make a Difference

Improve Security of Existing Grid Reduce Emissions to Improve Health Invest in Grids that have poor power or energy Implement Fairness Policy Decisions

Build Policies to Control the Other Two

Control Duplication of Infrastructure Investments Provide Fairness of Capital Return vs Risks Enable Growth of Technologies Provide Appropriate Retirement of Existing Public Good

Energy Creates Civilization

These are not mutually

exclusive!

FROM MECHANICAL POWER TO ELECTRICAL POWER

John R Bryan Director, Energy Systems 424-258-4572

jrb1165@gmail.com