ACCELERATING INNOVATION AND INVESTMENT

Microgrids: Engaging the Customer

2

Power System Slow to Change

– CCCT/CHP– Wind

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100

500

1,000

1,500

2,000

2,500

0

500

1,000

1,500

2,000

2,500

3,000

GreenCoalGasCarbon

Generation, million MWh

Carbon, billion mtons

Energy Information Association

3

Improve Competitiveness of Cities by Eliminating Waste

Waste Type Performance Wasted $, Billions

Wasted Fuel 35% Efficiency ~ $70Market Inefficiency ~ 2₵/kWh ~ $100 Outages/Repair SAIDI 2 hrs. ~ $150

Emissions Cost High CO2, SO2, NOx, HAP ~ $70

Total Waste ~$400 or 8¢/kWh

PPI Report, Grid Modernization: The Case for Empowering Consumers, Communities, and Utiltieis

4

The Pursuit of Perfection or Perfect Power

“The pursuit of new measures and perfection changes your perspective, revealing gaps in performance that were hidden; thereby enabling innovation and levels of performance not before thought possible.”

– Bob Galvin, Founder of the Galvin Electricity Initiative and Perfect Power Institute, former CEO and Chairman, Motorola, Inc.

4

5

Reading the World

• Technology• Policy• Economics• Demographics

Learning will inspire you:• Fifth Discipline• Environmental Engineering• America’s Founding Secret• The Idea of Ideas• Made to Stick

6

Perfect Power Transformation

Area SubstationLocal Substation

Central Power

Transmission

Area Substation

Smart Switch

Renewable, CHPClean DGBackup/DR

Natural Gas

Smart Switch

Microgrid

2

Systems ApproachGaining Leverage2

8

Home Automation

Advanced Meter

Energy Management System

TV, Router, Cable Box

Internet/Cloud

Mobile Devices

Applications

Backup, CHP, Solar, UPS

Smart Switch

Smart Loop

Smart Meter

10 MW

IIT Microgrid Prototype Minigrids in a microgrid

Smart Switch

Loops

10

New Products and Services

• Core power and thermal• Distribution of power and thermal• Automation and intelligence

– Distribution/substations– Buildings

• Loops, smart switches, self-healing, physical protection, cyber security

• Smart meters and intelligent aps• Master controller, intelligent monitor, trend

11

Utility is at the Heart of the Future Grid

Entrepreneurs

Customer

Microgrids/ Power Refiners

Power Suppliers

DistributionUtility

Private Invest

Rate Payer Invest

Local Government

Utility InvestmentHow will reliability be improved?

SUB

NeighborhoodWiring

Substation

Circuit 1

Circuit 2

Feeder138 or 34.5 kV

X

SUB

NeighborhoodCircuits

Substation

Circuit 1

Circuit 2

Feeder138 or 34.5 kV

XSmart

Switches

Smart Switches

After-Self Healing

SUB

Before

13

Underground Intelligent Switches

• Out of sight• Controllable

Overhead Intelligent Switches

15

Role of Private Investment• Power suppliers

– Carbon free power– Financed solar– Financed back-up generators tied to real-time

• Entrepreneurs– Home automation for demand response and EE– Financed permanent EE– Virtual home inspection and failure detection

• Microgrids– Ice storage for load shifting– Power quality refining– Island capability

Restructured electricity marketsReplace with REC Version

ELECTRICITY SYSTEM

Siemens Gearless Wind Turbine (3 to 10MW)

Gearbox Eliminated by Permanent Magnet Generator

Strategies and TechnologyGE New CCCT – 60% Efficient

GE FlexEfficiency* 50 Combined Cycle Power Planthttp://www.ge-energy.com/products_and_services/products/gas_turbines_heavy_duty/flexefficiency_50_combined_cycle_power_plant.jsp

MARIN ENERGY AUTHORITY POWER CONTENT LABEL

RESOURCES MEA 2008 CA Eligible Renewable 27% 2% Large Hydroelectric 46% 18% Natural Gas 12% 42% Coal 10% 33% Nuclear 1% 5% Other 3% 0%TOTAL 100% 100%

Wind5%

Nuc.60%

Hydro35%

IIT Power MixNo Carbon

Private InvestmentPower Supplier

Private Investment Entrepreneur

21

Home Becomes a Power Source

22

Uninterruptible Power Supplies (UPS) Units

• 60 seconds ride through• Eliminates 99% of all

power quality issues• 98% energy-efficient

Community Energy Storage (CES)

Pad-mountedTransformer CES Unit

Backup Gen

Private InvestmentMicrogrid - Princeton University

Base-load Tri-generation and district energy (in lieu of boiler)

Base-load Procurement

On-peak tri-gen

Number of hours at the demand level

Elect. Storage

Ice Storage

DR

Gas Gen

5

10

25

30

35

40

20

15

8760

Solar

On-peak Procurement

MW

25

8,7604,000500

Demand/ Price

$/Mwh

# of Hours at the Demand Level

Flatten the Curve – Lower Prices and Need for New Capacity

• Demand Response• Price Transparency• Ancillary Service Payments

• Price Transparency• Electric Vehicles

PJM secures 11 GW in DR and capacity auctions

26

Microgrid Services?

• Conserve to save money and energy• Flatten load curve to lower costs for everyone

– Leveraging technology

• Provide grid services in return for payments– Demand response, voltage support, VAR’s, capacity

• Install cleaner more efficient power to meet peek demand

• Recycle waste heat to generate power as a (turbine in lieu of a boiler)

• Improve local reliability and power quality

27

Add 2,000 MW by 2016

• Institutional/Campus • Muni/Utility Community

– Poor reliability pockets – Japan, Connecticut, Developing Countries

• Military• Remote/Off Grid• Commercial/Industrial

– Big Data – Google

• Developments/Planned Community• Virtual microgrids

28

Role of Private Investment• Power suppliers

– Carbon free power– Financed solar– Financed back-up generators tied to real-time

• Entrepreneurs– Home automation for demand response and EE– Financed permanent EE– Virtual home inspection and failure detection

• Microgrids– Ice storage for load shifting– Power quality refining– Island capability

29

Q&A

30

References

• Grid Modernization• IIT• Mesa del Sol• Illinois Policy Framework• ?