Battery Storage

Offsetting Rising Demand Charges?

June 9, 2015

About Us

Since 2009, TerraVerde has been California’s leading independent energy advisor for K-12 Schools

Recognized leader in project development consulting services: Energy Efficiency, Solar PV, Battery Storage

In house engineering, structured finance, financial modeling, energy project contracting, Owner’s Rep services, project and program management, and Asset Management Services

Serving all of California (offices in So Cal & Nor Cal)

Energy industry veteran principals are directly involved in project development, financial analysis, technical specs

Unique engagement model mitigates project risks

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Presenters

Rick Brown, PhD, President

Ali Chehrehsaz, EVP Operations/Engineering

CA Schools Experience

Selected by 40 LEAs to assist in Prop 39 program managementConducted investment-grade audits and financial analysis for over 150 LEAs and other public agencies 73 K-12 energy projects completed to date; another 34 sites currently under constructionCompleted over $82 Million in solar & energy efficiency projects, on time and on budget; secured over $20 Million in competitive low-interest financing (CEC Loans, Build America Bonds, QSCBs)Comprehensive experience with solar PV, energy efficiency, battery storage, alternative financing, multi-site construction, specification driven RFP processes, public agency-centric policies and regulations, ADA, DSA, and turnkey design/build management

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Battery Storage Projects

California Public Utilities Commission approved Battery Storage “behind the meter” last year

We currently have 12 schools under construction; Burton City Schools and Tulare City Schools

First ever over-the-counter DSA approval of K-12 Battery Storage Project at Burton City Schools

Reserved Battery Storage rebates currently under development at 59 sites

RFPs for reserved rebates to be released in July 2015

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Demand Charges

The Problem:For many commercial customers the peak demand part of their utility bill can be 30–40% of their total electric bill.

In recent years, California Utilities have received approval to increase demand charges at alarming rates

In January SDG&E demand charges hit most San Diego County schools with 30% increases

PG&E is currently trying to get rid of A6, the only “no demand charge” commercial rate in CA

Demand Charges-How They Are Calculated:Demand charges are calculated based on the highest peak demand during the monthly billings cycle based on a 15 minute interval.For example: if your school is on a rate structure where the demand charge is $15/kW, and it is an unusually hot day, so your HVAC units are working extra hard to keep classrooms at a reasonable comfort level, your demand may spike to 350 kW, resulting in that month's demand charge $4,500

…even though the rest of the month your demand usually goes no higher than 200 kW; i.e., you would have otherwise been charged $3,000, except for one 15-minute demand spike

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Let’s first understand what’s under the hood

How Battery Storage Reduces Demand Charges

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Technology Review

BatteryInverterCooling SystemCommunication SystemSafety DisconnectController

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How Battery Storage Reduces Demand Charges

Installed behind the utility meterMonitors building demand typically every 10 secDischarges to limit measured demand spikesSmart algorithms “learn” customer behavior

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Battery Storage & Solar

While solar can significantly reduce the biggest part of an energy bill (usage), solar energy by itself doesn’t reliably reduce demand charges.

Working together, solar and battery storage offset both usage and demand charges, a “perfect combination”

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Case Study: Burton City Schools

Let’s walk through an example day in the life of a School

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15 min Interval Analysis

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Original Demand Profile“Baseline” (kW)

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High Risk Demand Interval(i.e. expensive demand charge!)

Note: Baseline is depicted before installation of solar and battery storage.

Expect Only Minor DemandReduction from Solar (kW)

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Note: Due to the intermittent nature of solar production, it is advised to assume no demand reductions in financial projections.

Peak demand still in place even after solar

Reduced Demand Profile with Battery Storage (kW)

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PEAK demandreduction fromBattery Storage

(i.e. demand charge savings!)

Desired demand cap of 75kW (i.e. “Set Point”)

Battery recharges “after hours”

Benefits of Energy Storage

Demand Reduction – Automated control system discharges battery during periods of high demand to avoid demand charges. Advanced algorithms “learn” operating profile and respond (charge/discharge) instantaneously.“Smooth out” solar production profile – to avoid gaps from weather variations Back up power to critical loads during grid failureSGIP rebate program currently provides $1.46/W (approximately 50% of total capital cost)“No capital investment” contracts are available - similar to solar PPAs (share demand charge savings w/ investor)

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Energy Storage Feasibility Approach

Evaluate separate scenarios for solar only, battery storage only, and solar + battery storage based on operating profiles, site-specific parameters and future conditions

Note: use15 minute electricity interval data for 1-3 years

Rank sites by cost effectiveness and savings potential Consider different financing/contracts scenarios

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Applicable Utility Rates & Programs

Rate StructuresSolar “friendlier” Rate Structures have lower or no demand charges

PG&E A6 & E19R; SCE Option R; SDG&E DGR

Self Generation Incentive Program (“SGIP”)High demand for these incentives

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CBO’s Challenge

In looking at new technology, how do you achieve verifiable cost savings, taking into account risks, that match projections and expectations

Analyze large quantities of data, variables, and site conditions across multiple facilities/sites

Evaluate many technologies and financing methods

Carefully evaluate and negotiate contract terms

Only go forward with highest value projects that can achieve net positive cash flow savings with minimal upfront expense

Alleviate burden on staff and disruption to Operations: from initial project development through implementation

Make sure there is on-going management of O&M, warranties, performance monitoring and reporting

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Contact Information

Rick Brown, PhD, President

TerraVerde Renewable Partners, LLC1100 Larkspur Landing, Suite 155

Larkspur, CA 94939707-953-2885

Rick.Brown@TVRPLLC.com

www.TVRPLLC.com

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TerraVerde’s Experience

Projects Completed To Date: $82 MillionProjects Under Development: $45 Million

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• Visalia USD• Clovis USD• Burton City Schools• Inyo County• Corcoran USD• Monterey Peninsula USD• Firebaugh Las Deltas USD• Golden Valley USD• Fowler USD• Eastern Sierra CSD• Rancho CA Water District• City of Davis• City of Woodland• City of Lathrop• City of Bishop

What Our Clients Say“TerraVerde emphasizes education and transparency. We feel confident that they provide us an unbiased assessment of the risks and benefits.”Don Ulrich, Assistant Superintendant, Clovis USD

“TerraVerde is the best partner I have ever worked with in my 28 years of school construction experience.”

Eric Cederquist, Superintendent, Fowler Unified School District“TVRP paid special attention to our unique needs and requirements throughout the development and implementation process. Most importantly, they have worked as a true partner, providing information in a fully transparent manner and have worked collaboratively with us to address issues and problems that inevitably arise during the development process.”Steve Bolman, Superintendant, Petaluma City Schools“It is my pleasure to provide my highest recommendation for TerraVerde. As their name implies, they have truly become our partner in all energy matters. Every person that we have worked with at TVRP knows our particular issues and concerns and is an integral member of our team as we evaluate both solar and now Prop 39 projects.”Robert Groeber, Assistant Superintendent, Visalia USD“While we were in the process of developing our solar project, we had over ten contractors participate in the mandatory site walk. One of the contractors said to me how fortunate our district is to be working with Terra Verde. They said that there is never a question as to what is expected of the contractors and that Terra Verde is very well organized which leaves little room for mistakes or issues once the project begins.”Tracy Tucker, MOT Director, Burton City Schools

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Best Practices: Project Development

Phase 1: Planning, Project Development, Analysis, Recommendations Set well defined goals & objectives

Gather all relevant data, perform in-depth discovery; assess project sites for further consideration or disqualification

Prepare feasibility assessments and financial analysis for selected sites

Review finding & recommendations, finalize execution plan

Phase 2: Competitive Bidding, Contractor Selection, ContractsDevelop RFP & run competitive bid process with clear performance and construction specs; use “client side” contract form documents and instructions that yield comparable scopes/pricing

Obtain best value at lowest possible cost by conducting rigorous value engineering and contract negotiations

Phase 3: Project ManagementStrong oversight of design, construction, commissioning & closeout process

Phase 5: Asset ManagementPerform O&M services, daily systems performance monitoring, quarterly performance reports & Preventive Maintenances logs, and detailed annual financial reports

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Note: Best Practices Webinar http://www.casbo.org/?page=Prop39Webinar&hhSearchTerms=%22Webinar+and+Bid%22

Best Practices: Asset Management

Monitor and Maintain Systems for Peak Performance Monitor on continuous basis, compare to predicted output

Schedule and conduct preventive maintenance

Respond to alarms on a timely basis

Initiate warranty claims and dispatch technicians

Compare actual meter values to projected output and identify cause of any discrepancies. Report findings

Provide quarterly production/performance reportsProvide annual realized savings report and future

maintenance budget forecast

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Battery Storage Preventative Maintenance

Visual Inspection on all equipmentDamagesTorque marksThermal scan

Replace Consumables FiltersFusesLubricants

TestingBattery Capacity DegradationInverter EfficiencyMeter Calibration

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TerraVerde + Green Button

TerraVerde is now integrated with the PG&E Green Button Connect Program!

This integration makes it quick and painless for us to obtain 15-minute interval demand data from our clients.

It’s so quick, we can turn-around a battery storage feasibility study in no time.

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