Presented By:

11/15/16

Releasing the Full Capacity of DERs through Flexibility

Speakers:

JeffreyNorman,VicePresidentofIndustrySolutions,AutoGrid Systems

AdamTodorski,SeniorDirectorProductTechnology,AutoGrid Systems

Moderator:

Elta Kolo,Analyst,GridEdge,GTMResearch

2GTM Research

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Today’sSpeakers

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Agenda

DistributedEnergyResourcesEvolvinginDemandResponsePrograms1

ReleasingtheFullCapacityofDERsthroughFlexibility2

Q&A3

GTM Research

DistributedEnergyResourcesEvolvinginDemandResponsePrograms

6GTM Research

BuildingElectricityMarketsoftheFuture

Innovation for Market—Based Deployments of DERs

AggregationisakeyforDERintegrationatasystemanddistributionlevel,inthiswayincreasingthevalueoftheoffering.

AnimatingMarketsforDistributedEnergy

Resources

RegulatoryGuidance

ElectricityMarket(Re)design

ThirdPartyTechnologyandServiceProviders

EmpoweringcustomerstobecomeactiveelectricsystemparticipateswillcomefromappropriateadoptionofDistributedEnergyResources(DERs)

Affordableandreliableelectricitysystem

7GTM Research

ValueofFlexibilityfromDERs

FlexibilityCapability GridValue

Capacity Canreducethegrid’speakloadandflattentheaggregatedemandprofileofcustomers

• Avoidedgeneration,transmission,anddistributioninvestment

• Minimizegridlosses• Reduce therateofequipmentdegradation

Energy Canshiftloadfromhigh-pricetolow-pricetimes Avoidedproductionfromhigh-marginal-costresources

DERintegration Canreshape loadprofilestobettermatchrenewableenergyproductionprofiles

Mitigatedrenewableintegrationchallenges(e.g.,ramping,minimumload)

Source: Rocky Mountain Institute

Value of Flexibility

Aggregated DER flexibility is valued under existing demand response program schemes for ISOs/RTOs and utilities. With DERs available atdifferent levels of the grid, opportunities and challenges arise with respect to markets and market design in addition monetizationstrategies for capacity and energy.

8GTM Research

61%23%

16%

DemandResponseAllocationinISO/RTOTerritories

Behind-the-Meter Generation in MISO, PJM and SPP in Delivery Year 2016/2017Makes up 21.2% of the System-Wide Flexibility

Source: MIS, PJM, ERCOT, CAISO, NYISO, ISONE, SPP1MW include maximum availability not maximumactivation.

31.3 GW16.6 GW

Total DR Available per ISO/RTO BTMG in MISO, SPP and PJM

38%

37%

8%

6%5%4%2%

9GTM Research

SystemNeedsAreChanging

January,140,510June,141,678

February,143,129 July,143,633

80,000

90,000

100,000

110,000

120,000

130,000

140,000

150,000

160,000

1 3 5 7 9 11

MW

Month2010 2011 2012 2013 2014 2015 2016

Although PJM has traditionally been a summer peaking system, it is evident that this fact is slowly changing. For 2015, the winter peak in February andsummer peak in July were nearly equal in the RTO territory.

PJMMonthly RTO Peaks 2010 to 2016

Source: PJM

10GTM Research

For the July 25th peaking summer day, between the hours of 14:00 to 19:00 there was approximately 600MWof economically scheduled DR flexibility that provided relief in the BGE territory.

HeatDayPeakLoadTriggersEconomicDemandResponseinBGETerritoryonJuly25,2016

Load in PJM Territory During Heat Days Load in BGE Territory During PJMDeclared Heat Days

7/25/2016,

75,000

85,000

95,000

105,000

115,000

125,000

135,000

145,000

155,000

1:00 3:00 5:00 7:00 9:00 11:00 13:00 15:00 17:00 19:00 21:00 23:00

MW

Hour

7/21/2016 7/22/2016 7/23/2016 7/24/2016

PJM issued hot weather alerts for July 21 to July 27. System capacity peaked on July 25, reaching amaximum load of over 150,000MW in the RTO territory at 16:00 on July 25.

2,800

7,800

1:00 3:00 5:00 7:00 9:00 11:00 13:00 15:00 17:00 19:00 21:00 23:00

MW

Hour7/21/20167/22/20167/23/2016

Source:PJM

*Actualreductionsachievedwillbeknownafterallindividualcustomermeterdataisprovidedforsettlements– submissiondeadlineforeconomicenergysettlementsis60daysfollowingevent.

Source:PJM

Releasing the Full Capacity of DERs through FlexibilityJeff Norman, VP Industry Solutions, AutoGridAdam Todorski, Senior Director Product Technology, AutoGrid

Rise of the DERs at Grid Edge

A complex, real-time energy network (aka the Energy Internet)§ Distributed energy resources§ Renewables § Customers as consumers

and suppliers§ Value through optimization

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Inherent Challenges with DERs

New Technologies Intermittency

Integration with Existing Grid Communications Business Model

New Approach: Flexibility Management14

Solar, DG

HVAC, Lighting

Combined Heat & Power Plants

Thermostats, Water Heaters

Battery Storage

Energy Resources

Electric Vehicles

Transmission & Distribution

Wholesale Energy Markets

Value Streams

Behind-the-Meter Cost Reduction

$$

Resource Flexibility

Unleashing That Potential Requires Challenging Some Common Assumptions

NEW THINKINGMYTHS

Distributed generation, storage, and demand response are separate categories

with different purposes

MYTH #1

New Thinking: All Are DERs18

Solar HVAC, LightingCombined Heat & Power Plants

Thermostats, Water Heaters

Distributed Energy Resources

Distributed Generation Energy Storage Demand Response

Battery Storage

Other DERs

Electric Vehicles

What others have said…

Yes, 20%

No, 80%

Is the electricity industry prepared for how the surge of DERs at the grid edge will change utility business models?

Source: GTM Squared “Annual Survey Report 2016: The Future of Global Electricity Systems”

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DERs are a threat to grid stabilityMYTH #2

What others have said…

33.9%

26.5%

9.2%

15.8%

4.6%

To what extent do you believe distributed generation represents a threat to your business?

Source: Black & Veatch 2015 Strategic Directions: U.S. Electric Industry Report

Major/ moderate threat

Minor threat, but with significant long-term repercussions

Minor threat, but with limited long-term repercussions

No threat

Don’t know

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Do you:• Get ready to pay millions or tens of millions for your new seasonal

capacity peak?• Spin up a peaker plant?• Curse your customers for having deployed solar, which has pushed

your daily load curve into the early evening and threatens to wreak all sorts of other havoc?

Scenario: it’s the third day of a late July heat wave and you’re about to eclipse your seasonal peak by 3%!

New Thinking

Or, do you help your customers buy batteries and:• Have a reliable load-shifting capacity resource right where demand is• Facilitate the integration of rooftop PV and leverage it as a distribution

asset• Opportunistically self-supply or sell ancillary services

Scenario: it’s the third day of a late July heat wave and you’re about to eclipse your seasonal peak by 3%!

<1 s2-4 s10-30 mins

Hours/Days

Months/Years

System Planning

Governor ResponseRegulationReservesCapacity

Event Based DRDR in Capacity Auctions/Resourc

e Adequacy Programs

ManagedSmart

Inverters

DERs with Real-timeControls

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New Thinking: What Can’t You Do with DERs?

§ Active utility interaction with customer sited storage and generation can be the norm – just like DR

§ Good customer engagement tools can help expand DR programs and integrate DER programs

§ Existing DR resources can be forecast and controlled alongside storage and DG to respond at all time scales

Response Time of Resources

You can’t do much more with old assets like window A/C units and water heaters

MYTH #3

New Thinking: Sometimes a Cigar Isn’t Just a Cigar

With good software, these assets can deliver predictable, precise, targeted, and fast-acting load relief

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Flexibility Management

Predictable, flexible capacity

You can’t count on voluntary DR for grid operations

MYTH #4

New Thinking: “Dispatch-Grade” Load Shed Forecasts28

Forecast vs. Actual Curtailed LoadActual Load AutoGrid Forecast Single Methodology Forecast

kW C

urta

iled

Load

1.5

2

2.5

3

3.5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

-0.4-0.3-0.2-0.10.00.10.20.30.40.5

Erro

r (kW

)

DR Event

Load Forecasting Error Single Methodology ErrorAutoGrid Forecasting Error

Data from 20 Behavior DR events at a major utility

What others have said

Source: Utility Dive, State of the Electric Utility 2016

The best way to integrate these DERs is asset-by-asset to reduce risk

MYTH #5

New Thinking: It’s not about each asset or program, it’s about the network

C&I DR

BYOT

Smart Thermostat

Residential DLC

Building Optimization

Interruptible Gas Programs

MISO Registration

Storage

DERs

EVSEs

Flexibility Management

C&I DR

BYOT

Smart Thermostat

Residential DLC

Interruptible Gas Programs

MISO Registration

Flexibility Management: All Assets, All Services, All Customers32

Storage Mgmt

Behavioral DR

Bring-Your-Own-Thing

C&I Direct Load Control

Demand Charge Mgmt

All ServicesDERMS

All Customer ClassesResidential Commercial Industrial

Virtual Power Plant

All Assets

Flexibility Management

Solar

Thermostats

CHP

Water Heaters, HVAC

Storage

EV/EVSE

Lighting

DER

DR

All ServicesCapacity Energy Ancillary

ABOUT AUTOGRID

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AutoGrid Company Overview

Company Facts

§ Established in 2011 at Stanford University

§ Headquartered in Silicon Valley

§ Operations in North America, Europe, APAC

§ ~50 employees

§ Strategic Investors include regulated and deregulated global energy companies

Leading Provider of Flexibility Management Applications

25+Global Energy Customers

2000MWDERs Contracted Globally

50 MillionEnd Customers

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AutoGrid Flex

• DERMS

• Demand Response

• Virtual Power Plants

• Storage Optimization

Use Cases

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Solar, DG

HVAC, Lighting

Combined Heat & Power Plants

Thermostats, Water Heaters

Battery Storage

Energy Assets

Electric Vehicles

$$

Resource Flexibility

Wholesale Markets

Transmission & Distribution

Value Streams

Behind-the-Meter

To Learn More§ Contact us

§ jeffrey.norman@auto-grid.com§ adam.tordorski@auto-grid.com

§ Go to our website www.auto-grid.com for:§ White paper: “The Economic Value of Next-Generation DR”§ Lots of other info!

§ Meet with us at Energy Storage Summit (12/7) or DistribuTECH (1/31)

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