Eos Energy StorageCREA Energy Innovations Summit | Denver, CO
Philippe Bouchard, VP of Business Development
confidential 2
# in U.S. 17,350 plants 164,000 miles 3 million miles
Utilization 47% 43% 34%
Projected spend 2010-2030 $505B $298B $582B
Projected underutilization
~$822B of future US infrastructure will be underutilized without storage
Generatio
nDistributionTransmission
Today’s Electricity Grid is Massively Overbuilt & Under Utilized…
Ratepayers fund hundreds of $Bs of infrastructure to serve peak demand
Sources: “Electric Power System Asset Optimization.” NETL, March 2011; “The Power of Five Percent.” The Brattle Group, May 2007
confidential 3
Regional Spending on T&D Projects Completed by 2020 Heavily Weighted Towards the Rockies
~66% of projected infrastructure spend through 2030 is distribution system upgrades
Sources: “Electric Power System Asset Optimization.” NETL, March 2011; “The Power of Five Percent.” The Brattle Group, May 2007
Significant growth in energy storage industryhas already begun
4confidentialSource: IHS “The Grid connected energy storage market” 2014 DOE Storage Database; Press searches
Energy storage market to reach ~$25B by 2022 2013 RFPs outstrip previously installed capacity
Battery Energy storage market projection(GW) ($B)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20220
2
4
6
8
10
12
14
16
0
5
10
15
20
25Behind the meterIn the GridCo-located (renewables)Co-located (conventional)$
2013 RFPs Currently installed0
500
1000
1500
2000
2500
ItalySoCal Edison
PR
Long Island
California
US
Europe
Japan
2013 energy storage announced RFPs exceed total current global installed non-hydro storage capacity (MW)
2013 represents a~$4B market
confidential
vv
Eos Aurora 1000|4000Grid-Scale Energy Storage
Eos Aurora Designed Specifically to Meet Market Requirements for Grid-Scale Storage
5
Eos ZnythTM
Sub-Module
DC battery performance attributes
Low cost / kWh $160/kWh
Long life (high # of cycles) 10,000 cycles (30 years)
Energy density 6MWh in a 40ft container
High energy efficiency 75% round trip efficiency
Safety Non-hazardous, non-combustible
Eos Aurora optimized to meet customer requirements and to provide lowest LCOE
6Eos outcompetes gas peaking turbines on an LCOE basis
EOS
Levelized cost of energy is critical metric for adoption; Eos LCOE lower than incumbents and competitors
Eos Partnering with Major Utilities on Business Case Driven Product Development & Demonstration
7
Optimize Demonstrate Deploy
Eos Genesis collaboration includes:
1. Detailed business case analysis to identify profitable opportunities for deployment
2. Testing and evaluation of Eos’ novel ZnythTM battery technology leveraging partner facilities and testing platforms
3. Pilot demonstration of Eos Aurora systems to understand real-world costs and to optimize value streams
Customers Miles of T&DGW Generation Countries
Together Eos’ Genesis Partners represent:
Powerful Business Cases for Storage
8
1MW-Scale Grid-Connected
2Behind-the-meter Storage
• Electricity peak shifting (arbitrage)• Generation capacity• Transmission or distribution deferral• Ancillary services• Renewables integration premiums
• Time of Use (TOU) energy management• Demand charge reduction• $2.1/W locational capacity program• Permanent Demand Reduction• Demand response program
participation
confidential 9
Example: Grid-Connected ‘Triple Play’Example Financials: 5 MW Eos Installation
Cost
• Installed capital cost of ~$1,970 per kW
• Annual operating cost = $200,000 per yr
~$10.1 M
Gross Revenues
(Avg Annual)
TOTAL per MW (10 yr period, ~70% RTE)
1. Average Energy Arb $ / MWh2. Gen Capacity $ / kW – year3. T&D Value $ / kW – year
~$2.7 M / yr
IRR • After tax, residual value 23% 56%
Equity• Total of outlay + any
negative cash flows$10 M $2.5 M
Payback • After tax, 10% discount rate4
years2
years
LeverageAll EquityFinancing assumptions: 75% debt @ 8.0%, 10 yr
Eos installation creates 56% IRR and 2-year payback
confidential 10
Example: 50MVA Substation Deferral
• T&D upgrade performed as usual; upfront Y1 spend
A • Storage installed Y1utility-owned, 5-year T&D deferral
B • Storage installed Y1, 10-year contract (developer monetizes market revenues)
C
+ $10.3M addition to rate base + $16.1M addition to rate base +$10.3M addition to rate base in Y5
NPV: ($10.5M) NPV: ($10.5M) NPV: ($6.9M)
Energy storage can be used on a targeted basis to provide locational capacity and to defer
costly T&D upgrades, improving reliability and lowering costs for the utility / ratepayer
Example Peak Load Shaving Battery / Load Profile
confidential 12
Example: Behind-the-Meter ‘Triple Play’
Images and financial projections provided courtesy of Convergent Energy + Power
Eos low-cost, energy dense, and safe battery flattens customer load while increasing resilience
Example Financials: 100 kW Eos Install
Cost• Installed capital cost• Operating cost = ~$5,000/yr
$310,000
Gross Revenues (Avg Annual)
Assumes 10 yr period, ~70% RTE1. Average Energy Arb ($/kWh)2. ↓Demand charge ($/kW-month)3. Targeted DSM ($/kW installed)
$75,000
Financing assumptions: 50% debt @ 10%, 10 yr
IRR • After tax, residual value 23% 44%
Equity• Total of initial outlay +
any negative cash flows
$310 K
$166 K
Payback• After tax, 10% discount
rate4 yrs 2 yrs
LeverageAll Equity
100 kW Project Concept Design
Behind-the-Meter Business CaseJuly 2010
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Without BatteryWith Battery
Hours
Max
kW
Demand Charge Reduction
2 Hour “Demand Response” Call
• 13
Balance charge / discharge profile to reduce the monthly peak without creating a new one
What We’re Hearing from the Solar Industry
First Solar CEO, Jim Hughes:* Market cannot respond to falling solar prices because of structural limits:
✴ Transmission capacity constraints✴ Grid stability issues✴ Load shape and growth✴ Utility resource planning cycles
* The key to long term growth is to solve for these constraints. * Price alone won’t do it…
1) Jim Hughes, First Solar. Tomorrow’s Utility: The View from the Sun. CleanTech Investor Summit. Feb 2013. http://cleantechsummit.com/resources-2/
cleantechsummit.comCritical question: What is the sustainable business model and where does storage fit in?
confidential
Commence MW Genesis Production
Eos continues to make strong progress and will deliver first systems to Genesis partners in Q4 2014
Q2 2013 Q3 2013 Q4 2013
AC-Integrated System Q4 2013
2kW Modules Internal TestingFeb 2013
Manufacturable Sub-Module DesignQ3 2013
Q1 2014 Q2 2014 Q4 2014
3rd Party Testing & ValidationQ2 2014
2014 Focus: Demonstrate kW-scale, test and optimize AC-integrated systems with Genesis partners, ramp up manufacturing
15
Q3 2014 2015…
Planned Pilot ProjectsCon EdQ4 2014
GDF SuezQ4 2014
15
confidential
COMMERCIAL PRODUCT• Firm delivery of 1MW/4MWh systems
available at $300/kWh for 2016 install and $160/kWh for 2017 install
• 1 year standard warranty; up to 5 yr warranty at additional cost
16
Eos to Announce 2016 Commercial Product Offering and Aegis ProgramIn December, Eos plans to announce availability of its 2016 & 2017 commercial product (DC battery), also offered with full AC integration via Eos’ new Aegis Program
AEGIS PROGRAM• Establishes formal
relationships with system integrators to provide AC-integrated, turn-key systems via multiple distribution channels
• Aegis partners can provide warranty wrap and option for extended performance guarantee
• Aegis partners to be announced in near future Aurora 1000 | 4000(DC battery system)
2015 demonstration partners will have priority access to 2016 volume
www.eosenergystorage.com