Slide 1

June 2012 Xtreme Power Battery Based Energy Storage in Alaska Alaska Energy Storage Workshop

Slide 2

Xtreme Power, Inc. Company Overview Xtreme Power engineers, designs, and integrates power management and energy storage solutions Founded in 2004 in Austin, Texas; ~ 270 employees Established Beijing Office Projects installed, contracted, and in final negotiations: >70 MVA, across 12 projects US-based operations in Austin, TX and OK, International presence Utility industry leadership on Board of Directors Pat Wood, Former FERC Chairman and Foster Duncan, Former EVP/CFO of Cinergy Over $70 MM in funding: SAIL Capital, Bessemer VP, Dow Chemical, Fluor, Dominion Power, BP, POSCO, Skylake Incuvest 2

Slide 3

The Dynamic Power Resource (DPR) Scalable solutions:.50 MVA to 500 MVA Available durations: 5, 15, 30 min and 1, 2, or 4 h Multi-Storage Architecture Multiple enclosure options Fully integrated turnkey product High round trip efficiency Accurate, real time response in < 3 cycles Re-deployable 3 Key Product Features Intelligent Control Seamless Integration Proven Performance

Slide 4

Fully Synchronized BMS & PCS Control Seamlessly Interface with the Grid Factory Tested and Field-Ready Operate 100 Modules as Single System System Integration Truly Innovative Solutions The DPR is an Integrated, Intelligent, Power Management Solution that is Configurable, Modular and Scalable. Programmable, Flexible, and Modular High Reliability & Cyber Security Optimized System Performance Web Based Real Time Monitoring Real-time Response Control System 4 Fast Response Long or Short Duration Multi-Storage Platform Capabilities Low lifecycle cost Safe and Reliable Battery Energy Storage Real and Reactive Power Supply Low Auxiliary Consumption Power Precision within 10 kW Overload to 150% of Nameplate MVA Power Electronics

Slide 5

XPOC and Test Bay 24/7 Operations Center (XPOC) Monitors all installations in the field in real time Collects and stores data to view graphical representations of historical and live operational data Remote access via secure Virtual Private Network Option to access through Tablets and Smart Phones Redundant Safety Notification Alerts Test Bay 12 MVA in-house test facility Equipped for Factory Acceptance Tests Expandable to 20MVA Ability to perform full 4 quadrant PQ operation Verification of control modes such as Ramp Control, Frequency Regulation, Voltage Regulation, Power Leveling, etc. 5

Slide 6

Proven Experience 6 > 2.5 GWh Energy Charged and Discharged > 2.5 GWh Energy Charged and Discharged 77 Megawatts Installed by End of 2012 77 Megawatts Installed by End of 2012 > 143,000 Hours of Integrated Module Operation > 143,000 Hours of Integrated Module Operation 245 Gigabytes of Recorded Data 245 Gigabytes of Recorded Data Leading the Market with Operational Experience As of March 31, 2012 Xtreme Powers experience includes:

Slide 7

A Growing Portfolio of Deployed Projects 7 9 Customers, 5 Applications & 10 Services To Date in Deployed Projects ~ 77 MVA, 154 MW Dynamic Power Range in Deployed Projects ProjectCustomerApplication Power Rating / Duration CODServices Deployed Projects South Pole Telescope (SPT) University of ChicagoMicrogrid0.5 MVA / 5 min.4Q 2006Peak-Shaving KahukuFirst Wind Renewable Integration 15.0 MVA/ 15 min1Q 2011Ramp Control, Curtailment Mitigation LanaiCastle & Cook Renewable Integration 1.1 MVA / 15 min2Q 2011Ramp Control, Frequency Response Ford Michigan Assembly Plant Ford, DTE Energy Demand Management 0.75 MVA / 60 min2Q 2011Load-Leveling, Ramp Control KIUC Kauai Island Utility Cooperative Grid Support1.5 MVA / 15 min3Q 2011Frequency Response, VAR Support NovaXcel Energy Renewable Integration 1.5 MVA / 15 min4Q 2011 Ramp Control, Firming & Shaping, Frequency Response, VAR Support Total Operating6 Customers4 Applications~20 MW6 Projects7 Services Near-Term Projects KWP II (Maui)First Wind Renewable Integration 10.0 MVA / 45 min2Q 2012 Ramp Control, Responsive Reserves, Grid Services FostersClassifiedMicrogrid3.0 MVA / 15 min2Q 2012Uninterruptible Power Source TureClassified Renewable Integration 1.5 MVA/ 15 minutes2Q 2012Ramp Control & VAR Support KIUC II & III Kauai Island Utility Cooperative Grid Support3.0 MVA / 15 min3Q 2012Ramp Control NotreesDuke Energy Merchant Services 36.0 MVA / 15 min4Q 2012 Responsive Reserves, Regulation Services, Grid Services BearKodiak ElectricGrid Support3 MVA/ 15 min4Q 2012 Frequency response, Responsive Reserves, Voltage Support Total Near-Term3 New Customers4 Applications57 MW5 Projects

Slide 8

South Pole Telescope 5 Years Experience In collaboration with several centers of higher education, the University of Chicago chose the Xtreme Power DPR to power the 200-ton South Pole Telescopes scan cycles without infringing on the stations life support system. The Telescope requires up to 259,200 cycles/month. 8

Slide 9

Kodiak Electric will employ the 3.0 MW DPR to smooth the output of the Pillar Mountain Wind Project, so that the utility can utilize the Terror Lake Hydro facility to manage grid stability and frequency regulation. Additionally, the utilization of the DPR will reduce diesel fuel consumption by allowing a higher penetration of renewable assets. 9 Kodiak Electric Cooperative Expanding Xtreme Powers Microgrid Experience

Slide 10

10 Microgrid Operators Expensive Diesel Operating Costs Can be >$4/gal in remote locations High cost and risk of fuel delivery Few alternatives available Unstable and Unsecure Grid Weak electrical distribution system can lead to loss of critical loads Poor power quality may require purchase of additional electrical equipment Insufficient response time for diesel generators Inefficient Use of Grid Resources Generators operate at reduced output for reliability Common curtailment and limited integration of renewable generation Constant cycling of units leads to more frequent O&M and greater fuel consumption Actual Wind Output Without DPR Challenges

Slide 11

11 Microgrid Operators: Case Study Grid Instability Limits Renewable Energy Delivered 2 MW of solar curtailed down to 1.2 MW 4.5 MW of wind curtailed down to 2.5 MW Requires more generation from diesel Inefficient Diesel Operation Consumes More Fuel Contingency requirements force generators to operate at low levels Average loading of generators = ~52% Spinning reserves cause additional curtailment of renewables Microgrid Challenge Example Case Study Scenario Outline Microgrid Peak Load5 MW Diesel Generators3 x 2 MW each Solar Farm Nameplate Capacity2 MW Wind Farm Capacity4.5 MW Diesel Fuel Cost$1.25/liter Solution 1: Utilize Diesel Generators to Balance Grid

Slide 12

12 Microgrid Operators: Case Study DPR Maximizes Renewable Energy Delivered Wind and solar farms operate at full nameplate DPR balances intermittency of renewables and acts as reserves without adding generation Efficient Asset Utilization Yields High Cost Saving Average loading of generators = ~70% Microgrid Solution Example Case Study Scenario Outline Microgrid Peak Load5 MW Diesel Generators3 x 2 MW each Solar Farm Nameplate Capacity2 MW Wind Farm Capacity4.5 MW Diesel Fuel Cost$1.25/liter Solution 2: Utilize 2 MVA/1 h DPR for Grid Balancing and Reserves Decrease Fuel Consumed by > 17%

Slide 13

13 Microgrid Operators Increase Reliability and Reduce Diesel Consumption Allow diesels to operate in optimal range to reduce fuel consumption Reduce need for fuel shipments Support energy independence Correct Grid Imbalances Act as back up power source to keep critical loads online Maintain high power quality with VAR support Respond 40-50 times faster than diesel generators Maximize Productivity of Grid Assets Reduce strain on the electrical distribution system caused by intermittency Decrease diesel consumption through less curtailment of renewable resources Decrease cycling to reduce O&M and fuel consumption Actual Wind Output Without DPR Xtreme Power Solutions

Slide 14

14 Renewable Developers & Operators Intermittent supply Variable, inconsistent production decreases market value Difficult to maintain sufficient power quality May require additional balancing services Curtailed Production Frequent curtailment reduces annual production Unable to capitalize on PPA without guarantees Prolonged return on investment Uncorrelated Generation & Demand Inconsistent generation profile vs. consistent load profile Peak output does not match peak load Unable to capture full market value Source: Energy Storage A Cheaper, Faster, & Cleaner Alternative to Conventional Frequency Regulation (CESA) Actual Wind Output Without DPR Challenges Actual Wind Output Without DPR

Slide 15

15 Renewable Developers & Operators: Case Study Ramp Rate Limit Requires Curtailment Uncurtailed ramp rate > 3x limit (1.9 MW/min) Must curtail to 950 kW to meet requirement Curtailment Decreases Energy Delivered Capacity factor @ nameplate 3MW = 19.3% Capacity factor @ limited 950 kW = 11.5% Annual production decreased by over 40% Renewable Developer Challenge Example Case Study Scenario Outline Solar farm Capacity3 MW Ramp Rate Requirement 500 kW/min PPA Compliance Requirement99% Solar PPA Price$135/MWh Solution 1: Limit Maximum Capacity950 kW

Slide 16

16 Renewable Developers & Operators: Case Study 1.5 MW DPR Reduces Intermittency DPR able to maintain ramp rate requirement No curtailment required to meet PPA Increase Energy Delivered & Project Revenues Maintain capacity factor of 19.3% Capture incremental Ancillary Service revenue Increase Project Revenues by > 95% Renewable Developer Solution Example Case Study Scenario Outline Solar farm Capacity3 MW Ramp Rate Requirement500 kW/min PPA Compliance Requirement99% Solar PPA Price$135/MWh Solution 2: DPR Size1.5 MVA/15 min duration

Slide 17

17 Renewable Developers & Operators Smooth Generation Variability Reduce intermittency, Avoid penalties Improve power quality Provide grid balancing services Optimize Asset Value Mitigate Curtailment, Increase energy delivered Enable restructured Power Purchase Agreements Boost revenue with additional service offerings Reshape Output to Meet Demand Mitigate forecast error market penalties Shape power to capture peak pricing opportunities Firm power to access premium pricing Actual Wind Output With DPR Xtreme Power Solutions

Slide 18

18 Utilities, Cooperatives & Municipalities Grid Stability & Power Quality Growth in renewables drives need for additional balancing services Inefficient grid balancing service offerings increases operating costs Power Quality issues must be solved locally Rigid and Costly T&D Congestion Solutions Transmission congestion can lead to high wholesale prices T&D infrastructure is sized to meet a future peak demand, but rarely used at that level Congestion requires capital intensive T&D infrastructure upgrades Complex T&D Project Planning & Logistics NIMBY area restraints Prolonged lead times increase project risks Onerous permitting process increases costs Strict siting limitations reduces solution efficiency Actual Wind Output Without DPR Challenges

Slide 19

19 Utilities, Cooperatives & Municipalities Improve Grid Stability & Power Quality Smooth intermittency or firm and shape power delivered from renewable resources Balance grid fluctuations accurately and efficiently without adding unneeded energy Siting flexibility delivers power quality solutions directly to problem source Enable Flexible, Economic Congestion Solutions Enhance reliability and decrease congestion Increase load carrying capacity of the transmission system Provide incremental capacity to defer an oversized T&D upgrade investment Expedite Turnkey Project Execution Integrate all key components into a utility-scale system and shorten project lead times Operate with existing/planned infrastructure Site anywhere with non-hazmat technology Actual Wind Output Without DPR Xtreme Power Solutions

Slide 20

20 Tom Noelle Vice President, Business Development tnoelle@xtremepower.com 5513 Silentbrook Rolling Meadows, IL 60008 847-348-7453