Alberta’s Opportunity Compressed Air Energy Storage Presentation to Southern Alberta IEEE AGM on RMP’s ASISt - Bulk Energy Storage Project

Rocky Mountain Power (2006) Inc. 8335 Edgevalley Dr NW Calgary, Alberta T3A 4X2 Phone: 403-244-2097 www.rockymountainpower.ca

November 21 2014

RMP’s ASISt Project • Overview – Lorry Wilson – Rocky Mountain Power background – Why energy storage – ASISt Compressed Air Energy Storage Project

• Technical challenges and studies – Bill Kennedy – Power System studies – Motor starting

www.rockymountainpower.ca

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Rocky Mountain Power • Independent power project development company • Management conceived of and managed initial development of the following projects: – Montana-Alberta Tie Line (MATL) – Wind Spirit Project / Grasslands Renewable Energy – Qu’Appelle Dam Hydro Project – Saskatchewan-Alberta Tie Line (SATL) – ASISt CAES Project www.rockymountainpower.ca

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Alberta Opportunity • World class wind resources • Canada’s best solar irradiation resource • Excellent salt formations in central-east and north-east regions • Deregulated energy market / volatile pool prices • Strong ancillary services markets • Relatively small hydro generation • Strong market growth • Utility interest in integrating energy storage resources www.rockymountainpower.ca

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Why Energy Storage • The World is our stage! • Alberta needs to integrate more renewable sources into its supply to reduce its carbon footprint • Wind and solar is intermittent – like driving a car without a gas pedal • The power system can only absorb so much uncontrollable supply • Energy storage provides the “cruise control” to manage the randomness of renewable supply www.rockymountainpower.ca

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Concentrated Energy Value Alberta Historical Pool Price Profile (Jan 2008 - Dec 2012)

45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

$0-$25

$25-$50

$50-$100

$100-$500

$500-$900

$900-$999

# of Hours %

32%

41%

18%

7%

2%

1%

Pool Price Value %

8%

22%

19%

23%

19%

10%

• Historically, over 50% of the annual energy value in Alberta occurs in 10% of the hours • The key to increasing wind energy revenue is to deliver more energy during the high pool price hours www.rockymountainpower.ca

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Alberta Diurnal Price Profile Average Daily Hourly Pool Price Profile Alberta 2006 - 2012

$200.00 $180.00 $160.00

$/MWh CAD

$140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00

2006

2007

2008

2009

2010

2011

2012

Daily HE 1-24 (Annual Averages)

• Average pool price = $68.16/MWh • Average off-peak pool price = $31.05/MWh • Average on-peak pool price = $86.72/MWh www.rockymountainpower.ca

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Historical Wind Energy Discount Alberta Historical Prices (Jan 2008 - July 2012)

$100.00 $90.00 $80.00 $70.00

$/MWh

$60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 -$10.00

Ave

2008

2009

2010

2011

2012

Ave Pool Price

$64.52

$89.95

$47.81

$50.88

$76.22

$52.74

Ave Wind Price

$48.46

$71.62

$42.22

$38.03

$49.97

$17.41

-25%

-20%

-12%

-25%

-34%

-67%

www.rockymountainpower.ca

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1 17 33 49 65 81 97 113 129 145 161 177 193 209 225 241 257 273 289 305 321 337 353 369 385 401 417 433 449 465 481 497 513 529 545 561 577 593 609 625 641 657 673 689 705 721

OUTPUT

1 17 33 49 65 81 97 113 129 145 161 177 193 209 225 241 257 273 289 305 321 337 353 369 385 401 417 433 449 465 481 497 513 529 545 561 577 593 609 625 641 657 673 689 705 721

OUTPUT 3500

3000

Hourly Raw Output vs. 1000 MW Baseload

3000

2500

2000

1500

1000

500

0 HOURS

Hourly firmed output w/600MW Firming

2500

2000

1500

1000

500

0 HOURS

www.rockymountainpower.ca

Alberta Energy Duration Curves Alberta Wind Output and Load Duration Curves 100 90

100MW Alberta Wind Output Profile (33% CF)

80

35MW Alberta Load Profile (60% CF)

70

MW

60 50 40 30 20 10

-10

1 267 533 799 1065 1331 1597 1863 2129 2395 2661 2927 3193 3459 3725 3991 4257 4523 4789 5055 5321 5587 5853 6119 6385 6651 6917 7183 7449 7715 7981 8247 8513

0

www.rockymountainpower.ca

Hours - 1 Year

Surplus Wind Energy Alberta Wind Output and Load Duration Curves 100 90

100MW Alberta Wind Output Profile (33% CF)

80

35MW Alberta Load Profile (60% CF)

70

MW

60 50 40 30 20 10

-10

1 267 533 799 1065 1331 1597 1863 2129 2395 2661 2927 3193 3459 3725 3991 4257 4523 4789 5055 5321 5587 5853 6119 6385 6651 6917 7183 7449 7715 7981 8247 8513

0

www.rockymountainpower.ca

Hours - 1 Year

Unserved Load – 2011 Simulation

MW

MW

-10 -20 -30 -40

Hours - 1 Year

0 -5 -10 -15 -20 -25 -30

1 419 837 1255 1673 2091 2509 2927 3345 3763 4181 4599 5017 5435 5853 6271 6689 7107 7525 7943 8361

0

Unserved Load With CAES

1 419 837 1255 1673 2091 2509 2927 3345 3763 4181 4599 5017 5435 5853 6271 6689 7107 7525 7943 8361

Unserved Load Without CAES

Hours - 1 Year

• Hourly simulation based on 2011 Alberta wind output (100MW/33% CF) and load data (35MW/60% CF) • Without CAES: 28% load unserved • With CAES: 4% load energy unserved www.rockymountainpower.ca

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CAES Schematic • During off-peak hours low-cost electricity is used to compress air into a salt cavern • During on-peak hours the compressed air is released and combined with natural gas to generate electricity

www.rockymountainpower.ca

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Conventional CAES • Conventional CAES uses proven technology for both the compression and expansion/generation cycles • Salt caverns used as storage vessel

110MW CAES plant in McIntosh, Alabama Commissioned in 1991

www.rockymountainpower.ca

290MW CAES plant in Huntorf, Germany Commissioned in 1978

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Benefits of CAES • Doubling Wind Generation with associated jobs, economic multipliers and tax base - all situated in Alberta • Better utilization of significant investment now being made in Alberta’s electricity transmission system • Improved Alberta GHG performance benefiting the green credentials of export oil - protecting investment and jobs • Enhanced public opinion of the province of Alberta as a leader in environmental responsibility • Assurance of crown royalties from exported hydrocarbons • CAES accommodation by AESO is non-discriminatory • NO DOWNSIDE www.rockymountainpower.ca

Proposed ASISt Storage Facility • Discharge (Generation) –160MW. • Charge (Compression Load) – 2 * 80MW. • Storage Capacity ≈ 60 hours: – # of caverns ≈ 2.

• Initially connect only to AIES. • Future AC interconnect with SaskPower: – Create a virtual intertie.

• • • •

Capital Cost ≈ $2MM/MW of generation. Ramp rates ≈ 20%/min rated plant output. Heat rates ≈ 4000GJ/MWhr. Switch from load to generation in 10 minutes.

www.rockymountainpower.ca

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Strategic Location Why Lloydminster?  Access to Alberta grid (part of the Western Interconnection)  Access to Saskatchewan grid (part of the Eastern Interconnection)  The two power grids are in close proximity at Lloydminster – ‘Canada’s Border City’  Excellent geology for salt cavern development  Current transmission systems support 150MW transfer capability www.rockymountainpower.ca

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ASISt Project – Key Attributes • Centralized Bulk Energy Storage System

– 125MW - 160MW charge and discharge capacity – Storage capacities of 12-60 hours have been modeled

• Strategic Location at Lloydminster

– Excellent geology for salt cavern development – Strong transmission infrastructure (240kV proposed) – Adjacent to WECC and MRO energy markets

• Multiple Revenue Streams

– Energy Markets / time-shift power delivery – Ancillary Services Markets (Reg, Spin, Supp L) – Arbitrage (regional and inter-regional)

www.rockymountainpower.ca

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Prairie Evaporite Formation

www.rockymountainpower.ca

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Salt Core Near ASISt Location Nearly Pure Halite

Mixture

Anhydrite Layer

www.rockymountainpower.ca

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CAES Facility Location - TBD Lloydminster

ATCO Substation A

B SaskPower Substation

www.rockymountainpower.ca

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ASISt CAES Commercial Scale

www.rockymountainpower.ca

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Overview of Connection process • By law, AESO responsible for connections. • Proponent responsible for connection studies. • Follows NERC process for contingencies. • Both steady state and transient studies required. • AESO in conjunction with project proponent develops study scope. www.rockymountainpower.ca

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Technical Challenges • Lloydminster location – served by existing 144 kV. • Future development includes 240 kV reinforcement from south and/or west. • Low short circuit levels, challenge for starting large motors. • Use synchronous motors. www.rockymountainpower.ca

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Technical Challenges • Induction motors require 4 to 5 pu starting current resulting in large voltage drop at 240 kV bus. • Synchronous motors can be designed for 2 to 3 pu starting current. • Want to avoid soft start equipment. • Need a balance between the compressor and motor manufacturer. www.rockymountainpower.ca

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Motor Start Example • Initial short circuit capacity – 500 MVA at 240 kV bus (one 240 kV line). • Future short circuit capacity – 1,000 MVA (two 240 kV lines). • Maximum voltage drop at 240 kV bus – 10%. • Compression requires four to five stages. • Two compression trains. • Multiple motors …

www.rockymountainpower.ca

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Motor Start Study 4.08 MW 3.12 Mvar

4.08 MW 3.18 Mvar

0.00 MW 0.00 Mvar A

slack

Amps

1.02 pu

Utility Gen

1.01 pu

Utility Sub

1.01 pu

1.01 pu

Load Sub Load

• Preliminary study shows should be able to start 15,000 hp synchronous motor across the line. • Need additional studies to confirm. www.rockymountainpower.ca

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ASISt Benefits Summary • Intermittent Generators: – Energy purchase/delivery time shift improves economics for wind and solar farms.

• Grid Systems: – Increased reliability / delivery of AS, – More efficient utilization of transmission system, – Potentially relieve transmission congestion.

• Ratepayers / Society: – Power pool price arbitrage reduces price volatility, – Enables renewable energy, reduces GHG emissions. www.rockymountainpower.ca

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What CAES Needs to Succeed • A Level Playing Field – one charge for using the transmission system like other generators and out-ofprovince tie-lines • All North American Regional Transmission Organizations are working toward accommodating Energy Storage through tariffs that recognize the inherent utilization and benefits • AECO’s present DTS tariff will not accommodate Energy Storage including CAES • Easy access to Alberta’s abundant salt formations for the purpose of compressed air energy storage.

www.rockymountainpower.ca

ASISt Project Status Geo-technical studies completed for cavern design at preferred site Environmental scan completed for Alberta and Sask site options Funding awarded from Alberta and Canadian governments University of Alberta awarded preliminary design review study University of Calgary carrying out a Pool price elasticity study AESO reviewing Transmission Tariffs as they pertain to energy storage projects. • RMP looking for strategic partners and investors • • • • • •

www.rockymountainpower.ca

Contact Information Jan van Egteren President 403-710-6300 [email protected] Lorry Wilson Chairman 403-815-6565 [email protected] Bill Kennedy VP Engineering 403-585-3037 [email protected]

www.rockymountainpower.ca

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