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About AES Energy Storage

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About the AES Corporation:

Mission: Improving lives by providing safe, reliable and sustainable energy solutions in every market we serve.

AES Serves
10M
CUSTOMERS

6 MARKET-FACING
STRATEGIC BUSINESS UNITS

4 CONTINENTS 8
UTILITY
17 COUNTRIES COMPANIES

21,000
$37B $15B 36,000 MW GLOBAL
TOTAL ASSETS TOTAL 2015 GENERATION CAPACITY WORKFORCE
OWNED & MANAGED REVENUES

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Advancion® is recognized as the leading solution for grid storage

“AES has led the market in terms of

innovative offerings. AES is the first
company to integrate into the grid, a
power storage solution based on Li-ion
batteries and the first to offer its services
to system operators " #1 Energy Storage Systems
Integrator – 2015 & 2016 2016
-Navigant Research 2016 International
Edison Award

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Nearly a decade of storage project experience is built into AES Advancion

energy storage technology solution

Masinloc
436 MW Los Andes Angamos Kilroot Netherlands Philippines
In operation,
construction or late
stage development

2011 2013 2015 2016

2007 2008 2009

Carina Barbados Laurel Mountain Tait Warrior Run Harding Street Alamitos
2020

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Global Trends in Energy Storage

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Several markets are requesting Energy Storage (ES) for

various applications

Ontario- Tender for
50MW
California – Regulatory Targe of
1,325MW de ES for 2020
▲ Long Island – Tender
for 150MW
▲
▲ ▲
Reino Unido – Storage included in new capacity charge
▲
Alemania – incentives for solar-storage hybrid
▲
facilities
▲ Japón – Wide incentives for wind-
storage hybrid facilities
Italia – 75MW

▲ Hawái – Tender for ▲ Puerto Rico – Renewables

200MW are required to include ES ▲ Philippines – Storage included
in the ancillary service
Renewables are payment scheme
required to include
ES

Chile – Storage to provide

▲ ancillary services for the grid

More than 2GW of ES are being tendered worldwide.

More than 3GW for new applications in development.
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Expected Energy Storage Growth in Emerging Markets

Project Development by Segments

Source: Navigant Consulting ,2016

Project Development by Geographic Areas

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Proven solution for multiple applications

Enhancing grid efficiency and reliability

Source:
Rocky Mountain Institute’s The Economics of Battery Energy Storage
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Proven solution for multiple applications
Enhancing grid efficiency and reliability
SEGMENT
LMS100 Turbine
Credit: GE
1. Generation Alternatives
2. T&D Alternatives
3. Commercial & Industrial
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OFFERED SOLUTIONS
1. Capacity Release
Ancillary Services
2. Frequency Regulation/Ancillary Services
3. Flexible Peaking Power • Fast Frequency Regulation
4. Renewables Integration • Primary Reserve
• Secondary Reserve (Spinning Reserve)
5. Capacity Release • Tertiary Reserve
6. Investment Deferral, Replacement • Cold Reserve
7. Local voltage problems relief • Ramp up/down Control
• Dynamic Reactive Response
• MVAR Capacitive
• MVAR Inductive
• Black Start up
8. Demand-charge Management
& Reliability
9. Energy Efficiency
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Typical Energy Storage Systems

290 MW Huntorf CAES in 20MW Beacon Power’ Flywheel
Germany (1978) System, NY (2011)

• Flywheels

• Batteries (Lead Acid & Li-Ion)

• Pumping Hydro Storage (PHS)

• Compressed Air Energy Storage (CAES)

• Superconducting Magnetic Energy Storage (SMES)

AES Carina @ IPL
Primera batería Li-ion de
alta potencia en el
• Supercapacitors Energy Storage mundo
Feb 2008

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Applications of Energy Storage Systems

Time Energy Reserve/ Daily Peaking

Months

Isolated
Operaton Days

Emergency (UPS) Hybrid-Solutions

Firm Hours
Flexible
Capacity
Minutes
Ancillary Services

Stability seconds

1 kW 10 kW 100 kW 1 MW 10 MW 100 MW 1000 MW Capacity

Behind-the-Meter Utility Scale /Remote Power Systems

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AES Advancion®
AES Energy Storage Solution

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AES Advancion®: 4th AES Energy Storage Generation

1st. Generation (2008)

4th. Generation (2015)

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AES Advancion® Solves the “Energy Trilemma”

A smarter investment for the energy infrastructure

Today’s Utility Goals: Advancion® Offers:

Safely meet
customer needs

Secure
Deliver
predictable and
sustainable
low energy
energy
costs

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What is Advancion®? Li-ion Batteries on the grid

Modular, scalable arrays with high availability from current technology

BATTERY CELLS BATTERY PACKS

BATTERY MODULES
ADVANCION NODES ADVANCION ARRAY
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Advancion® is a complete solution for clean flexible power

combined with full turn-key delivery
Available around the globe for third party users of Energy Storage assets

KEY DIFFERENTIATORS
1. Nodal architecture
2. Proprietary and patented controls
3. Supply chain and Advancion Certification Program
4. AES operational experience

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Advancion® Nodal Architecture offers a scalable

design available in multiple form factors
Building and containerized solutions offer flexibility in deployment

 Smaller, autonomous units of control

 Optimized design is modular and compact
 Planned augmentation
 Improved serviceability

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Advancion® patented control system unlocks

the full value of the Nodal Architecture

DISTRIBUTED CONTROL SYSTEM

 Each node is controlled independently,
enabling simultaneous operations
 Increased plant performance
 Improved battery life
 Reduced auxiliary consumption

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Advancion® nodal architecture solves the problem of

technical obsolescence
 Advancion arrays are built with space to grow.

 When the need arises, the latest battery technology can be incorporated into the array,
and function seamlessly with existing components.

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Advancion® Certification for world class component suppliers.

Enables rapidly deployable projects around the globe

Certified Suppliers

>60% of world wide Lithium-

Ion Battery market share

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Benefits of AES Advancion®

Most Dense Future Proof Least Cost Integration Largest Supply Chain
Increased siting flexibility and Open architecture is technology Abstracted architecture provides The latest battery technology
decreased balance of plant cost agnostic access to multiple validated available at competitive prices
suppliers

5x more compact Li-Ion battery continue to fall Simplified integration 60% of Li-Ion battery market

Most Proven Market Massively Parallel Standardized BOP

Simple Building Design
Algorithms 80/40 kW Blocks Components
Adaptive and optimized to local High availability and resilience Easy to scale and enables at- Rapid and straightforward
market conditions against subcomponent failure scale purchasing power deployments

$20M savings
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Forward PJM customers
Statements Advancion 4 EAF >96% >100MW in BOP purchases Projects delivered in 6 months
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AES’ Advancion®
+ Renewable Energy:
Applications

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Advancion® is the Solution for Your Renewable Integration

Zero on-site emissions and no noise

Flexible siting
Uses lowest cost and cleanest grid resources
Vs

On-site emissions and noise

Siting restrictions
Long term commitment to fuel supply contracts
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AES Advancion® unlocks more value from renewable plants

Three main applications for pairing storage with renewables

Renewable Renewable
Grid Stability Plant Stability Firm Energy
Grid services such as Smoothing and ramp Predictable and firm
frequency regulation limiting service to keep renewable energy
delivered from the renewable output delivery
renewable plant paired stable
with storage

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AES Advancion® unlocks more value from renewable plants

Each application has different technical considerations

Renewable Renewable
Grid Stability Plant Stability Firm Energy
Shorter durations of Duration depends on Size and duration
storage make sense for the level of smoothing depend on the amount
this application. ~30 or ramp limiting of firm energy delivery
minutes to an hour. required. ~30 minutes required. ~1 hour to 8
to 2 hours. hours for 24/7
baseload.

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Grid Stability: AES has provided frequency regulation from our

Laurel Mountain wind farm since 2011 with energy storage
Serving US PJM Interconnection; integrated with eight power systems

• Frequency Regulation
• Renewable ramp control

IMPACT
 Saving $20m/year
 Competitive bid, wins every
hour vs. traditional
 Reduces regulation by ~1.7x
 Saves 62,000t of CO2, 329t of
SO2 & 97t of NOx / year

98 MW Laurel Mountain Wind Farm

with 64 MW Storage Resource
West Virginia, USA

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Advancion Renewable Peaking and Firming: Advancion

Reducing Volatility • Uses lowest cost
Most predictable peaking and firming solution energy source
to address intermittency • Future-proofed:
technology agnostic
• Zero onsite
emissions and
Fossil noise
Fueled
Peaker
• 20+ year
lock-in to
Spot Market unknown
or Financial fuel prices
Contracts
• Highly volatile /
expensive

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Renewable Plant Stability

Without
Advancion®
Purchase from
spot market to
mitigate
Advancion® alleviates ramping 600 variability

and intermittency concerns 500

Advancion®
output
Lets the rest of the generation
400
complements
renewable
300 energy
portfolio operate at higher Resulting in a
200
efficiency smooth and
predictable
100 production

Provides a more cost-effective 0

shape

alternative to local grid -100

investments to support -200

renewables Solar Output Battery Output Combined Output

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Firm renewable energy need: solar generation peaks in midday but

demand for electricity is highest in the evening
California Electricity System: Net Load
Peak system
load

Max solar
generation

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Firm Renewable Energy – Flexible Peaking Capacity

Advancion® delivers capacity
when most needed

600

Advancion® can use renewable 500

energy to provide peak capacity

400

Reliable delivery of peaking

Power
300

energy with zero associated

200
emissions
100

Mitigates renewable over-

0
production during off-peak hours 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour in Day
Peak
Solar to Grid Battery to Grid (discharge) Demand
Solar to Battery (charge) Solar Output (without Advancion)

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Firm Renewable Energy – Baseload Renewable Energy

 Using renewable source as fuel, 600

Advancion® can provide firm 500

capacity 24/7
 Size: Solar PV capacity roughly 3x
400

baseload, storage capacity 2x 300

baseload, duration ~8 hours

200
 Ideal for large, steady, isolated
load scenarios 100

 Zero fuel use  zero fuel delivery 0

costs 1 2 3 4 5 6

Solar Baseload
7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Battery Baseload (discharge) Battery (charge)

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Regulatory and Market Barriers

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Common issues that make it difficult to adopt the technology

• Lack of knowledge about the energy storage technology and its applications
• Market and regulatory design for conventional generation
 Lack of definition of energy storage in the regulatory framework
 Lack of definition of energy storage capabilities and services offered

• Distorted and / or inadequate electricity market

 There is no obligation for generators to provide ancillary services.
 Not enough pay for ancillary services
 Renewables are not required to regulate its operation and / or reserve contribution

• Not paid for quality of performance (speed, accuracy and response)

Example:
 Experience has shown that 1MW of fast regulation equals 2.6MW of traditional regulation

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 Thanks!
Julio Diaz Cohen
Commercial Director MCAC SBU
julio.cohen@aes.com
+507 6480 0059

AES Energy Storage

www.aesenergystorage.com