Alberta Saskatchewan Intertie Storage

ASISt Project

A CAES Study of Energy Storage for Alberta Presented to the Alberta Energy Storage Symposium November 19, 2013
Rocky Mountain Power (2006) Inc. www.rockymountainpower.ca 403 710 6300

Conventional CAES System

PC = Compressor power in PG = Generator power out

Air Storage

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Proposed Facility Location

ATCO Substation A SaskPower Substation Lloydminster

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Proposed ASISt Storage Facility

Discharge (Generation) 125 - 150MW. Charge (Compression Load) 100 - 200MW. Storage Capacity 12 to 60 hours:
# of caverns 2 (each 450,000 meters)*.

Initially connect only to AIES. Future AC interconnect with SaskPower:

Create a virtual intertie.

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

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Economic Spin off Benefits

Construction employment direct & induced:
1679 over 2.5 years.*

Permanent jobs created:

10 to 15.**

Permanent employment income direct & induced:

$1.6 - $2.5 MM/year.*

Sources:
*Lloydminster Economic Development Corporation ** Lessons From Iowa.
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ASISt Project Status

Conditional funding from AI-EES & NRC-IRAP $350K. (Matching equity required). Initial geologic report (AITF) substantially completed. Underground engineering studies underway (Soltech Projects). SASR process with AESO underway (b7kennedy and Associates Inc.)

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Salt Core Near ASISt Location

Nearly Pure Halite

Sylvinite

Anhydrite Layer
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Operations & Financial Model.

Operations Module:
Historic hourly Alta (and MISO) pool prices, hourly wind data for each Alta. wind farm, Charge/discharge algorithms mimic storage. Calculate storage volumes and annual revenue for:
in-Alberta time of day arbitrage, operating reserves services in Alberta and, inter-regional arbitrage (if AC ties to both Ab. & Sask.)

Financial Module:
ASISt as a merchant facility - Could be grid asset, Standard financial outputs IRR, NPV, DSCR etc.
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Historic Wind Energy Discount

$100.00

Annual Averages of Hourly Alberta Power Pool Data Jan. 1 2008 - Jul. 31 2012.
$90.00 $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00

$/MWh

$10.00
$0.00 -$10.00 Ave Pool Price Ave Wind Price

Ave
$64.52 $48.46 -25%

2008
$89.95 $71.62 -20%

2009
$47.81 $42.22 -12%

2010
$50.88 $38.03 -25%

2011
$76.22 $49.97 -34%

2012
$52.74 $17.41 -67%

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Netback Financial Model 150MW

Calculate historical revenue uplift, net of storage & transmission costs, for wind farms. Can do for all types of generation if hourly data available.
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Netback Example: Benchmark Energy Revenue MM/yr

CAD $74.29

Revenue from Direct Sales MM/yr $68.72 Revenue from Storage Retiming MM/yr $66.20 Gross Energy Revenue MM/yr $134.92 Less: Cost of Losses Annualized Storage Costs Equals Netback from Wind Time Shift Arb. MM/yr $84.34 14% Add: Operating Reserves Revenue Inter-regional Arbitrage Revenue Equals Total Netback Benefit MM/yr $99.84 34% Note: all values are estimates by ASISt and are subject to change.

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Twelve Month Work Plan

Complete FEED studies:
in-depth geo-tech analysis, above ground engineering, Facility configuration optimization studies, High level environmental review.

Continue SASR process. Commercial support. Procure land options and mineral rights.

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Why Have We Chosen CAES?

Each ES technology has advantages. ES market will grow:
e.g. California has mandated procurement of 1.3GW of ES by 2020. Enable more wind and solar generation.

CAES and PH are best large scale energy storage technologies.

Source: Rastler, D. EPRI 2010

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Why Have We Chosen CAES?

Low cost

Source: EPRI 2010

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Why Have We Chosen CAES?

Low technology risk. (Two facilities built.)

110MW CAES plant in McIntosh Alabama Commissioned in 1991

290MW CAES plant in Huntorf Germany Commissioned in 1978

Generation redundancy:
Like hybrid vehicles - two energy inputs, Operate as SCGT if stored energy depleted.
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Why Have We Chosen CAES?

Difficult to find good PH sites in Ab. & Sask. Ab. & Sask. have good geology for CAES
AITF geologic report said:
initial findings indicate that insoluble anhydrite layers are of sufficiently low thickness that salt dissolution and cavern formation may be undertaken; and Candidate units for brine disposal include the Basal Cambrian Sandstone and the Cretaceous Dina Member. The Dina Member, however, is a more likely candidate, due its shallower stratigraphic location and high porosity and permeability values.

Multiple water sources for brining available.

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Why Have We Chosen CAES?

Many types of potential customers
AESO for Op. Res. (generation & compression). Intermittent generators (wind/solar). Power traders intra-Alberta & inter-regional. Distributors & Industrials - reduce price volatility. Data centers (co-location):
Growth market, Requires high degree of power source security, CAES provides built in back up generation. ASISt may access power from both Alta. & Sask.
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What needs to happen in Alberta

DTS rates should not apply (except for station load):
Storage is not an end use customer, System benefits from ASISt.

DOS rates may also not apply:

Transmission double counting, ASISt a net generator and already pays STS.

Change rules for Operating Reserves:

Include dispatcheable load (compression), Include separate ramp up & ramp down for RR.
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Industry is Adopting ES Policy

FERC EL01-70-000 (June 2001) delivery of electric energy into ES resources is an energy exchange transaction and does not involve the consumption of electric energy. US Storage 2011 Act (Nov 2011) is a bill to recognize ES as a stand-alone technology and to provide an energy investment tax credit (ITC) for energy storage property connected to the grid. PUCT / ERCOT (April 2012) clarifies that wholesale storage is not subject to ERCOT charges and credits associated with AS obligations or other load charges and allocations. California Bill AB 2514 (Sept. 2010) directed the CPUC to define appropriate ES procurement targets. October 2013 decision requires 1,325MW of ES procured by 2020.

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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.
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Contact Information
Jan van Egteren President 403-710-6300 jan.vanegteren@rockymountainpower.ca Lorry Wilson Chairman 403-815-6565 lorry.wilson@rockymountainpower.ca
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