employment impact assessment: pennsylvania confidential | march 2012
TRANSCRIPT
Employment Impact Assessment: Pennsylvania
confidential | March 2012
Eos: Energy Storage Solutions Provider
* One full cycle includes full charge, discharge and additional frequency regulation over the course of one full day.
Mission: Providing the utility and transportation industries with safe, reliable, low-cost energy and power storage
Eos AuroraGrid Product:
• 1MW/6MWH energy storage system for the electric grid (1 MW optimal power for 6 hours, with surge capability)
• Safe, non-toxic, stable, reliable, low capital and operating cost• Battery price for major orders: $1000/kW, $160/kWh• 30 year life, 10,000 full cycles* • First ever long-life rechargeable zinc-air battery• Scaling up battery prototypes (17kW/100 kWh units) for initial manufacturing in 2012 and
delivery of MW scale systems to first customers in 2013
Vehicle Product:
• 50kW/100kWh dual zinc-air and long-life lead-acid capable of >340 mile range for $12,000
Value Proposition:
• Cost competitive with incumbent technology: gas-fired turbines for additional generation capacity and gasoline powered vehicles
Customers: • Customer LOIs: >100 MW of product over 5 years• Eos Genesis Program for utility early adopters and strategic auto industry partners
2
The Challenge: Adapting to the Future Grid• Energy demand growing — projected to grow globally by 36% from 2010 to 2035, including energy
efficiency increases 1
• Aging generating capacity needs to be replaced — by 2025, most coal-fired plants and by 2030, most nuclear plants, will need to be rebuilt or retired 2
• Need for new transmission and distribution — $180B of planned US transmission projects 3
• Infrastructure driven by peak demand — 25% of distribution and 10% of generation and transmission assets (worth multi hundreds B$) used less than 400 hours per year 4
• Growing renewable generation that is intermittent leads to grid instability and—in some cases—curtailment or negative pricing 5
31) IEA, 2010. 2) NERC, 2010. 3) Quanta, 2010. 4) EPRI, 2010. 5) CAISO, 2007.
The Solution: Energy Storage
Energy Storage Usage Can:• Improve efficiency and profit of existing generating assets• Defer costly upgrades to transmission and distribution infrastructure• Avoid additional peak generating capacity investments• Increase adoption and profitability of renewable energy
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Electricity is the world’s only supply
chain with NO storage
Energy Storage Benefits
End User Benefits• Time of Use (TOU) Energy management (arbitrage)• Demand charge reduction• Electricity supply reliability improvement (backup)• Electricity supply quality improvement
Grid/Utility Benefits• Electricity peak shifting (arbitrage)• Supply of flexible, distributable capacity • Ancillary services
✴ Load following✴ Frequency regulation✴ Voltage support
• Transmission congestion relief / upgrade deferral• Renewable energy integration support via supply
firming and time shift
5
Global Market: $500B
BCG:
Piper Jaffray:
Worldwide, the energy storage market is forecasted to grow over the next five years at a CAGR of:
Lux Research:
6
1) BCG, 2010, estimate 280 Euros. 2) PiperJaffray, “Energy Storage”, February 2009. 3) http://www.marketwire.com/press-release/Smart-Grid-Energy-Storage-Market-to-Grow-397-Annually-Through-2013-1329898.htm 4) http://www.evworld.com/news.cfm?newsid=18336
$400B1
$600B2
40-55%3
$64B/year 4
High Capital Cost Limitation
EPRI, Electricity Energy Storage Technology Options, 2010. 7
US Market Sizes of Different Energy Storage Applications based on the Estimated Present Value of their Benefits
At a Li-ion capital cost in the >$1000/kWh range there are only a few GW of demand
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Eos Low Capital Cost Opens Markets
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US Market Sizes of Different Energy Storage Applications based on the Estimated Present Value of their Benefits
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EPRI, Electricity Energy Storage Technology Options, 2010.
Market opens up for solutions with Eos’ capital cost of $160/kWh
Eos Aurora Meets Key Requirements
Eos Aurora 1000|6000
Low Capital Cost $1000/kW initial price; $160/kWh
Large volume of energy and power
1 MW/6 MWh standard system size (made of 17KW/100KWh building blocks)
Long life-cycle Designed for > 10,000 true cycles* and 30 calendar years of operation
Quick response time Response time: Immediate
Safe to locate in urban load centers
Non toxic, environmentally benign and stable
Instantly deployable Delivered in a standard ISO 40’ shipping container
Low operating and maintenance costs
No periodic replacement of components (e.g., membranes, cells, battery packs) required
* One full cycle includes full charge, discharge and additional frequency regulation over the course of one full day. 9
Competition
• Peak load reduction via energy efficiency and demand response
• Capacity additions from gas peaking plants• New transmission and distribution spending• Other energy storage providers
10
Eos Superior to Gas Peaking Plants
* Chart Notes: Levelized Cost of Energy included cap. fix, and var. costs. Gas peaking cost estimate from Lazard, 2009, midpoint of est. range. Assump: 150MW facility, Capital cost $1,125/MW, Heat rate 10.5 MMBtu/MWh, Cap. factor 10%, Facility Life 35 years, Construction time 25 months. Eos: 2MW plant, 25% cap. factor (6hrs of energy production), Round-trip efficiency of 75%, Cap. cost for entire system with Eos battery $1.7/watt, O&M costs: $20,000/year for a 2MW/12MWh operating costs, Facility Life 30 years.
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Eos utility scale energy storage systems can be cheaper than gas peaking plants when compared at realistic operating conditions
Current World Electric Energy Storage Capacity
Fraunhofer Institute. EPRI, Electricity Energy Storage Technology Options, 2010. 12
Today’s electricity energy storage isalmost exclusively pumped hydro
Sodium-Sulfur Battery316 MW
Lead-Acid Battery~35 MW
Nickel-Cadmium Battery27 MW
Flywheels<25 MW
Lithium-Ion Battery~20 MW
127,000 MWel
Over 99% of total storage capacity
Pumped Hydro
Compressed Air Energy Storage440 MW
Redox-Flow Battery<3 MW
13
Eos Energy Storage vs. Competitors
Eos
Low capital cost/kWh
Large volume of energy storage capacity
Long life (high # of life-cycles)
Quick response time (milliseconds)
Safe (non-toxic, non combustible)
Flexible to locate (in cities)
Low O&M costs
In commercial production
Pumpe
d Hyd
roCAES
-Belo
w Gro
und
Advance
d Lea
d Acid
Lithium
Ion
Zinc B
romine
Vanad
ium Redox
Sodium
Sulfu
rLe
ad A
cid
= Good = Medium = Poor CAES
-Abov
e Gro
und
GST: Low Cost per Unit Energy and PowerEos: Low Cost per Unit Energy and Power
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Eos offers the lowest
capital cost solution for
energy storage for
utility transmission
and distributionsupport
15
Levelized Cost of Peak Energy
For renewable
integration and
load shifting
applications,
Eos’ levelized
energy cost is
among the
lowest along
with pumped
hydro and
combined cycle
gas turbines
* Non-Eos data source: EPRI, Electricity Energy Storage Technology Options, 2010. Natural gas fuel cost range: $6.5 -8/MMBtu. Levelized cost of energy includes cap. fix, and var. costs. Gas peaking cost estimate from Lazard, 2009, midpoint of est. range; assumes: 150MW facility, Capital cost $1,125/MW, Heat rate 10.5 MMBtu/MWh, Cap. factor 10%, Facility Life 35 years, Construction time 25 months. Eos: 2MW plant, 25% cap. factor (6hrs of energy production), Roundtrip efficiency of 75%, Cap. cost for entire system with Eos battery $1.7/watt, O&M costs: $20,000/year for a 2MW/12MWh operating costs, Facility Life 30 years.
EV Demand: The Context
• Demand drivers for hybrid, plug-in hybrid and electric vehicles: Oil price volatility Energy security Climate change
16
EV Demand: The Context
• Transportation accounts for 2/3 of US oil consumption
US Transportation Databook, 2011
The Math (Mbd)US oil consumption: 18.7 (of which vehicles: 10.7)
Domestic production: 9
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Widespread adoption of EVs could reduce oreliminate US oil import dependence
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Global EV Battery Opportunity: > $33B/yr. Global vehicle focused energy storage market estimate:
Lazard Capital Markets, Shrestha, Sanjay, Martin, Sarah and Zhang, Jenny (Lazard Capital Markets), “Alternative Energy & Infrastructure”, March 5, 2010
Market elasticity
high for low cost
(Eos) EVs: Would
you buy an EV if it
had the same
range and price
as an ICE vehicle?
• 2016: $16B • 2020: $33B
EV Challenges
• High battery cost $1,000 to $1,200/kWh sale price to OEM’s today $250/kWh goal from US Advanced Battery Consortium
• Driving range too short 40-190 miles today vs goal of 350 miles
• Charge time too long 7 hours to charge 24kWh Nissan Leaf
• Safety
BCG, Batteries for Electric Cars, 2010.http://www.nissanusa.com/leaf-electric-car/faq/list/charging#/leaf-electric-car/faq/list/charging 19
Eos’ Electric Vehicle Strategic Partnerships
Potential EV Configurations:
* http://www.bcg.com/documents/file36615.pdf, pg. 5.
Eos Vista zinc-air flow battery
Eos Aurora zinc-air battery • >300 Mile driving
range• Same cost as ICE
vehicle• $0.02/mile fuel cost• Refuelable in
addition to rechargeable
• Lower cost per kWh
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"These are magical distances. To buy a car that will cost $20,000 to $25,000 without a subsidy where you can go 350 miles is our goal."
- US Energy Secretary, Steven Chu
Other Eos Technologies Under Development
Eos Vista Zinc-Air Flow Battery
Eos Innovation:
• Based on Eos zinc-air technology • Allows decoupling of the power and energy of the battery for
more flexible configuration and lower cost per kWh• As battery discharges, the used electrolyte is stored and
replaced, and more zinc is added, allowing for battery operation to continue
Addressable Markets:
• Electric vehicles • Stationary power
Status: • Further design development required
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EVs: Battery Cost vs ICEs
Morgan Stanley, 2011
Eos Goal: 100-200 $/kWh
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Gasoline Car vs Li-ion EV vs Eos EV
Toyota CamryEV with Li-ion(Nissan Leaf)*
EV with Eos Aurora Zinc-Air Battery
EV with EosVista Flow
Battery
Capital Cost of Car
$25,000 $33,000 $25,000 $25,000
Propulsion System
Internal Combustion Engine
24 kwh Li-ion battery
80 kw motor
Eos Zinc-Air battery, Eos lead
acid battery
Eos Zinc-Air Flow battery, Eos lead
acid battery
Range (miles) 400 75-100 340 400
Refueling Time
3 mins5-7 hrs with
220-240V charger6 hours 3 mins
Cost of fuel/mile at$4/gal gas
.20 .03 .02 .02
HP (peak) 179 hp 107 hp 175 hp 175 hp
*http://www.nissanusa.com/ev/media/pdf/specs/FeaturesAndSpecs.pdf 23
Innovation: First Ever Rechargeable Long-Life Zinc-Air Battery
1) Started with a safe, robust, well developed technology: Widely used today for hearing aids, medical equipment Electrolyte (ZnCl2): safe, widely used in toothpaste
(Triclosan)2) Innovated to resolve historic challenges that
prevented rechargeability 3) Designed product for ease of scale manufacturing
at competitive cost
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Eos energy storage: “low-cost, rugged, long-life, non-toxic and compact design for stationary and mobile applications.”
- KEMA Energy Consultants
confidential
What is a Zinc-Air Battery?
Zinc or Metal Air provides highest potential energy density for batteries
• Widely used today for high-energy density, low-cost, single use applications• e.g. hearing aids
• Based on similar chemistry used in standard alkaline AA and AAA batteries (Zn/MnO2)
• Replaces manganese dioxide (MnO2 ) with thin air electrode, saving space and cost • Air electrode contains carbon and catalysts, which absorb and catalyze oxygen to allow it
to react with zinc, eliminating need to contain cathode reactant in battery so most of battery can be filled by zinc anode, saving space
Energizer, Zinc Air Prismatic Handbook 25
Zinc-Air Advantages
• High energy density• Materials are safe, low cost, locally
sourced, readily available Zinc: • Cheap: One of the world’s most
plentiful and inexpensive metals • Non toxic• Locally available - three of top five
zinc producers: US, Canada and Australia
Air • Inexpensive to manufacture• Environmentally friendly
Other batteries need to hold a large amount of cathode reactant, equivalent to pulling a trailer full of gasoline oxidizer (air) behind your car. Zinc-air batteries have higher energy density since they—like gasoline engines—use ambient air as a reactant, and therefore don’t need to carry it in the cell, increasing energy density
Vs.
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Expert Opinions of Eos
• SCE, Rittershausen J and McKonah, Moving Energy Storage from Concept to Reality, 2011. 27
“Metal air batteries… have the potential to be lower-power,long-duration energy storage devices…”
- SCE, 2011*
“ Eos has developed a number of improvements for the conventional zinc-air battery to become a viable secondary battery.”
- KEMA Energy Consultants
“(Eos’) novel non-flow design offers elegant approach to management of prior zinc-air issues.” - Electric Power
Research Institute
“Metal-air batteries contain high energy metals and literally breathe oxygen from the air, giving them the ability to store extreme amounts of energy.” - US Energy Secretary, Steven Chu
IP Protection
• Obtained and applied for multi-layer patent protection on key intellectual property Cell configuration and architecture Cathode design, materials and catalysts Electrolyte and additives System configuration and electrolyte system
• Three major patents registered and pending in the US and abroad, and will be applying for at least one more
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Over 400 MW of Planned Development
• Formed JV partnership with Plaza Construction and Fisher Brothers to co-develop 400 MW by 2020
• JV will build energy storage as merchant power plants both in load centers (behind the meter) and directly on the grid
29confidential
Potential Applications for Eos’ Storage Solution
End User Benefits• Time of Use (TOU) Energy management (arbitrage)• Demand charge reduction• Electricity supply reliability improvement (backup)• Electricity supply quality improvement
Grid/Utility Benefits• Electricity peak shifting (arbitrage)• Supply of flexible, distributable capacity • Ancillary services
✴ Load following✴ Frequency regulation✴ Voltage support
• Transmission congestion relief / upgrade deferral• Renewable energy integration support via supply
firming and time shift
30
a variety of overlapping revenue streams
31confidential
MARKET/TECH
2011 2012 2013 2014 2015
Eos Aurora Grid Storage• Zn-Air
JV Pre-Dev.
R&D
Pilot tests
JV Site Prep
Manufacture PrototypeQ1
JV Deployment
Marketing and Sales
Scale Manuf.
Business Timeline
• Manufacturing commencing in Q1 2013• Scale manufacturing in 2013 / 2014 • Joint venture (JV) for project development launching in Q4
2011
Eos Energy StorageInvestment and Job Creation
Immediate• Establishment of corporate headquarters, laboratory and engineering center• Direct jobs: 42• Average salary: $80,000• Investment: $10M
2013-2020• Establishment of three production facilities each with a 300MW/year capacity• Direct jobs: 140/facility = 420 full time positions• Average salary: $45,000• Investment: $28M/facility = $84M• Indirect job creation:
Full time positions: 682 Total Indirect Labor $ Generated: $33,548,745
32confidential
Development Joint VentureInvestment and Job Creation
Immediate:• Establishment of corporate headquarters• Direct jobs: 25• Average salary: $100,000
2013-2020• Establishment of 400MW of energy storage facilities• Direct jobs: 366• Average salary: $80,000• Investment: $1.2 Billion• Indirect job creation: multiplier typical for NJ construction industry
33confidential
Summary• The Eos Aurora will be a safe, reliable, non-toxic, non-combustible, low cost zinc-air
energy storage system for the electric grid that can be sold for $1000/kW and $160/kWh, rechargeable over 10,000 cycles (30 years)
• Superior value proposition to incumbent technology: gas-fired turbines for additional generation capacity and gasoline engines for transportation
• Scaling up battery prototypes (100 kWh units) for initial manufacturing in 2012 and delivery of MW scale systems to first customers in 2013
• Development joint venture with Plaza Construction/Fisher Brothers will focus on developing energy storage as merchant power plants
• Over 1500 jobs created with investment of $1.3 Billion 2013-2020
• One full cycle includes full charge, discharge and additional frequency regulation over the course of one full day. 34
