Shell International Exploration & Production Inc.

Stationary Energy Storage: An Industrial Perspective

Elizabeth EndlerProgram Lead, Advanced Energy Storage11 March 2019Presentation for ARPA-e DAYS Kickoff Meeting, New Orleans, LA

Definitions & cautionary note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to “joint ventures” and “joint operations” respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this [report], including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2016 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 11 March 2019. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. This presentation may contain references to Shell’s website. These references are for the readers’ convenience only. Shell is not incorporating by reference any information posted on www.shell.com. We may have used certain terms, such as resources, in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.

Energy system context for electrification

Role for and key aspects of energy storage

Shell’s approach to open innovation

Closing thoughts

Scene Setting

3

Confidential

Electricity storage can supply wide range of system servicesService to be provided impacts technology design

Sources: DTU International Energy Report, DNV GridStor

End User

EnergyManagement

Required location: behind-the-meter

Stab

ility

Cap

acity

Ener

gy.

($/k

W)

($/k

W)

($/k

Wh)

.

Distribution Transmission Utility System

TSO

1kW 10 kW 100 kW 1 MW 10 MW 100 MW 1GW Required power for system service

Seasonal storage

Energy Arbitrage

System Capacity

Reliability

Required location: behind-the-meter

Seco

nds

Min

utes

Hou

rs

>

Day

s

AncillaryServices

T&D investmentdeferralSometimes behind-the-meter

T&D congestion relief

Renewable Integration

(Output smoothing)

Power Quality

Type of system service(value defined by kW/kWh)

Typi

cal

disc

harg

e ti

me

for

syste

m s

ervi

ce❖ Electricity storage can

provide more services than energy arbitrage.

❖ Three main types of system services: stability, capacity and energy provision.

❖ Technical requirements depend on application, scale, and location in the power system.

50 Hz

4

Confidential

Electricity storage can supply wide range of system servicesService to be provided impacts technology design

Sources: DTU International Energy Report, DNV GridStor

End User

EnergyManagement

Required location: behind-the-meter

Stab

ility

Cap

acity

Ener

gy.

($/k

W)

($/k

W)

($/k

Wh)

.

Distribution Transmission Utility System

TSO

1kW 10 kW 100 kW 1 MW 10 MW 100 MW 1GW Required power for system service

Seasonal storage

Energy Arbitrage

System Capacity

Reliability

Required location: behind-the-meter

Seco

nds

Min

utes

Hou

rs

>

Day

s

AncillaryServices

T&D investmentdeferralSometimes behind-the-meter

T&D congestion relief

Renewable Integration

(Output smoothing)

Power Quality

Type of system service(value defined by kW/kWh)

Typi

cal

disc

harg

e ti

me

for

syste

m s

ervi

ce❖ Electricity storage can

provide more services than energy arbitrage.

❖ Three main types of system services: stability, capacity and energy provision.

❖ Technical requirements depend on application, scale, and location in the power system.

50 Hz

5

DAYSprogram target

Range of Energy Storage Technologies Used for Different Applications

6

Source: US DoE Energy Storage Database, June 2018, https://www.energystorageexchange.org/

Range of Energy Storage Technologies Used for Different Applications

7

Source: US DoE Energy Storage Database, June 2018, https://www.energystorageexchange.org/

DAYSprogram target

ShellResearch Connect

Innovating together

Building stronger research partnerships with universities, institutes and government agencies.

ShellVentures

Investing in companies

Providing venture capital for innovative companies across the energy sector.

ShellGameChanger

Fostering entrepreneurship

Funding and supporting early stage startups.

ShellTechWorks

Driving development & deployment

Leveraging proven technologies from outside our industry to solve today’s energy challenges.

Open Innovation

8

Our Approach: Shell New Energies Research & Research ConnectTackling fundamental questions & developing new concepts

Houston

Amsterdam

Bangalore

Shell’s R&D Hubs Key Research Partnerships & Ecosystems

California

UKNL

China

India

Brazil

MIT

Texas

National Labs

RESEARCH & DEVELOPMENT

Our Approach: R&D Examples of Stationary Energy StorageUsing storage at multiple scales for different purposes

Wind Integration in West Texas Observed performance of MW-scale

wind + lithium-ion battery for key

applications

Multiple applications of storage are

technically feasible, which enables

increased revenue capture and improved

economics

EcoGenie House (The Hague, NL) “Living Laboratory” at residential scale

Low-carbon electricity and heating

technologies

Solar PV (rooftop), energy storage

(batteries & thermal), heat pumps,

boilers

Microgrid at Shell Technology Center Houston Commercial & industrial scale

Solar PV, batteries, gas

generator, and load bank

Coupled to building loads

RESEARCH & DEVELOPMENT

11

OUR FOUR CRITERIA ARE:

1. Novel – Is the idea fundamentally different and unproven?

2. Valuable – Could the idea create substantial new value if it works?

3. Doable – Is there a plan to prove the concept quickly and affordably?

4. Relevant – Is the idea relevant to the future of energy?

Our Approach: Shell GameChangerFocus on proof of concept

PROOF OF CONCEPT

12

Our Approach: Shell Gamechanger Powered by NRELSupporting demonstration though complementary expertise

❖ In September 2018, Shell launched a new multimillion dollar, multiyear program to discover and advance emerging clean energy technologies.

❖ GCxN partners early-stage companies with experts from NREL and Shell’s GameChanger program to provide selected startups with access to financial resources, state-of-the-art facilities and world-class technical experts. The assistance is designed to help companies de-risk technology development while accelerating their path to market.

❖ The initial focus is on technologies enabling the grid of the future through long-term energy storage and controls.

❖ For more information, visit GCxNREL.com

PROOF OF CONCEPT

Our approach: Shell Ventures

13

San Francisco

Boston

Houston

London

The Netherlands

Shanghai

Balance strategic fit with financial return

Minority investments$2 – 20 million over series

Deployment focus across global value chain

Lead and follow Active investor, form syndicates

COMMERCIALIZATION

Connected energyConnecting customers to cleaner, more affordable and more resilient energy

14

Community

Deliver integrated solutions to

campuses, airports, and districts for

their electricity and thermal needs.

Load flexibility

Aggregate behind-the-meter assets and monetise

them in traded markets or with utilities.

Commercial/Industrial

Deploy and operate behind-the-meter

energy assets to customer sites,

providing cleaner and more

affordable energy.

Residential

Use our digital infrastructure to

provide convenience and sell energy

products through our retail energy

partners.

DEPLOYMENT

Solar and storage

15

Targeted investmentsAcquired 44% interest in Silicon Ranch, USA

Acquired 49% interest in Cleantech Solar, Singapore

Retail solar contracts with Sunseap Group, Singapore

Deploying solar at our own assetsDeployed on-site solar projects at fuels distribution terminal in

Stockton, California, USA and chemical processing facility in

Moerdijk, Netherlands

DEPLOYMENT

Closing thoughts from my experiences

• For energy storage, history suggests that there are multiple paths & no easy answers

• However, knowing what problem you are solving, what questions you are asking & answering, and what hypotheses you are testing makes the process much more straightforward

• Use the numbers to evaluate progress

• What are your performance & cost benchmarks? What do you need to tackle first?

• What might a customer pay for this?• What market sizes and shares are needed for commercial

success?

Thank you for your attention!

AcknowledgementsMany thanks to the following for supporting the work described today

Our global external research partners & their teams –

UC-Berkeley, UCSD, LBNL, NREL, UT-Austin, Rice, MIT, Oxford, Cambridge, Imperial College, IISC, CAS-IoP,

SNU, TU/D, PTG/e

Our internal teams –

Advanced Energy Storage, Energy Systems Integration & Storage, New Energies Research & Technology,

Computational Materials Science, Analytical, Catalysis, Materials, Research Connect & GameChanger, Shell

Ventures, New Energies, Chief Scientists, IP, Contracting & Procurement

Numerous former colleagues who laid the foundations for this work to exist and on which we continue to

build.17