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Ecocentric Blog

Interview with Brian Perusse of AES Energy Storage

1. What is energy storage and how is it different than energy generation?


Energy storage is an emissions-free capacity resource that is fast, highly flexible, and
always on and ready to provide power services to the grid. It is different from other
energy generators as it uses the electric power grid as a fuel and can either deliver
or withdraw power from the grid depending on what is needed and when its most
valuable. The unique ability to both supply power and store power on command
makes the grid more efficient and more reliable.

2. Describe AESs energy storage technologies. How do they compare to other


energy storage technologies?
AES Energy Storage delivers storage-as-a-service, eliminating the need for pilot
testing, system integration work and technology selection risk. It is not possible to
simply buy a battery today and just plug it into the grid, like you might a replacement
cell phone battery. AES will perform all of the work necessary to permit, design,
engineer, procure, construct and operate an energy storage facility to meet a specific
need of the utility. More importantly, AES has developed a control platform that will
optimize the performance of the energy storage system for each specific customer.

3. How did AES get into the energy storage business?


AES Corporation, the parent company of AES Energy Storage, is one of the largest
power producers in the world and has a thirty-year history of being an innovator in
the power sector. This started with the use of Circulating Fluidized Bed boilers and
continued through the financing of advanced combined cycle gas turbine technology,
new wind turbines and the latest thin-film solar technologies, such as cadmium
telluride. AES Energy Storage was founded in 2007 to focus on the commercial
development and operations of grid-scale energy storage. AES Energy Storage
believes that energy storage is ready to play a key role in the clean-energy equation,
providing an emissions-free, flexible power resource to improve the grid today and
prepare for growing renewable generation in the future.

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Ecocentric Blog
Interview with Brian Perusse of AES Energy Storage

4. Does AES have energy storage projects/systems in operation?


We currently have 72 megawatts (MW) in commercial operation or construction and
have a growing pipeline of over 500 MW of projects in near-term development. We
currently operate commercial energy storage facilities in West Virginia, New York
and Northern Chile. In developing our business, we have worked with leading power
system operators including the New York ISO, PJM Interconnection,
ERCOT in Texas, California ISO and SING in Chile. We are pleased to have
recently announced the commercial operation of a 32 MW storage project
participating in the PJM Interconnection, the largest regional transmission
organization in the world.

5. Since this is a blog about food, water and energy, 1) does the technology require
water or are there any impacts on water bodies and 2) are there agricultural
applications for energy storage?
1) This is one of the significant benefits of using energy storage. Unlike many
traditional power sources, advanced battery-based energy storage does not use any
water as part of the systems operations. This has two beneficial impacts. First,
AES energy storage systems can be located in places where water considerations
would make it undesirable or too costly to put other types of power projects. And
second, in locations where water restrictions and environmental concerns limit the use
of existing power resources, such as hydro power, our projects can provide the
needed flexibility to continue to provide reliable power on the grid. For these reasons,
the advanced energy storage projects are expected have a positive impact on water
bodies overall.

2) Much smaller scale solar and battery systems can be used in agricultural
applications such as water pumping and irrigation. I am not as familiar with this
application but I know there is some great work going on in places like Morocco,
where I served as a Peace Corps Volunteer.

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Interview with Brian Perusse of AES Energy Storage

6. How does the host community view these projects?


In the United States, we have commercial projects in New York and West Virginia.
We have met with the local communities in these areas to introduce them to the
project, the technology and operations of the system. Given the projects do not have
any direct emissions, do not require water for operations and have limited noise and
view-shed impact, they have been well received by these communities.

7. You have a project proposed for Long Island. Can you describe the scale of the
plan and how that compares to other AES energy storage projects?
We have proposed a 400 MW energy storage project on Long Island as part of a 2500
MW request for proposals conducted by the Long Island Power Authority. This
project expands on the foundation and building blocks developed for our other four
commercial projects. AES has developed a modular approach that allows facilities to
be built as large or as small as needed. All of the building blocks and major
components for this larger project are already in operation at our existing facilities
today and this larger project will just require additional modules to be added. Though
the project proposed is the largest of its kind to date, we believe this size and type of
project will become more customary around the country and the world.

8. How does energy storage fit into the traditional electricity market model in the
United States?
Energy storage can fit into any number of market models and we have deployed
commercial facilities that are being paid for power services the same as other
generators providing the same services today. Going forward, we expect that larger
facilities will be contracted under Power Purchase Agreements, just the same way
that we see wind, solar and traditional power plants developed and procured.

9. Will energy storage affect the electric grid?


Energy storage is an overall power system resource that delivers instantaneous
response to grid operator requests for power, helping to level the variability of
generation and demand on the grid. It allows the grid to absorb any form of energy
more effectively providing operators with a new level of flexibility and confidence
when introducing alternative sources [of electricity] into their power supply mix.
Additionally, it will help improve the overall efficiency of the existing resources by
reducing wear on the power generation fleet and allowing the most efficient resources
to run optimally.

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Interview with Brian Perusse of AES Energy Storage

10. Do utilities have any reservations about integrating energy storage with the
grid?
In the 1970s, many utilities and power systems integrated pumped-storage
hydroelectricity, a method of energy storage that pumps water between two reservoirs
of differing elevation. Advanced-battery energy storage provides the utility with a
generating facility with very similar characteristics, using new technologies.
However, utilities are conservative with the adoption of new technology, as they must
prove that the cost and risk placed on the end consumer is adequately balanced. One
solution to this problem is to channel investment in newer technologies through
independent power producers under contracts, called Power Purchase Agreements.
This is the same structure used by utilities to procure other renewable resources like
wind and solar power facilities. The utility contracts to get the benefits of the new
project, which is paid based on performance, limiting the technology risk while
providing the utility with the advantage of incorporating these more advanced
technologies into their system.

11. Does energy storage compete with or compliment initiatives in renewable energy
and efficiency? How so?
Emissions-free capacity complements renewable resources to help policy makers,
utilities and ISOs achieve clean energy goals. By providing power to the system
when it is most needed via an emissions-free process, advanced energy storage
projects help to keep clean energy sources clean through their integration into the
power grid.

12. What effect does electric storage have on electricity prices?


Energy storage essentially stores energy from the cheapest and most efficient
resources and delivers it at a time when more expensive resources would traditionally
be utilized. In addition to delivering cheaper energy than a peaking-gas plant, energy
storage can provide a number of other benefits to the system, such as deferring
transmission investments and reducing the risk of relying on any one-fuel commodity.

13. Are there environmental benefits to energy storage, if so, what are they?
AES energy storage enables a more efficient use of other power resources by helping
store energy produced by the most efficient units and delivering it at a time that is
most beneficial to the grid. This allows other power generators to run at cleaner and
more efficient output levels, allows certain standby units to be turned off or reduced,

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Ecocentric Blog
Interview with Brian Perusse of AES Energy Storage

and will enable the most efficient generators to increase their share of the total power
produced. In addition, AES storage facilities produce no air emissions, do not use
water for operation, and dont involve heavy land disturbance, which delivers
significant environmental benefits versus the alternatives.

14. Any other points youd like to mention that we didnt get to cover in this
discussion?
Kyle, I think we covered nearly everything. We are excited about what is in front of
us today and think we are just beginning to see the potential of energy storage on the
power grid and how it helps enable the grid of the future. Thank you.