Employment Impact Assessment: Pennsylvania

1. Employment Impact Assessment: Pennsylvania confidential | March 2012

2. Eos: Energy Storage Solutions Provider * One full cycle includes full charge, discharge and additional frequency regulation over the course of one full day.

3. 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 1) IEA, 2010. 2) NERC, 2010. 3) Quanta, 2010. 4) EPRI, 2010. 5) CAISO, 2007.

4. 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 Electricity is the world’s only supply chain with NO storage

5. 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

6. Global Market: $500B • $400B1 • $600B2 • 40-55%3 • $64B/year 4 BCG: Piper Jaffray: Worldwide, the energy storage market is forecasted to grow over the next five years at a CAGR of: Lux Research: 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

7. High Capital Cost Limitation 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 Present Value of Energy Storage Application EPRI, Electricity Energy Storage Technology Options, 2010.

8. Eos Low Capital Cost Opens Markets Market opens up for solutions with Eos’ capital cost of $160/kWh US Market Sizes of Different Energy Storage Applications based on the Estimated Present Value of their Benefits Present Value of Energy Storage Application EPRI, Electricity Energy Storage Technology Options, 2010.

9. Eos Aurora Meets Key Requirements * One full cycle includes full charge, discharge and additional frequency regulation over the course of one full day.

10. 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

11. Eos Superior to Gas Peaking Plants Eos utility scale energy storage systems can be cheaper than gas peaking plants when compared at realistic operating conditions * 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 10.5MMBtu/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.

12. Current World Electric Energy Storage Capacity Today’s electricity energy storage is almost exclusively pumped hydro Compressed Air Energy Storage440 MW Sodium-Sulfur Battery316 MW Pumped Hydro Lead-Acid Battery~35 MW Nickel-Cadmium Battery27 MW 127,000 MWel Flywheels<25 MW Over 99% of total storage capacity Lithium-Ion Battery~20 MW Redox-Flow Battery<3 MW Fraunhofer Institute. EPRI, Electricity Energy Storage Technology Options, 2010.

13. Eos Energy Storage vs. Competitors  = Good  = Medium  = Poor Advanced Lead Acid CAES-Above Ground CAES-Below Ground Vanadium Redox Pumped Hydro Sodium Sulfur Zinc Bromine Lithium Ion Lead Acid

14. GST: Low Cost per Unit Energy and Power Eos: Low Cost per Unit Energy and Power Eos offers the lowest capital cost solution for energy storage for utility transmission and distribution support

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.

16. EV Demand: The Context • Demand drivers for hybrid, plug-in hybrid and electric vehicles: • Oil price volatility • Energy security • Climate change

17. EV Demand: The Context • Transportation accounts for 2/3 of US oil consumption The Math (Mbd) US oil consumption: 18.7 (of which vehicles: 10.7) Domestic production: 9 Widespread adoption of EVs could reduce or eliminate US oil import dependence US Transportation Databook, 2011

18. Global EV Battery Opportunity: > $33B/yr. Global vehicle focused energy storage market estimate: • 2016: $16B • 2020: $33B 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? Lazard Capital Markets, Shrestha, Sanjay, Martin, Sarah and Zhang, Jenny (Lazard Capital Markets), “Alternative Energy & Infrastructure”, March 5, 2010

19. 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

20. Eos’ Electric Vehicle Strategic Partnerships Eos Aurora zinc-air battery Potential EV Configurations: • >300 Mile driving range • Same cost as ICE vehicle • $0.02/mile fuel cost Eos Vista zinc-air flow battery • Refuelable in addition to rechargeable • Lower cost per kWh "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 * http://www.bcg.com/documents/file36615.pdf, pg. 5.

21. Other Eos Technologies Under Development

22. EVs: Battery Cost vs ICEs Eos Goal: 100-200 $/kWh Morgan Stanley, 2011

23. Gasoline Car vs Li-ion EV vs Eos EV *http://www.nissanusa.com/ev/media/pdf/specs/FeaturesAndSpecs.pdf

24. Innovation: First Ever Rechargeable Long-Life Zinc-Air Battery • Started with a safe, robust, well developed technology: • Widely used today for hearing aids, medical equipment • Electrolyte (ZnCl2): safe, widely used in toothpaste (Triclosan) • Innovated to resolve historic challenges that prevented rechargeability • Designed product for ease of scale manufacturing at competitive cost Eos energy storage: “low-cost, rugged, long-life, non-toxic and compact design for stationary and mobile applications.” - KEMA Energy Consultants

25. What is a Zinc-Air Battery? • 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 Zinc or Metal Air provides highest potential energy density for batteries Energizer, Zinc Air Prismatic Handbook

26. 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 Vs. 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

27. Expert Opinions of Eos “Metal air batteries… have the potential to be lower-power, long-duration energy storage devices…” - SCE, 2011* “Metal-air batteries contain high energy metals and literally breathe oxygenfrom the air, giving themthe ability to store extreme amounts of energy.” - US Energy Secretary, Steven Chu “(Eos’) novel non-flow design offers elegant approach to management of prior zinc-air issues.”- Electric Power Research Institute “ Eos has developed a numberof improvements for the conventional zinc-air batteryto become a viable secondary battery.” - KEMA Energy Consultants • SCE, Rittershausen J and McKonah, • Moving Energy Storage from Concept to Reality, 2011.

28. 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

29. 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 confidential

30. 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 a variety of overlapping revenue streams

31. Q1 Manufacture Prototype Business Timeline R&D Pilot tests Scale Manuf. Marketing and Sales JV Deployment JV Pre-Dev. JV Site Prep • Manufacturing commencing in Q1 2013 • Scale manufacturing in 2013 / 2014 • Joint venture (JV) for project development launching in Q4 2011 confidential

32. 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 confidential

33. 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 confidential

34. 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.

35. www.eosenergystorage.com inquiries@eosenergystorage.com