ICOD Deployment Financial Benefits

1. EHT I NTERNATIONAL ICOD Deployment Financial Benefits

2. EHT Financial Analysis I NTERNATIONAL Hypothetical Utility Savings • Operational data such as failure rates may vary from one utility to another. This analysis uses data published by industry organizations such as CIGRE and obtained from discussions with utilities and experienced consultants. It aims to demonstrate the benefits of using ICOD in a realistic way. • Disconnect switches are strategic to an electric grid due to their direct influence on grid reliability. For our business case, assume that the utility has 32,000 disconnects installed and are distributed as follows:

3. EHT Financial Analysis I NTERNATIONAL Hypothetical Utility Savings • Out of the 32 000 disconnects, assume 31.25% are motorized

4. EHT I NTERNATIONAL Evaluation Table: Losses due to Failures

5. EHT I NTERNATIONAL • Evaluation Table: Losses due to Failures (continued)

6. EHT I NTERNATIONAL • Financial Justifications – Failure and Energy Loss Reduction • The ICOD’s predictive and real time monitoring will reduce failure rates by identifying incipient faults N.B. The disconnect failure rate may vary between utilities.

7. EHT I NTERNATIONAL • Financial Justification • Reduced Maintenance • 20% of the annual substation maintenance costs is allocated to disconnects. • Using ICODs, the motorised disconnect maintenance becomes as follows: • 1-    ICOD supervision of operation, predictive and real time monitoring (70%) • 2-    Thermography (20%) • 3-    Visual inspection (10%)

8. EHT I NTERNATIONAL • Financial Justifications • Reduction of the motorised DS mechanical failure rate Assuming 32 DS failures per year

9. EHT I NTERNATIONAL • Financial Justifications • Advantageous Replacement Costs • In addition to the substantial benefits of predictive and real time monitoring, the cost of an ICOD control is less than or comparable to the refurbishing of a conventional control. • Refurbishing versus ICOD purchase comparison

10. EHT I NTERNATIONAL Financial Justifications Reduction of detection and intervention time • ICOD System: • Allows early detection of the developing failures and reduces repairs • Allows better scheduling and minimizes outages and transmission losses • Gains estimated due to a better scheduling: Greater than 100 000$/ yr • Gains estimated due to early detection: Greater than 60 000$ / yr

11. EHT I NTERNATIONAL Financial Justifications Advantagesdue to reduction of harmonics by 50% • For a 735kV grid (rates from CIGRE) • Failure rate of power transformers : • Without ICOD = 0.003 / yr • With ICOD = 0.0027 / yr • Failure rate of current transformers : • Without ICOD = 0.005 / yr • With ICOD = 0.00425 / yr • Economies for the utilities for a 30 years period (for 800 disconnectors) : • Power transformers : $27M • Current transformers : $13M • Net gain : ~1.3M$/year

12. EHT I NTERNATIONAL Financial Justification Minimum Annual Gain with a Conservative 1% Failure Rate

13. EHT I NTERNATIONAL Financial Justification Assumption ofICOD deployment

14. EHT I NTERNATIONAL Financial Justifications ICOD System Investment • Conservative failure rate of 1% • Investment: • 2800 DSL units for 8 100 $ • 4800 DSC units for 14 000 $ • 2400 DSV units for 15 500 $ Total Investment 127080 000$ Total Annual Gain 22 820 000$ Payback : 5.6 years

15. EHT I NTERNATIONAL Thank You Energy HT International Inc. Quebec Canada www.energieht.com