Ice Storage Permanently Reduces Peak Demand

2. Ice Storage Permanently Reduces Peak Demand Building A/C is the big demand problem 80 Million installed, 7+ Million units shipped last year ~10% of building annual kW-hours, 45% of building peak demand Source: PG&E Program Advisory Group for Energy Efficiency: HVAC PAG White Paper, Proctor Engineering

3. Market Transformation with Ice Storage Air Conditioning “Ice Energy Summer Day” Load Profile Slashing A/C demand by 35%, every day Residential A/C Commercial A/C Storing Wind Power Commercial Lighting Base load 6 a.m. 12 noon 6 p.m.

4. Ice Storage Creates a Market for Off-Peak Wind Power Typical Summer Day Wind Power Generation noon midnight. • On-Shore wind rarely blows on hot summer days • 95% is off-peak • Air conditioning load shift is a direct off-set for fossil fueled peakers • Shifts daytime fossil fuel and its emissions to nighttime wind System Demand Source: 2006 California Energy Commission report

5. Building Peak Demand and Intermittent Solar PV kilowatt hours per day

6. Ice Storage Can Cover the Demand Shortfall of Solar PV A/C Storage

7. Source & Site Energy Savings Ice Storage Heals the Planet Peak vs. Off-peak CO2 Emission Rate* (Tons/MWh) Source for Carbon Credits Reduced Greenhouse Gas Emissions Heavy AC Use Reduced Smog Potential on 2% days *Southern California Edison Data • 56% lower NOx emission rate during off-peak • 40% lower CO2 greenhouse gas emissions

8. Widespread Applicability: All Buildings Under 3 Stories • Office • Retail • Restaurant • Residential

9. Ice Energy’s Zero Loss Storage Breakthrough Ice Energy Storage Module • Cooling capacity is created during the night by freezing water • Off-the-shelf product, over the counter permit • Best electric condensing unit efficiency • Efficiency, not curtailment • Stored cooling energy is delivered during the peak of the day • Electric condenser “locked out” • Superior cooling comfort and dehumidification • The water never leaves the tank • 300 watts on-peak vs. 10,000 watts (300 EER on-peak) • 6 hour storage, 60 kW-hr • 20+ year life, unlimited deep cycles

10. A/C Energy Intensity Increases as Temperatures Rise Standard A/C Energy Demand Soars

11. A/C Energy Efficiency Increases as Temperatures Drop Average difference between daily high & low is ~22° F Store Distributed Energy Efficiently at Night

12. Temperature Change and CO2 Concentration We are experiencing a warming trend

13. Actual Performance During the July 2006 Heat Storm Monday Sunday Saturday Friday Tuesday Thursday Wednesday Peak Shift Peak Shift Peak Shift Peak Shift Peak Shift Peak Shift Peak Shift July 2006 Peak Shift

14. Air Conditioning Energy Demand Sets Market Prices Highest Cost Energy Real Time Energy Cost Conventional AC Energy Consumption

15. Storage Transforms the Market = True Ratepayer Relief Lowest Cost Energy Real Time Energy Cost Ice Energy AC Energy Consumption

16. Demand Response versus Permanent Load Reduction Demand Response A/C Cycling Significant On-Peak Cost January June December TDV = time dependent value of energy; for additional information search: TDV cookbook

17. Storage A/C Eliminates the On-Peak Energy Problem Insignificant On-Peak Cost January June December

18. #1 Smart Grid Appliance for Energy Arbitrage Energy efficient storage breaks the dependency between comfort and high cost energy Peak hour AC comfort at low cost Emergency & high price signal uses stored energy Low price signal stores energy

19. New Peaking Capacity is Very Expensive Anaheim Public Utilities Thermal Energy Storage Program (TES) Application

20. 45 MW1 Energy Distributed Energy Storage Plant versus 50 MW Peaker (Muni) Assumptions: 15 years, 7.5 kW peak demand reduction/unit, 6,000 units, 2,000 buildings Anaheim Public Utilities Thermal Energy Storage Program (TES) Application Anaheim Public Utilities Thermal Energy Storage Program (TES)

21. Strong Alignment with Public Policy Goals • Permanently reduce peak demand 1% per year for 10 Years • Savings on energy & capacity • Savings on T&D line losses and expenditures • Savings on greenhouse gas emissions • Improve grid reliability; relieve thermal stress on distribution circuit substations, wires, and building transformers • Insulation against the impact of 1 in 10 heat driven events • Create a market for off-peak renewable wind energy • Improve the value of intermittent Solar PV • Applicable to majority of utility customer base • Local economic development

22. Asks • Decouple Utility Profits from KW-hr sales • Put utilities in the energy efficiency and demand reduction business • Mandate the use of cost effective Demand Side Resources • Integrated Resource Plan includes Energy Efficiency and Demand Reduction • Allow preferential rates of return for distributed energy storage • Distribution asset equivalent or better rate of return (rate base storage) • Valued on an equal footing with new peaking capacity, energy, and emissions • Reduce the emphasis on silo “programs” • Increase building end use efficiency and reduce peak demand • Adopt 8760 hourly energy usage models (search TDV Cookbook) • Develop tariffs and customer incentives that support the use of storage • 4-hour on-peak demand periods, higher off-peak energy differential • Contact your U.S. Representatives and Senators • Support accelerated depreciation and investment tax credit status for energy storage assisted air conditioning (e-mail gtropsa@ice-energy.com)

23. Thank-You Gregory Tropsa, President 970-222-2987 gtropsa@ice-energy.com www.ice-energy.com