Faraday Grid: Revolutionizing Grid Stability for Energy Transformation

1. USAEE Capital Area Chapter Annual Conference, April 24, 2019 GRID STABILITY = GRID SECURITY

2. INTRODUCTION TO FARADAY Faraday Grid Ltd is a high growth, IP led company with a business model and technology to replace the system’s century old technology. The company’s hardware technology, the Faraday Exchanger and its grid architecture Faraday Grid are a quantum leap in the application of physics and economics to the energy system. The Faraday Grid and Emergent Transactional Platform enable the large scale systemic transformation of the global economy’s nervous system. Faraday inverts the system’s logic, by targeting a dynamically balanced system able to sustain optimal power flow at all times we can reduce energy costs to consumers, increase system reliability and dramatically increase renewables generation. Faraday is taking a scalable business model to ubiquity at a time in history where globally, the function and performance of energy management is in complete overhaul. We are doing that with the largest utilities in the world.

3. COMPANY BACKGROUND Faraday Grid is a spin off from systems engineering company Exigen, to specifically commercialise the patented Faraday Grid and Faraday Exchanger. Faraday Grid Limited was registered in the UK in 2016 as the entity to commercialise the IP. The technical experience and expertise of the FGL team is demonstrated by a history of related projects in control systems design and optimisation in the energy industry. Specialised systems integrator in manufacturing & mining. Spun off from Exigento focus on delivering a new energy platform. Rebranded as Exigen Pty Ltd, - systems design and optimisation services. 1986 2013 2016

4. DEFINING THE FUTURE GRIDA SYSTEMIC APPROACH If we designed the electricity grid today, what would it need to be? CURRENT GRID LIMITATIONS FARADAY GRID SOLUTION Centralised, hub & spoke infrastructure • A new grid ontology – decentralised, energy from anywhere to anyone Highly fragile network incapable of processing volatility • Faraday Grid re-balances the network, solving for volatility, making the grid more resilient • Faraday Exchanger delivers bi-directional power flow Designed for passive consumers at the end of one way power flow • A transactional network that embraces an ecosystem of technologies and prosumers, creating an anti-fragile grid Inability to cope with distributed, variable energy sources An energy system based on volume • A transactional network based on value

5. BUSINESS MODEL: ‘ENERGY AS A SERVICE’ RATIONALE 2004: 80 generation points serving the UK Today: more than 1,000,000 points Energy generation only represents a small fraction of total energy costs. As much as 90% of end user energy costs are due to costly grid stabilisation and transportation services that are required to deliver reliable electricity to consumers. These Balancing Services mitigate the instability introduced by both the inherent intermittency of wind and solar generation, as well as the unpredictable and ”lumpy loads” of electric vehicles. The Faraday Grid can provide almost all those balancing services. The value of the Balancing Services market in the UK last year was GBP 2.23B and is expected to grow to 13GBP in the next 10 years. Instead of the traditional business model of selling products, the disaggregated nature of the balancing services market is ideal for the evolution of an alternative business model: that of delivering Balancing Services as a Service. Balancing services market Global examples: Total cost of energy 53% 81% 69% Up to 90%

6. TECHNOLOGY OVERVIEW: FARADAY GRIDGRID PLATFORM ARCHITECTURE

7. TECHNOLOGY OVERVIEW: FARADAY EXCHANGERUNDERPINNING DEVICE – THE ROUTER FOR AN ENERGY “INTERNET” COMPONENTS Electromagnetic core Primary and secondary windings Control winding which modulates the magnetic flux flowing through the device and the energy stored in that magnetic flux An on-board control system continuously monitors the input and output of the Exchanger to command the control winding FEATURES 4 • Drop-in replacement for transformers • Makes redundant other technologies, including inverters, converters, rectifiers, capacitor banks, harmonic filters, voltage boosters, tap changers, STATCOMs, and STATVARs 3 2 2 1 • Ubiquitous technology – applicable from transmission size down to consumer goods • Scalable – economically viable at scale Concept illustration only • Network effects with large efficiency gains • Can be deployed incrementally • Autonomous = much more resilient grid CAPABILITY • Control RMS voltage within ±25% • Maintain frequency • Maintain a power factor of = 1 • Remove all harmonics (to the 99th) • Maintain phase balance • Uses existing poles +wire infrastructure • Does not require additional layers of expensive technology

8. TECHNOLOGY OVERVIEW: FARADAY GRIDPOTENTIAL GRID NODES CONSUMER – INDUSTRIAL & RESIDENTIAL; & EV • Power-factor correction • Uninterrupted power supplies • Enabling prosumer TRANSMISSION • Power Transformer • Distribution Transformer • STATCOM DISTRIBUTION • Distribution Transformer • Tap Changers • DER connections • Capacitor bank • Enabling EV connectivity RENEWABLES GENERATION • Turbine converter • Solar energy inverters • On-site substation • Off-site substation • Grid connection • STATCOM • STORAGE • Grid supply • inverter

9. BUSINESS MODEL: MARKET FIT Business models largely standardize across three market types for balancing and ancillary services: Disaggregated markets Market: Transparent price signals and discreet market for balancing, ancillary and other service providers Target Actors: DNOs, DSOs, DPOs, TSOs where there are various levels of regulatory reform e.g. United Kingdom Vertically integrated markets Market: Utilities with internal price control for balancing, ancillary and other services Target Actors: Vertically integrated utilities e.g. Japan Renewables based generators Market: Enable Variable Renewable Energy developments to become power stations providing balancing services and reduce connection costs Target Actors: Wind and solar sites with positive FID or enhanced economics/avoided costs enabled by Faraday Exchangers

10. ENERGY AS A SERVICE: BALANCING MARKETS Transmission System Operators *Faraday Grid can deliver the following services: Distribution Network Operators *Faraday Grid can deliver the following services: UK value model uses TNUoS savings as a proxy for DUoS savings, table shows areas of potential savings *Based on 100% Faraday Grid deployment

11. BUSINESS MODEL • A Faraday Grid can deliver: • Up to 6% of its load as synthetic inertia • Up to 4.5% of its load as short term power, to provide frequency support, short term reserves • Up to 30% of its load as reactive power • This means, at 40% of load: • Up to 4GW of synthetic inertia response, enabling very high levels of renewables • The equivalent of 25GW of traditional plant • Up to 2.5GW of frequency support from the grid itself

12. faradaygrid.com