Session #: FAC in Demand Response Programs 11.1

Title: Data Center Benefits of Participation

Michael A. Cozzi, Managing Principal & Co-Founder Bridgevue Energy Services, LLC

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Data Center World – Certified Vendor Neutral

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Facilities Management

Innovative, field-proven techniques and insights on the data-to-day operations of the data center facilities.

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ERCOT Resource Adequacy Forecast The minimum acceptable reserve margin in ERCOT is 13.75%, which ERCOT forecasts will be broached 2019 RM% 15.7% 17.1% 18.1% 16.5% 13.6% 12.4% 11.4% 10.0% 8.6%

Source: Electric Reliability Council of Texas CDR Dec 2014. RM% (reserve margin) defined as available capacity over and above the capacity needed to meet normal peak demand levels.

7.3%

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ERCOT Generator Fuel Types 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% Summer 2015 Generating Capacity: 77,165 MW Reserve Margin: 15.7% 0,0% Ряд1 Biomass 0,3% Coal 24,9% Natural Gas 63,4% Nuclear 6,5%

Source: Electric Reliability Council of Texas Dec 2014 CDR Report.

Other 0,7% Hydro 0,6% Wind 2,0% Wind-C 1,4% Solar 0,2% Storage 0,0%

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ERCOT SARA & EPA CSAPR

ERCOT’s latest Seasonal Assessment of Resource Adequacy (SARA) is forecasting sufficient installed generating capacity to serve forecasted peak demands with expected generation outages in the upcoming spring season (March – May, 2015). However, this does not include the latest impact of the EPA Cross-State Air Pollution Rule (CSAPR).

• • • • • • EPA Cross-State Air Pollution Rule (CSAPR): October 23, 2014, U.S. Court of Appeals lifted the stay on the EPA CSAPR rule.

CSAPR rule went into effect January 2015.

Generators in ERCOT have not reported any anticipated changes to available generation capacity attributable to CSAPR.

Generators waiting to finalize their compliance plans until they receive rule implementation details from the EPA.

ERCOT expects that additional coal units (1,200 MW’s) could be placed into seasonal mothball status when CSAPR is implemented, reducing the capacity available to serve load.

Does not include 2,000 MW’s in coal plant retirements from EPA’s Regional Haze rule

Source: Electric Reliability Council of Texas (ERCOT) October 2014 SARA Report, and ERCOT Impacts of Environmental Regulations in the ERCOT Region, December 16, 2014.

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What is Demand Response?

‘Changes in electric use by demand-side resources from their normal consumption patterns in response to changes in the price of electricity, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.’ (NERC)

Data Center reduces load by 1.6 MW during demand response event by transferring from utility power to emergency power

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Demand Response Programs in Texas

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ERCOT Energy Emergency Alerts Demand Response is final line of defense before rolling black-outs Reserves falling and frequency at or below 59.8

of Hz.

Rolling outages at discretion transmission utilities.

Reserves are Generation Resources less Demand from Load Resources less Demand Response (when called upon)

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MP2 CyrusOne Aggregation ERS-30 Test 2/11/2015 VDI 13:50 Data Centers dropped 14 MW’s of load in less than 30 min to meet ERCOT DR event Curt Start 14:20 VDI Stop 14:46 4 Data Centers Curtailed 14.3 MW’s ERCOT Performance Factor: 98% > 95% (Pass) Time (Hr:Min)

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Historical Frequency of Demand Response Events in ERCOT

Notes: 1. Ice storms February 2/3 2011 caused grid wide rolling black-outs throughout ERCOT.

2. Record high temps July/Aug 2011 caused grid wide rolling outages throughout ERCOT.

3. Ice storms January 2014 caused regional rolling black-outs in ERCOT.

4. Demand response resources prevented rolling black-outs from being longer and more severe in all cases.

5. Both ERS-10 and ERS-30 were deployed Jan 2014. 6. No events thus far in 2015.

7. Last updated 2/18/2015. 11

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Financial Value of Demand Response

Two (2) data centers aggregated together for load commitment.

Each data center load is 2.5 MW for total aggregated 5 MW’s Both data centers turn on back-up generators in less than 30-minutes to meet response time Participation in all three (3) demand response programs and 100% performance without breaking rules Successful enrollment in auction and all bids are accepted Demand response consultant conducts competitive selection process to select curtailment service providers to gain best value for client.

Note – No CAPEX required.

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Benefits to Data Centers Participating in Demand Response Programs Non-Financial Benefits

• Advance warnings of rolling blackouts • Live test of UPS, ATS, and emergency generators • Reduce grid load during peak demand • Turn over of stored diesel fuel • LEED certification points • Societal

Financial Benefits

• Significant revenue from grid operator • Revenue from multiple programs • No CAPEX required • Reduce commodity electric costs • Reduce regulated transmission costs 13

3 Key Things You Have Learned During this Session

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Demand Response provides advanced warnings of instability on the electric grid enabling proactive controlled transition Demand Response provides significant income potential without incurring any capital expenditures Demand Response requires data centers to go through a “live” load curtailment test of emergency generators and ATS once per year. These tests compliment data centers preventative maintenance program, and potentially uncover unwanted issues, which left unattended, could otherwise damage mission critical readiness.

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Thank you

Michael A. Cozzi Managing Principal & Co-Founder Bridgevue Energy Services, LLC 5068 W. Plano Parkway, Ste 300 Plano, TX 75093 [email protected]

972-232-2203 www.bridgevue.com

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