Energiewende braucht keine Speicher? Restricted Siemens AG All rights reserved

Many Studies analyse the need for storage with increasing share of renewable generation VDE-Speicherstudie 2012 Energiespeicher für die Energiewende - kurzfristig noch nicht von so hoher Bedeutung Speicherzubau erst ab EE-Anteilen ab 40% erforderlich. Zeitfenster bis 2025 nutzen zu Forschung und Entwicklung. Agora: Stromspeicher in der Energiewende 2014?? Page 2 February 2015 Siemens AG Restricted Siemens AG 2014. All rights reserved

Energy storage is one of 4 major flexibility options to cope with increased volatile renewable build out e.g. Flexibilise Demand with Smart tariffs Demand Side Management / Automation Digitalization Energy storage e.g. Grid stability and system efficiency; time shift of excess electricity Cross-regional electricity transfer and integration of distributed generation Grid extension Flexible and efficient power generation e.g. cost-efficient use of conventional energy and backup capacity Page 3

The result of a study is only true in combination with the assumptions made! Most critical assumptions Modelling time intervall in most studies 1h storage demand below one hour can not be identified 1 Assumptions about grid situation (e.g. copperplate) and transfer capacities 2 Technical and economic potential of Demand Side Management options incl. to Heat and to Gas 3 Assumptions about flexibility of conventional generation (Ramp rates and Minimum load) and their role for preserving system stability 4 Storage Demand from System Analysis does not reflect economically driven storage applications 5 There is no simple and general answer to question whether there is a need for storage Page 4 February 2015 Siemens AG Restricted Siemens AG 2014. All rights reserved

1 Storage is about balancing production and consumption on different time scales Applications System Stability Capacity Firming Time shift 1 2 3 4 Energy Reserve Frequency Frequency Solar / Wind Smoothed RE Generation Conventional Demand 50Hz time 0 min. 15 min. 30 min. 0:00 24:00 week Storage time Sec - min Intra-Hour Intra-Day Week+ Storage demand in time frame <1h not assessed Page 5

1 In order to achieve RE targets several hurdles need to be taken Contribution of Renewables to electricity consumption of Germany Fill the gaps in residual load Deal with Renewable Excess electricity II. III. TWh 800 Storage not an issue Increase Absorption capability of the grids I. 600 400 200 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 GW Peak load 81 18 52 94 18 101 159 18 118 123 19 87 118 53 19 77 101 27 17 51 61 6 12 2000 Page 6 Min load 2010 Non-renewables Other RE generation 35-40% 2020 PV generation Wind generation 2030 ~50% 2040 2050 80% Renewables GW (Wind+Solar) ~3 x Peak load

2 On a local level challenges for integration of renewables exist already today 2014 Wind power build out mainly in the North ~11% ~46% ~80% ~62% ~90% ~77% 2030?? Solar power build out mainly in the South ~23% ~7% ~12% ~20% ~29% ~37% ~21% Share of Renewable generation In regions * Ambitious renewable energy plans need additional flexibilities Even with planned grid extensions Germany will not become a copperplate Page 7 * Source: AGEE-Stat, LAK, extrapolated

5 Bottom up analysis of storage market - Storage used for very different purposes Application Segmentation (use-cases) 1 Electricity reserve D C B A Energy reserve Time shift Firming system stability Seconds Minutes Hours Days Weeks 4 Con-/ Prosumer 2 Residential/ commercial self supply Industrial peak shaving 3 Generation buffer Decentralized fleet 2a On-Grid + grid expansion deferral Remote areas/ off-grid Grid stability Distribution grid Ensure power system stability Electricity reserve Cover low wind or sun periods Volatile plants 2b Conventional 2c power plants Central fleet 2d (PV / Wind On) Avoid curtailment Integration and grid services 3a Increase flexibility/ load optimization Transmission grid Ensure power system stability + Energy arbitrage (Time Shift) Provide balancing energy 3b 1 kw 100 kw 1 MW 10 MW 100 MW 1000 MW Source: Siemens AG Page 10

5 Electricity Storage attractive today in use-cases with high power prices or grid quality issues Application D C B A Energy reserve Time shift Firming system stability Seconds Minutes Hours Days Weeks 4 Con-/ Prosumer 2 Residential / commercial self supply Industrial peak shaving Storage Attractivity* Tendency Potential 3 Generation buffer Decentra- 2a lized fleet On-Grid + grid expansion deferral Remote areas and Off-Grid Grid Distribution grid Ensure power system stability? 1 Electricity Reserve Electricity reserve Cover low wind or sun periods Volatile plants (PV / Wind On) Avoid Curtailment Integration and grid services 2b Conventional 2c Central fleet 2d power plants 3a Increase flexibility/ load optimization Energy Arbitrage (Time Shift) Provide balancing energy Transmission grid Ensure power system stability 1 kw 100 kw 1 MW 10 MW 100 MW 1000 MW? 3b Page 11

Cross-Overs to heat and gas as important flexibility measure for surplus electricity D C B A Application Energy reserve Time shift Firming system stability Seconds Minutes Hours Days Weeks Storage Attractivity* 4 Con-/ Prosumer 2 Industrial power to gas to heat Tendency Potential 3 Generation buffer Decentralized fleet to heat Mobility power to gas 2a Grid Distribution Grid 1 Electricity Reserve Electricity Reserve Volatile plants (PV / Wind) to gas 2b Conventional 2c Central fleet 2d power plants 3a to heat Transmission Grid to gas 1 kw 100 kw 1 MW 10 MW 100 MW 1000 MW 3b Page 12

5 Siemens storage activities cover wide range of application areas Maturity: D C B A Energy reserve Time shift Firming system stability Seconds Minutes Hours Days Weeks 4 2 High temperature Con-/ Prosumer SIESTORAGE Generation Battery buffer storage system thermal storage Modular Decentralized scalable 2a Volatile Conventional Central fleet between 32 kw / 16 kwh and 2 MW fleet and 500 kwh power plants power plants NaS, Lead Acid Pumped Hydro Li-Ion NaNiCl NaSO 4 PEM electrolyzer 1st generation 0.1 MW, 2nd 2 MW 3rd 90 MW 3 Grid stability Distribution grid 1 Microgrids, Hybrid and Off-Grid Solutions Li-Ion Battery System on medium voltage level PEM Hydrogen Electrolyzer Electricity reserve Hydrogen combustion in gas turbines Electrical energy storage system on high-voltage level 3a Transmission grid Commercial Early commercial Demonstration Concept phase Incl. core component Example: Development Integration only project small hydrogen turbine 3b SVC plus ES Typical application with >10 MW 1 kw 100 kw 1 MW 10 MW 100 MW 1000 MW Page 13 Source: Siemens AG

Concluding Remarks Storage is already today essential component to make project Energiewende successful Cross-Overs to other Sectors (e.g. heat, gas, mobility) involve ways to store electricity; think beyond electricity! Instead of macroeconomic analysis business cases will determine the storage market, (emotional factor should not to be underestimated) Regulation has largest impact on storage business cases It s not a question whether Energiewende needs Energy Storage but rather How to make use of the installed storage assets to the benefit of the Energiewende Page 14