PREPA Renewable Energy Resources Integration Study San Juan February 19 th 2014



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PREPA Renewable Energy Resources Integration Study San Juan February 19 th 2014 Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

Agenda Introduction System Studies Load Flow Short Term Stability Long Term Stability PROMOD Assessment Procedure and models to process the meteorological data. Models testing and assessment PROMOD set up. Scenario Definition Scenario I; Base Case Scenario II: Case with storage. Scenario III: Case with Combined Cycle Intra-Hour Modeling Conclusions Page 2

Introduction In this presentation we will cover the main results of the study carried out by Siemens PTI to determine the secure and economic levels that renewable generation can be incorporated in PREPA s system. The studies are organized in three main components: Load flow and short term dynamics Long Term Dynamics PROMOD / Production Costing evaluations. These sections correspond to the studies carried out to determine the impacts of renewable generation and determine solutions as presented next. Page 3

Issues to be considered when evaluating renewable Generation The table below describes the main issues associated with large penetration and the section of the study that addressed them Issues with typical Renewable Gen Impact Actions Timeframe Lack of Inertia Angular instability - Inertial Response/ storage 0 to 5 sec No governor and dispatched at max Large ramps / Contingencies Large frequency excursions Large frequency excursions - Governor like response - Increased reserves - Storage (as reserve) - Ramp Limitations - AGC adjustments - Reserve & storage 5 to 30 sec (tens of sec) Tens of sec to several minutes Primarily Evaluated in Short Term Dynamics Short Term Dynamics Long term dynamics Page 4 Large ramps / Contingencies Variability Uncertainty Reduced reserves / curtailment Increased Operating Costs Increased Operating Costs - Increase reg reserve. minutes - Increase reg reserve. - Cost assessment - Frequent ED minutes to hours - Improved forecasts Hours Un-dispatchability Curtailment - Limit the penetration long term PROMOD IV Intra-hour PROMOD IV Load following PROMOD IV Forecast Uncertainty PROMOD IV Optimal Penetration

PREPA Renewable Energy Resources Integration Study System Studies Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

System Studies Initial Project Selection To start the system studies we need a feasible dispatch The dispatch was selected maximizing the renewable generation without consideration to economics, only the capability of the generating fleet at specific moments in time. This selection made sure that the system studies would be carried out with worst possible conditions Dispatch and Economic Studies (PROMOD) were expected to confirm or reduce these values. A model was created working with PREPA that accounted for these dispatch limitations and it was determined that that up to 895 MW of PV and Wind Turbine generation could be integrated. We show next an screen shot to the model for the critical light load day. Page 6

Initial Project Selection Light Load Day The critical time is noon time when renewable is expected to be maximum The light load has a load that has 90% probability of being exceeded at noon time. Checks on limits and reserves were carried out. Generation Characteristics Min Day Regulating Range Operating Range On Daytime Machine Machine Machine Nighttime Machine Machine Name Type Min Max Min Max Line Peak Primary R Regulating Reserve Peak Regulating Reserve MW MW MW MW I / O 12:00 PM PMax Margin Margin 12:00 PM Margin Margin Palo Seco 4 * Steam 170 200 130 216 1 130.0 Not Reg Under 86.0 200.0 0.0 16.0 Costa Sur 5 Steam 280 380 280.0 410 1 280.0 320.0 100.0 130.0 380.0 0.0 30.0 Aguirre 1 Steam 230 430 230.0 450 1 230.0 275.0 200.0 220.0 270.0 160.0 180.0 AgCCV 1 CCP 20 60 20.0 60 1 20.0 Not Reg Not Reg No Reserve 60 0.0 0.0 AgCCGT 1-1 CCP 26 50 25.9 50 1 50.0 Not Reg 0.0 0.0 50.0 0.0 0.0 AgCCGT 1-2 CCP 26 50 25.9 50 0 Off Off Off 50.0 0.0 0.0 AgCCGT 1-3 CCP 26 50 25.9 50 0 Off Off Off 50.0 0.0 0.0 AgCCGT 2-1 CCP 26 50 25.9 50 0 0.0 Off Off Off 50.0 0.0 0.0 AgCCGT 2-2 CCP 26 50 25.9 50 0 Off Off Off 50.0 0.0 0.0 AgCCGT 2-3 CCP 26 50 25.9 50 0 Off Off Off 50.0 0.0 0.0 SJ Rep Steam 1 CCP 57.6818 57.7 56.0 57.7 1 56.0 Not Reg Not Reg 1.7 57.7 0.0 0.0 SJ Rep Gas 1 CCP 142.3 142.3 99.0 142.3 1 99.0 Not Reg Not Reg 43.3 142.3 0.0 0.0 AES1 Coal 227 227 166 227 1 166.0 Not Reg Not Reg 61.0 227.0 Not Reg 0.0 AES2 Coal 227 227 166 227 1 166.0 Not Reg Not Reg 61.0 227.0 Not Reg 0.0 ECOSTEA Cogen 98.5 164.7 98.5 181.5 1 102.7 N/A 62.0 78.8 152.9 11.8 28.6 ECOGT1 Cogen 88.3 147.6 88.3 162.7 1 92.1 108.3 55.6 70.7 137.1 10.6 25.7 ECOGT2 Cogen 88.3 147.6 88.3 162.7 1 92.1 108.3 55.6 70.7 137.1 10.6 25.7 PaloSecoGT11 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 PaloSecoGT12 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 PaloSecoGT21 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 PaloSecoGT22 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 PaloSecoGT31 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 PaloSecoGT32 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 VegaBajaGT11 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 VegaBajaGT12 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 AguirreGT21 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 AguirreGT22 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 JobosGT11 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 JobosGT12 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 DaguaoGT11 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 DaguaoGT12 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 YabucoaGT11 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 YabucoaGT12 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 SOUCOGT11 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 SOUCOGT12 GT 21 21.0 21 0 Off Off 20.7 0.3 0.3 MAY AERO #1 GT 50 25.0 50 0 Off Off 50.0 0.0 0.0 Page 7 TOTAL Conventional 1483.8 473.2 823.2 2713.0 199.0 312.0 Total Renewable WTE 0.0 0.0 Total Renewable PV & Wind Turbine 884.2 0.0 Total Generation 2368.0 473.2 823.2 2713.0 199.0 312.0 Dispatch Summary 0.0 Load MW 2368.0 2713.0 Balance Check OK OK Regulating Reserve 563.2 296.0 Regulating Reserve OK OK OK Regulating Reserve in Aguirre 1 & 2 + Costa Sur 5&6 (40 MW min) 300.0 160.0 Regulating reserve OK in Ag & CS? OK OK Online Spining Reserve 863.2 312.0 Spinning Reserve OK OK OK GT's Online (does not include Cambalache if dispatched) 0.0 422.0 % GT's 0% 73% GT's Offline + Reserve (fast start) w/o Cambalache 578.0 156.0

Initial Project Selection Based on this and by inspection of PREPA s PPOA contracts we selected the projects indicated for a total of 884.2 MW. This selection was done to have a representative sample to study that could be accommodated in the dispatch, but no inference to a particular contract should be made. Page 8 NUM Project Name Type Capacity 31 Pattern Wind 75 32 Go Green PR (Punta Lima) Wind 26 1 AES Ilumina Solar 20 59 Wind-59 Wind 34.5 61 Wind-61 Wind 18.4 2 Wind-2 Wind 10 18 Solar-18 Solar 10 4 Solar-4 Solar 57 30 Solar-30 Solar 50 46 Solar-46 Solar 20 7 Solar-7 Solar 40 3 Solar-3 Solar 20 36 Solar-36 Solar 20 21 Solar-21 Solar 33.5 62 Solar-62 Solar 10 47 Solar-47 Solar 25 42 Solar-42 Solar 20 43 Solar-43 Solar 20 15 Solar-15 Solar 20 63 Solar-63 Solar 20 17 Solar-17 Solar 30 16 Solar-16 Solar 17.8 54 Solar-54 Solar 30 39 Solar-39 Solar 20 40 Solar-40 Solar 20 56 Solar-56 Solar 20 57 Solar-57 Solar 20 27 Solar-27 Solar 52 23 Solar-23 Solar 20 53 Solar-53 Solar 30 44 Solar-44 Solar 20 8 Solar-8 Solar 10 9 Solar-9 Solar 15 10 Solar-10 Solar 30 TOTAL: 884.2

Load Flow Evaluation Verification of Interconnection Capability The 884 MW of renewable projects were added to PREPA s Load Flow models. The system was tested for N-1 contingency conditions No thermal or severe voltage violations associated with this integration were found resulting in an acceptable case. The importance of Renewable Projects to control voltages was observed (MTR compliance) Few high voltages were identified, but these were minor (at 38 kv) and do not compromise the assessment of stability. Note that 1.10 pu is usually accepted for contingency conditions. Page 9 Bus # Bus Name KV ContVolt BaseVolt Contingency Description Pre-Proj ContVolt Delta V Deviation (>0.5%) 49 MONACILLO 38 38.0 1.0502 1.0428 49 MONACILLO 3838.0 666 CORRECCION 38.0 1 #N/A #N/A 0.74% 59 MARTIN PE A 38.0 1.0504 1.0439 59 MARTIN PE A 38.0 530 DEPTOFAMILIA38.0 1 #N/A #N/A 0.65% 113 ACACIAS 38 38.0 1.0540 1.0475 113 ACACIAS 38 38.0 249 CABO ROJO NO38.0 1 #N/A #N/A 0.65% 123 BERWIND 38 38.0 1.0562 1.0446 123 BERWIND 38 38.0 137 LOS ANGELES 38.0 1 #N/A #N/A 1.16% 215 BARRANQUITAS 38.0 1.0504 1.0442 215 BARRANQUITAS38.0 350 OROCOVIS 38.0 1 #N/A #N/A 0.62% 249 CABO ROJO NO 38.0 1.0540 1.0386 249 CABO ROJO NO38.0 519 CABOROJOPRO 38.0 1 #N/A #N/A 1.54% 276 COMERIO 38 38.0 1.0525 1.0425 221 CIDRA SECC. 38.0 276 COMERIO 38 38.0 1 #N/A #N/A 1.00% 300 S.GERMANTC38 38.0 1.0511 1.0453 300 S.GERMANTC3838.0 584 LOCTITE 38.0 1 #N/A #N/A 0.58% 361 COMERIO NO 38.0 1.0505 1.0413 221 CIDRA SECC. 38.0 276 COMERIO 38 38.0 1 #N/A #N/A 0.92% 456 PONCE CEMENT 38.0 1.0600 1.0468 456 PONCE CEMENT38.0 620 CEMEX PONCE 38.0 1 #N/A #N/A 1.32% 505 XTRA MAYAG 38.0 1.0500 1.0450 113 ACACIAS 38 38.0 249 CABO ROJO NO38.0 1 #N/A #N/A 0.50% 582 BAXT AIBONIT 38.0 1.0505 1.0340 582 BAXT AIBONIT38.0 695 TO RICO 38.0 1 #N/A #N/A 1.65% 584 LOCTITE 38.0 1.0507 1.0452 216 SABANAGRANDE38.0 584 LOCTITE 38.0 1 #N/A #N/A 0.55% 666 CORRECCION 38.0 1.0501 1.0376 501 CIEN MEDICAS38.0 666 CORRECCION 38.0 1 #N/A #N/A 1.25% 1051 TREN 1461 38.0 1.0504 1.0439 59 MARTIN PE A 38.0 530 DEPTOFAMILIA38.0 1 #N/A #N/A 0.65% 1155 MARTINPE AB2 38.0 1.0501 1.0430 1042 RECNATURALES38.0 1155 MARTINPE AB238.0 1 #N/A #N/A 0.71% 1169 AAA 8174 38.0 1.0504 1.0270 1128 TAP S.JOS 38.0 1169 AAA 8174 38.0 1 #N/A #N/A 2.34%

Short Term Stability Evaluation Verification of System Response A detailed dynamic stability model adding the dynamic models for the renewable generation and including storage to PREPA s model. The storage model was developed by us as well as new models for representing PREPA s load shedding schemes. Various contingencies including tripping of lines and generation were assessed. 3ph Faults at Generation Facilities, Normal Clearing - Unit Trip No Type Description kv FLT-01 3ph, normal clearing At Ecoelectrica 319, units at 858,859,869 are tripped 230 FLT-02 3ph, normal clearing At Aguirre 106, unit at 809 tripped 230 FLT-03 3ph, normal clearing At Costa Sur 96, unit at 805 tripped 230 FLT-04 3ph, normal clearing At AES 321, unit at 871 tripped 230 FLT-05 3ph, normal clearing At San Juan 88, units at 811 and 856 are tripped 115 FLT-06 3ph, normal clearing At Palo Seco 63, unit at 819 tripped 115 Page 10

Short Term Stability Evaluation Verification of System Response Also line trips and load rejection events were studied... 3ph Faults at Generation Facilities, Normal Clearing - Line Trip No Type Description kv FLT-20 3ph, normal clearing At Aguirre 106, trip line to Agubuenas 451 230 FLT-21 3ph, normal clearing At Aguirre 107, trip line to Jobos 8 115 FLT-22 3ph, normal clearing At Costa Sur 96, trip line to Manati 196 230 FLT-23 3ph, normal clearing At Costa Sur 2, trip line to Canas 103 115 FLT-24 3ph, normal clearing At AES 321, trip line to Yabucoa 233 230 FLT-25 3ph, normal clearing At San Juan 88, trip line to Viaducto 86 115 FLT-26 3ph, normal clearing At Palo Seco 63, trip line to Monacillo 50 115 SLG Faults at Generation Facilities, Delayed Clearing - Line Trip No Type Description kv FLT-27 SLG, delayed clearing At Aguirre 106, trip line to Agubuenas 451 230 FLT-28 SLG, delayed clearing At Aguirre 107, trip line to Jobos 8 115 FLT-29 SLG, delayed clearing At Costa Sur 96, trip line to Manati 196 230 FLT-30 SLG, delayed clearing At Costa Sur 2, trip line to Canas 103 115 FLT-31 SLG, delayed clearing At AES 321, trip line to Yabucoa 233 230 FLT-32 SLG, delayed clearing At San Juan 88, trip line to Viaducto 86 115 FLT-33 SLG, delayed clearing At Palo Seco 63, trip line to Monacillo 50 115 3ph Fault at 230 kv S/S (Non-Generating), Normal Clearing - Line Trip No Type Description kv FLT-07 3ph, normal clearing At Bayamon 99, trip 3wnd TF to Bayamon 45 230/115 FLT-08 3ph, normal clearing At S.llana 120, trip line to Agubuenas 451 230 FLT-09 3ph, normal clearing At Manati 196, trip line to Costa Sur 96 230 FLT-10 3ph, normal clearing At Mayaguz 204, trip line to Maya TC 232 230 FLT-11 3ph, normal clearing At Maya TC 232, trip line to Costa Sur 96 230 FLT-12 3ph, normal clearing At Yabucoa 233, trip line to AES 321 230 FLT-13 3ph, normal clearing At Mora 352, trip 3wnd TF to Moca 100 230/115 FLT-14 3ph, normal clearing At Ponce TC 363, trip line to Pon Bypass 1077 230 FLT-15 3ph, normal clearing At Camb GP 440, trip line to Dbocas 1110 230 FLT-16 3ph, normal clearing At Agubuenas 451, trip line to Aguirre 106 230 FLT-17 3ph, normal clearing At Cacao 956, trip line to Yabucoa 233 230 FLT-18 3ph, normal clearing At Pon Bypass 1077, trip line to Costa Sur 96 230 FLT-19 3ph, normal clearing At Dbocas Fase 1110, trip line to Costa Sur 96 230 3ph Fault at Indicated Bus followed by opening of lines / buses No Type Description FLT-34 3ph fault at bus 38 Load Rejection 36100-83, 177, 400, 555 FLT-35 3ph fault at bus 92 Load Rejection 7800-237, 245, 248, 593, 594, 595, 599, 746, 747, 748, 990, 991, 1049, 1065, 1174 FLT-36 3ph fault at bus 98 Load Rejection 3700-80, 220, 265, 285, 422, 435, 437, 438, 585, 617, 621, 641, 660, 783, 961, 965, 967, 1010, 1034, 1147 Page 11

Short Term Stability Evaluation Verification of System Response All events analyzed resulted in stable behavior, but in some cases load shedding was required to obtain stability. In particular it was identified that it was important for the renewable to comply with the MTR and provide voltage support and frequency regulation. As a reference the figure below shows the trip of Ecoelectrica with compliance of the MTR (storage) to the left and without (no storage) to the right. 60.2 60.1 60 59.9 59.8 59.7 59.6 59.5 59.4 59.3 59.2 59.1 59 58.9 58.8 58.7 58.6 58.5 58.4 58.3 58.2 0 5 10 Fault 01 - Frequency at bus 50 MTR Compliance 15 20 25 30 Time (seconds) 35 60,2 60,1 60 59,9 59,8 59,7 59,6 59,5 59,4 59,3 59,2 59,1 59 58,9 58,8 58,7 58,6 58,5 58,4 58,3 58,2 58,1 40 0 5 Fault 01: frequency at bus 50 No MTR Lower frequency for longer 10 15 20 25 Time (seconds) 30 gfedcb 60*(1+A) : FLT01-3PH-peak_load gfedcb 60*(1+A) : FLT01-3PH-light_load gfedcb 60*(1+A) : FLT01-3PH-peak_load-no-storage gfedcb 60*(1+A) : FLT01-3PH-light_load-no-storage Page 12

Short Term Stability Evaluation Verification of System Response The tables below provide further details on the most critical contingencies evaluated that were associated with the trip of generation. Note the greater need for load shed if storage is not considered. Disturbance Peak Load Peak Load Renewable without BESS ID-Loss of Generation Generation Tripped [MW] Post-contingency Available Primary Reserve [MW] Lowest Frequency [Hz] Load Shedding [MW] Lowest Frequency [Hz] Load Shedding [MW] 01-Ecoelectrica 507 266 58.39 365.0 58.20 416.5 02-Aguirre 1 308 221 58.59 124.2 58.49 237.9 03-Costa Sur 5 280 226 58.60 126.5 58.51 230.8 04-AES 1 153 266 59.52 0 59.17 0 05-S J Repwr 129 266 59.63 0 59.47 0 06-Palo Seco 3 121 246 59.65 0 59.52 0 Disturbance Light Load Light Load Renewable without BESS ID-Loss of Generation Generation Tripped [MW] Post-contingency Available Primary Reserve [MW] Lowest Frequency [Hz] Load Shedding [MW] Lowest Frequency [Hz] Load Shedding [MW] 01-Ecoelectrica 287 181 58.49 174.5 58.39 261.6 02-Aguirre 1 230 169 58.56 98.6 58.43 222.3 03-Costa Sur 5 280 174 58.50 174.2 58.39 261.3 04-AES 1 166 213 59.20 0 58.58 92.5 05-S J Repwr 153 213 59.51 0 58.73 80.2 Page 13 06-Palo Seco 3 130 194 59.50 0 58.60 59.1

Long Term Dynamic Evaluation Verification of System Response The evaluation of long term dynamics (LTD) assesses how PREPA s conventional generation will respond in the multi-minute range to sudden events as the trip generation and generation changes in the renewable. A key component evaluated is the Automatic Generation Control (AGC) that should bring the frequency back to the nominal 60 Hz. In addition to the generation trips just presented the renewable generation changes include; Steep power change; changes of -3%/minute and 15 minutes duration on all PV s in the island (loss of 324 MW of PV power). Long duration power changes: changes of -2%/minute of 30 minutes duration affecting all PV s in the island (loss of 432 MW of PV power) Localized changes up to 50% / min without ramp control and 10%/min with ramp control. Page 14

60*(1+A) : FLT02-AGC-3PH-peak_load 21 - ACE : FLT02-AGC-3PH-peak_load Long Term Dynamic Evaluation Verification of System Response The analysis identified that with the initial dispatch considered there would be insufficient secondary reserve to recover the frequency to 60 Hz under certain contingencies. Disturbance Status after fault 60,5 FLT 02: trip Aguirre 01 f [Hz] & ACE [pu] 200 ID-Loss of Generation tripped [MW] Peak load Light load 01-Ecoelectrica 507 OK OK 02-Aguirre 1 308 Insufficient reserve* OK 60,25 60 59,75 59,5 100 0-100 -200 03-Costa Sur 5 280 OK OK 04-AES 1 153 OK OK 59,25-300 05-S J Rep 129 OK OK 59-400 06-Palo Seco 3 121 OK OK 58,75-500 58,5 0 100 200 300 400 500 600-600 700 800 900 1.000 1.100 1.200 1.300 1.400 1.500 1.600 1.700 1.800 Time (seconds) gfedcb 60*(1+A) : FLT02-AGC-3PH-peak_load gfedcb 21 - ACE : FLT02-AGC-3PH-peak_load Page 15

60*(1+A) : RAMP-PV-02-peak_load 21 - ACE : RAMP-PV-02-peak_load 60*(1+A) : RAMP-PV-03-peak_load 21 - ACE : RAMP-PV-01-peak_load Long Term Dynamic Evaluation The analysis identified that with the initial dispatch considered there would be insufficient secondary reserve to recover the frequency to 60 Hz under certain RAMP 01: -3%/min x 15 min to all PV gen. f [Hz] & ACE [pu] contingencies (Cont). 60,075 60,05 60,025 10 0-10 Disturbance Status after fault 60-20 ID Generation loss [MW] Peak load Light load 59,975 59,95-30 -40 Ramp 01: -45% of all PV gen. 324 OK OK Ramp 02: -60% of all PV gen. 432 Insufficient reserve* OK 59,925 59,9 59,875-50 -60-70 Ramp 03: -75% of north cluster PV gen. 213 OK OK Ramp 04: -90% of north cluster PV gen. 255 OK OK Ramp 05: -100% of all Wind gen. 164 OK OK Ramp 06: -100% of Site 21 PV gen. 87 OK OK 59,85 59,825 0 60,1-80 -90 100 200 300 400 500 600 700 800 900 1.000 1.100 1.200 1.300 1.400 1.500 1.600 1.700 1.800 Time (seconds) Ramp 02: -2%/min x 30 min to all PV gen. f [Hz] & ACE [pu] gfedcb 60*(1+A) : RAMP-PV-01-peak_load gfedcb 21 - ACE : RAMP-PV-01-peak_load 75 50 Ramp 07: -100% of Site 21 PV gen. 87 OK OK Ramp 08: -100% of Wind gen at Pattern 76 OK OK 60,05 60 59,95 59,9 59,85 59,8 25 0-25 -50-75 59,75-100 59,7-125 59,65-150 59,6 0 250 500 750 1.000 1.250 Time (seconds) 1.500 1.750-175 2.000 Page 16 gfedcb 60*(1+A) : RAMP-PV-02-peak_load gfedcb 21 - ACE : RAMP-PV-02-peak_load

Long Term Dynamic Evaluation Adjustment From simulations, it was determined that if the amount of secondary reserve is equal or greater than 50% of the total renewable generation dispatch the response should be adequate. To meet these requirements, the peak load case was modified by a reduction of the generation at Ecoelectrica of 100 MW and increasing the generation at AES and Palo Seco 3 & 4 that were not regulating. This solved the situation as shown below for the previous events 60,5 FLT 02: trip Aguirre 01 unit - comparisson original and new dispatched case Ramp 02: - 432 MW PV variation - comparisson original and new dispatch case 60,05 60,25 60 60 59,75 59,5 59,95 59,25 59 59,9 58,75 58,5 0 100 200 300 400 500 600 700 800 900 Time (seconds) 1.000 1.100 1.200 1.300 1.400 1.500 1.600 59,85 0 100 200 300 400 500 600 700 800 900 1.000 1.100 1.200 1.300 1.400 1.500 1.600 1.700 1.800 1.900 2.000 Time (seconds) Page 17 gfedcb 60*(1+A) : FLT02-AGC-3PH-peak_load gfedcb 60*(1+A) : FLT02-AGC-3PH-peak_load-redispatched gfedcb 60*(1+A) : RAMP-PV-02-peak_load gfedcb 60*(1+A) : RAMP-PV-02-peak_load-redispatched

60*(1+A) : RAMP-PV-07-peak_load 21 - ACE : RAMP-PV-06-light_load 21 - ACE : RAMP-PV-07-peak_load Long Term Dynamic Evaluation Localized Events Renewable simulation and field observations indicate that sharp changes in renewable generation are possible. We evaluated a 50%/min (43 MW/min) change and found that the frequency could dip under 59.9 Hz and require 400 seconds to recover. Considering that this could happen several times during the day and could be compounded with other conditions in the system, from a planning perspective we are of the opinion that would be unacceptable. With 10%/min the frequency dips close to 59.98 HZ, which is quite acceptable. 60,35 60,3 60,25 60,2 RAMP 06: -50%/min x 2 min at Site 21 PV gen. f [Hz] & ACE [pu] 225 200 175 150 125 60,03 60,025 60,02 60,015 60,01 Ramp 07: -10%/min x 10 min at Site 21 PV gen. f [Hz] & ACE [pu] 25 20 15 10 60,15 100 60,005 5 60,1 60,05 60 59,95 59,9 75 50 25 0-25 -50-75 60 59,995 59,99 59,985 59,98 59,975 0-5 -10-15 -20 59,85 0-100 100 200 300 400 500 600 700 800 900 1.000 1.100 1.200 1.300 1.400 1.500 1.600 Time (seconds) Page 18 gfedcb 60*(1+A) : RAMP-PV-06-light_load gfedcb 21 - ACE : RAMP-PV-06-light_load 59,97 0 200 gfedcb -25 400 600 800 1.000 1.200 1.400 1.600 1.800 2.000 2.200 2.400 Time (seconds) 60*(1+A) : RAMP-PV-07-peak_load gfedcb 21 - ACE : RAMP-PV-07-peak_load

System Assessment Conclusions The study confirms that with 884 MW of renewable generation PREPA s grid should be able to ride through the set of severe contingencies and generation changes. No voltage collapse occurred. Primary and secondary reserve can be secured It is recommended that PREPA keeps resources available with secondary reserve of least 50% of the renewable generation dispatched. The importance of 100% compliance with the MTR s was observed; voltage, frequency and ramp controls. Given the significant contribution that the renewable generation can provide from BESS; It is recommended that PREPA revises its MTR to require that renewable generation projects do not inhibit the contribution from the BESS even when dispatched at contractual maximum. Page 19

PREPA Renewable Energy Resources Integration Study PROMOD EVALUATION Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

Introduction This part of the presentation will enter into the details and results of the Production costing evaluations using PROMOD. PROMOD is widely used program by the industry for the formulation of a Security Constraint Unit Commitment and Security Constrained Economic Dispatch The PROMOD simulations achieve the objective of evaluating the performance of the generation fleet in the presence of the renewable generation. Page 21

Topics Procedure and models to process the meteorological data to create the Renewable models used for PROMOD. Models testing and assessment Set up the PROMOD evaluations considering the renewable. Scenario Definition Scenario I; Base Case Scenario II: Case with storage. Scenario III: Case with Combined Cycle Intra-Hour Modeling Page 22

PREPA Renewable Energy Resources Integration Study Procedure and models to process the meteorological data to create the Renewable models used for PROMOD Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

Renewable Generation Models AWS Truepower (AWS) Mesoscale Models Renewable Models Start From Meteorological Data AWS developed a Mesoscale Numerical Prediction Model for Puerto Rico. The model provides simulated wind and solar data for Puerto Rico and captures in a realistic fashion both the temporal and spatial variability of the wind and solar resource The model was developed taking into consideration the conditions during 2011, corrected for the effect of Hurricane Irene. The model provides all data required for accurate representation of the renewable resource Parameters for 23 sites were produced. Page 24

Evaluated Renewable Projects Solar (PV) Projects 720 MW Solar PV projects were modeled. The project capacity and corresponding AWS site is a key element in the modeling. NUM Name Location Capacity MW AWS SITE 1 AES Ilumina, LLC Guayama 20 13 3 Photovoltaic #1 Barceloneta 20 4 4 Photovoltaic #2 Salinas 57 14 7 Photovoltaic #3 Humacao 40 11 8 Photovoltaic #4 Lajas 10 18 9 Photovoltaic #5 Naguabo 30 10 10 Photovoltaic #6 San Lorenzo 15 21 15 Photovoltaic #7 Hatillo 20 3 16 Photovoltaic #8 Guayama 17.8 13 17 Photovoltaic #9 Hatillo 30 3 18 Photovoltaic #10 Salinas 10 14 21 Photovoltaic #11 Morovis 33.5 5 23 Photovoltaic #12 Juncos 20 21 27 Photovoltaic #13 Juncos 52 21 30 Photovoltaic #14 Aguadilla 50 1 36 Photovoltaic #15 Vega Baja 20 6 39 Photovoltaic #16 Barceloneta 20 22 40 Photovoltaic #17 Fajardo 20 9 42 Photovoltaic #18 Añasco 20 1 43 Photovoltaic #19 Quebradillas 20 2 44 Photovoltaic #20 Añasco 20 20 46 Photovoltaic #21 Loíza 20 2 47 Photovoltaic #22 San German 25 19 53 Photovoltaic #23 Vega Baja 30 6 54 Photovoltaic #24 Yabucoa 30 12 56 Photovoltaic #25 Dorado-Toa Baja 20 7 57 Photovoltaic #26 Yauco-Guayanilla 20 17 62 Photovoltaic #27 Ponce 10 16 63 Photovoltaic #28 Yabucoa 20 12 Total 720.3 Page 25

Evaluated Renewable Projects Wind (WTG) Projects WTG Projects added to 164 MW installed. As before the project s capacity and corresponding AWS site is a key element in the modeling. NUM Name Location Capacity MW AWS SITE 2 Wind Generation # 1 Santa Isabel 10 15 31 Pattern Santa Isabel, LLC Santa Isabel 75 15 32 Punta Lima (Go Green PR) Naguabo 26 10 59 Wind Generation # 2 Guayanilla 34.5 17 61 Wind Generation # 3 Guayanilla 18.4 17 Total 163.9 These projects with the 720 MW PV add to the 884 MW considered during the stability evaluations Page 26

Renewable Generation Models Grouping of Projects 8 -Mayaguez Regional effects are important to be evaluated so the projects were grouped in increasing level: AWS Site / Project All projects move in unison. Area Some diversity between the Network Areas. Cluster Further diversity within Areas in Cluster Island Level Maximum diversity between Clusters. 7 Arecibo Bayamon 2 Bayamon 1 San Juan West Page 27 North South 6 Ponce OE 5 Ponce ES East 3 Carolina 4 Caguas Site Area Name Cluster PV WTG Total 1 7 ARECIBO North 70 0 70 2 7 ARECIBO North 40 0 40 3 7 ARECIBO North 50 0 50 4 7 ARECIBO North 20 0 20 5 2 BAYAMON North 33.5 0 33.5 6 2 BAYAMON North 50 0 50 7 2 BAYAMON North 20 0 20 8 3 CAROLINA East 0 0 0 9 3 CAROLINA East 20 0 20 10 3 CAROLINA East 30 26 56 11 4 CAGUAS East 40 0 40 12 4 CAGUAS East 50 0 50 13 5 PONCE ES South 37.8 0 37.8 14 5 PONCE ES South 67 0 67 15 5 PONCE ES South 0 85 85 16 6 PONCE OE South 10 0 10 17 6 PONCE OE South 20 52.9 72.9 18 8 MAYAGUEZ West 10 0 10 19 8 MAYAGUEZ West 25 0 25 20 8 MAYAGUEZ West 20 0 20 21 4 CAGUAS East 87 0 87 22 3 CAROLINA East 20 0 20 23 3 CAROLINA East 0 0 0 Total 720.3 163.9 884.2

Power per MW installed PV Model Development Solar Models The program PVSyst was used to estimate production at each AWS Site based on the Global Horizontal Irradiance (GHI) and the Diffuse Horizontal Irradiance (DHI) as provided by AWS in 10 minutes intervals 1.2 1.0 0.8 0.6 0.4 New Design Original 0.2 0.0 0 200 400 600 800 1000 1200 Global Effective Incidence W/m2 Page 28

Wind Turbine Model Development WTG were created based on the results of the climate data and a Siemens SWT-2.3-101 wind turbine generator Power Curve model. This turbine was selected as representative of the wind turbines available in the market for medium to low speed sites. Note it s better performance at low speeds than the SWT 3.0 The power curve correlates the wind speed at the hub with power output was used to determine a curve fitting equation. pu 1.10 1.00 0.90 0.80 0.70 Wind Turbine Power Output SWT-2.3-101 vs SWT-3.0-101 The wind speed at the hub is affected by Shading: impact of one turbine on another or external obstacles The speed was forecasted at the right height. 0.60 0.50 0.40 0.30 0.20 0.10 0.00 Wind Speed m/sec 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SWT-2.3-101 Power (pu) SWT-3.0-101 Power (pu) Page 29

Wind Turbine Model Development Model Development Shading Factors were selected considering that the impact of shading being about 5% of the energy output due to other turbines and that bodies outside the fence can reduce the energy output further by another 5% or more. This was verified for PREPA considering the actual reported production for existing projects. A model (analogous to PVSyst) was created to determine power starting from the AWS forecasted wind speed by site,. Page 30

Model Development Post Processing A post processing model was developed for Produce 10 minute output based on PVSyst hourly production and irradiance data from AWS. WTG production was already in 10 minutes Verification maximum output and capacity factors. Aggregation of results by Area, Cluster and Island, to evaluate impacts at this level. of capacity Site Number Area Area 6 Cluster PONCE OE 163.9 Site Adjustment Factor: 127.9 Max Ramp %/min 163.9 Contracted Capacity (CA) 127.9 7.72% Max MW output at site per MW gross 1.000 Time Max MW output per MW gross - Selected 1.000 4/10/11 3:20 PM Base Power 0.651 Maximum value Days reached 38% 38% 127.9 Capacity Factor 33.76% 33.76% Time Base Power 0 D 2/25/11 6:20 AM Check Active Total PONCE OE Longest 30 min Ramp Increase MW & %/min 92 2.4% Duration mn & %/min 30.00 Time 5/13/11 1:30 AM Power per MW Power output gross MW %CA/min - 10min Index MW/min 10Site Number 0.11472 14.67225 Total Island wide 0.0 10Area AWS Site Data 0.08692 11.11726-1.0 10Cluster 0.07500 9.59212-0.12% -2.0 10 0.08014 10.25019 0.05% 1.0 Site Adjustment Factor: 163.9 Max Ramp %/min Longest 30 min+ Ramp 10 0.07910 10.11662-0.01% -1.0 10Contracted Capacity (CA) 0.07879 10.07761 163.9 0.00% 7.32% -2.0 Increase MW & %/min 10Max MW output at site per MW gross 0.08192 5.000 10.47814 0.03% Time 1.0-134 10Max MW output per MW gross - Selected 0.08995 5.000 11.50404 7/30/11 0.08% 7:40 AM2.0-4.1% 10 0.09901 12.66346 0.09% 3.0 Base Power 2.956 Maximum value Duration mn & %/min 10 0.11695 14.95799 0.18% 4.0 10Days reached 0.13161 8% 16.83258 8% 0.15% 163.9 5.0 20.00 10Capacity Factor 0.14501 30.82% 18.54626 32.82% 0.13% Time 6.0 Time 0 D 1/26/11 10:00 AM 7/14/11 4:20 PM Active Total Island wide Page 31 Power per MW gross Power output MW %CA/min - 10min Index MW/min 0.69783 20.78692 0.0 0.60977 17.32698-1.0 0.56928 15.67296-0.10% -2.0-0.3 0.59642 16.33597 0.04% 1.0 0.58756 15.99721-0.02% -1.0 0.58593 15.90317-0.01% -2.0 0.0 0.60420 16.37434 0.03% 1.0

PV Model Development 60 Minutes Models PROMOD requires hourly values so two models were created to produce these inputs to the program. Code 2 Hour SITE 32 SITE 02 SITE 31 SITE 59 SITE 61 hours @ max ouput 58.00 510.00 1255.00 320.00 320.00 Capacity Factor 28.22% 32.18% 37.90% 27.46% 27.46% Installed 26.00 10.00 101.20 34.50 18.40 PPA 26.00 10.00 75.00 34.50 18.40 AVG 7.34 3.22 28.42 9.47 5.05 Max 26.00 10.00 75.00 34.50 18.40 Min 0.00 0.00 0.00 0.00 0.00 Hour SITE 32 SITE 02 SITE 31 SITE 59 SITE 61 1 1 13.46299 0.72010 7.15626 8.85071 4.72028 1 2 12.32678 2.03197 20.30510 8.90797 4.75082 1 3 11.03991 2.15741 21.55002 8.54782 4.55874 1 4 10.83265 0.88978 8.86063 6.71628 3.58195 1 5 12.45405 0.53655 5.31019 6.83489 3.64520 1 6 14.67854 0.38597 3.80250 6.61139 3.52601 2 7 15.31947 0.82901 8.25055 5.70898 3.04473 2 8 19.07289 1.97471 19.73242 4.06867 2.16991 Page 32

PREPA Renewable Energy Resources Integration Study Models testing and assessment Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

Model Testing and Assessment PV Results Cluster or Island-wide Cluster Installed PV Maximum value Capacity Factor Max Ramp MW Max Ramp %/min Long Ramp MW Long Ramp %/Min Time for max ramp Time for long ramp North 284 284 21% 123.04 4.34% -127-2.2% 5/1/11 12:00 PM 6/16/11 10:50 AM East 247 247.0 20% 104.07 4.21% -127-2.6% 5/15/11 11:00 AM 5/1/11 12:20 PM South 134.8 134.8 21% 64.18 4.76% -78-2.9% 8/13/11 1:20 PM 7/7/11 12:50 PM West 55 55.0 20% 35.05 6.37% -33-3.0% 6/30/11 12:20 PM 9/19/11 1:50 PM Island Wide 720.3 720.3 21% 190.2 2.64% -257-1.8% 5/1/11 12:00 PM 5/1/11 12:20 PM All projects can be operating close to their maximum output simultaneously. 5% of the time the combined PV output is over 650 MW (90% of installed capacity) and 20% of the time we would have production over 600 MW at noontime The aggregated capacity factor for each of the clusters is as expected in the order of 21%. Page 34

. Model Testing and Assessment PV Cluster or Island-wide The maximum aggregated generation changes are in the range of 4.34% to 6.37% at the cluster and 2.64% at the Island-Wide level The figure shows the maximum change over 10 minutes; 123 MW at the cluster level and 190 MW Island-Wide on May 1st at noon. The long steep changes of 257 MW Island-Wide over 20 minutes were observed (1.8% / minute ). Page 35

Model Testing and Assessment PV at the Area Level Area Area Name Installed PV Capacity Factor Maximum value Max Ramp MW The max changes (6.01% average) and the long changes (2.96% average) are higher than the corresponding results for the Clusters and Island-Wide values. This is expected earlier because as we reduced the size of the area under consideration, local effects have greater impact. Max Ramp %/min Long Ramp MW Long Ramp %/Min Time for max ramp Time for long ramp 1 S.JUAN 0 2 BAYAMON 103.5 20.7% 103.5 70.70 6.83% 72 3.5% 5/1/11 1:00 PM 5/1/11 1:00 PM 3 CAROLINA 70 20.1% 70.0 34.67 4.95% 37 2.7% 7/4/11 11:50 AM 9/25/11 10:50 AM 4 CAGUAS 177 20.2% 177.0 106.20 6.00% 100 2.8% 5/15/11 11:00 AM 8/10/11 11:30 AM 5 PONCE ES 104.8 21.4% 104.8 60.26 5.75% 69 3.3% 9/6/11 10:40 AM 5/14/11 1:20 PM 6 PONCE OE 30 21.0% 30.0 19.00 6.33% 17 2.8% 3/21/11 12:20 PM 7/16/11 2:20 PM 7 ARECIBO 180 20.6% 180 104.49 5.80% 99 2.7% 5/1/11 12:00 PM 5/31/11 2:00 PM 8 MAYAGUEZ 55 19.8% 55.0 35.05 6.37% 32 2.9% 6/30/11 12:20 PM 7/27/11 12:00 PM Total or avg. 720.3 720.3 6.01% 2.96% Page 36

Model Testing and Assessment Sites Site 1 Site 2 Site 3 Site 4 Site 5 Site 6 Site 7 Site 8 Site 9 Site 10 Installed MW 70 40 50 20 33.5 50 20 0 20 30 Max MW 70 40 50 20 33.5 50 20 0 20 30 Capacity Factor 20% 21% 21% 21% 20% 21% 21% 0% 19% 20% Max Ramp% 8.2% 8.0% 8.3% 8.4% 8.3% 7.8% 8.3% 0.0% 8.3% 7.1% Max MW change 5.76 3.19 4.16 1.68 2.79 3.89 1.66 0.00 1.66 2.14 Site 11 Site 12 Site 13 Site 14 Site 16 Site 17 Site 18 Site 19 Site 20 Site 21 Site 22 TOTAL Installed MW 40 50 37.8 67 10 20 10 25 20 87 20 720.3 Max MW 40 50 37.8 67 10 20 10 25 20 87 20 720.3 Capacity Factor 20% 20% 21% 21% 21% 21% 21% 19% 20% 20% 21% Ramp% 8.2% 8.4% 7.0% 7.3% 8.2% 7.2% 7.7% 8.3% 8.2% 8.1% 8.0% 7.6% Max MW change 3.29 3.19 4.16 1.68 2.79 3.89 1.66 0.00 1.66 2.14 2.14 We observe that all sites have capacity factors in the expected range and of course all of them reach their maximum value. Sites have the greatest volatility with maximum aggregated production changes as high as 8.4%/min observed. Note that as the meteorological data was in 10 minutes interval changes of 10%/min or greater cannot be observed with this information. Page 37

7:00 AM 7:30 AM 8:00 AM 8:30 AM 9:00 AM 9:30 AM 10:00 AM 10:30 AM 11:00 AM 11:30 AM 12:00 PM 12:30 PM 1:00 PM 1:30 PM 2:00 PM 2:30 PM 3:00 PM 3:30 PM 4:00 PM 4:30 PM 5:00 PM 5:30 PM 6:00 PM 7:00 AM 7:30 AM 8:00 AM 8:30 AM 9:00 AM 9:30 AM 10:00 AM 10:30 AM 11:00 AM 11:30 AM 12:00 PM 12:30 PM 1:00 PM 1:30 PM 2:00 PM 2:30 PM 3:00 PM 3:30 PM 4:00 PM 4:30 PM 5:00 PM 5:30 PM 6:00 PM Model Testing and Assessment PV Cluster or Island-wide - Peaks Finally although the model produced contains the plots for all sites, here we will present two groups of sites for the typical day in July were we note the difference in volatility across sites. 60.0 50.0 MW MW 600.0 500.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 MW MW 600.0 500.0 400.0 300.0 200.0 100.0 0.0 Site 1 Site 2 Site 3 Site 4 Site 6 Site 7 Site 10 Site 11 Site 12 Site 19 Site 20 Site 21 Total 40.0 400.0 Site 5 Site 9 30.0 300.0 Site 13 Site 14 20.0 200.0 Site 16 Site 17 10.0 100.0 Site 18 Site 22 0.0 0.0 Total Page 38

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% Probablity that the value will be less Model Testing and Assessment PV Effect of time intervals on Ramps Timeframe has an important impact on observed ramps. Considering 5 minutes intervals we identified change was in the order of 10% to 13% and it can reach values as high as 16% using one weather station data At the site level; PREPA has observed changes as high as 75 %/minute; see below. Changes need time to propagate, but steep ramps can happen at the local level and can have potential impacts in the frequency and voltages, as shown earlier. 110.00% 100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 5 Minutes 15 minutes 30.00% 20.00% 10.00% 0.00% Ramp Rate %/minute Page 39

7:00 AM 7:40 AM 8:20 AM 9:00 AM 9:40 AM 10:20 AM 11:00 AM 11:40 AM 12:20 PM 1:00 PM 1:40 PM 2:20 PM 3:00 PM 3:40 PM 4:20 PM 5:00 PM 5:40 PM 6:20 PM 7:00 PM 7:40 PM 8:20 PM 9:00 PM 9:40 PM 10:20 PM 11:00 PM 11:40 PM 12:20 AM 1:00 AM 1:40 AM 2:20 AM 3:00 AM 3:40 AM 4:20 AM 5:00 AM 5:40 AM 6:20 AM Model Testing and Assessment WTC Cluster or Island-wide Cluster Installed WTG Maximum value Capacity Factor Max Ramp MW The peaks can be long duration; Max Ramp %/min Long Ramp MW Long Ramp %/Min Time for max ramp Time for long ramp North East 26 26.0 28.4% 26.00 10.00% -26-5.0% 4/30/11 12:20 AM 5/2/11 12:30 PM South 137.9 137.9 33.7% 121.64 8.82% 137 5.0% 7/30/11 7:40 AM 7/30/11 7:40 AM West Island Wide 163.9 163.9 33% 120.05 7.32% -134-4.1% 7/30/11 7:40 AM 7/14/11 4:20 PM The all projects reach their maximum output simultaneously and in multiple days. WTG reached its maximum output simultaneously 8% of the days. 180.0 170.0 160.0 150.0 140.0 130.0 120.0 110.0 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 MW South East Total Page 40

05:02 AM 05:45 AM 06:28 AM 07:12 AM 07:55 AM 08:38 AM 09:21 AM 10:04 AM 10:48 AM 11:31 AM 12:14 PM 12:57 PM 01:40 PM 02:24 PM 03:07 PM 03:50 PM 04:33 PM 05:16 PM 06:00 PM 06:43 PM 07:26 PM 08:09 PM Model Testing and Assessment Cluster or Island-wide When PV production is considered in addition to the WTG we find that on April the maximum renewable simultaneous production of 876-MW was reached. This represents 99% of the installed capacity It demonstrates that this event can and will happen. 950 900 850 800 750 700 650 600 550 500 450 400 350 300 250 200 150 100 50 0 MW WTG PV TOTAL Page 41

7:00 AM 7:40 AM 8:20 AM 9:00 AM 9:40 AM 10:20 AM 11:00 AM 11:40 AM 12:20 PM 1:00 PM 1:40 PM 2:20 PM 3:00 PM 3:40 PM 4:20 PM 5:00 PM 5:40 PM 6:20 PM 7:00 PM 7:40 PM 8:20 PM 9:00 PM 9:40 PM 10:20 PM 11:00 PM 11:40 PM 12:20 AM 1:00 AM 1:40 AM 2:20 AM 3:00 AM 3:40 AM 4:20 AM 5:00 AM 5:40 AM 6:20 AM 7:00 AM 7:40 AM 8:20 AM 9:00 AM 9:40 AM 10:20 AM 11:00 AM 11:40 AM 12:20 PM 1:00 PM 1:40 PM 2:20 PM 3:00 PM 3:40 PM 4:20 PM 5:00 PM 5:40 PM 6:20 PM 7:00 PM 7:40 PM 8:20 PM 9:00 PM 9:40 PM 10:20 PM 11:00 PM 11:40 PM 12:20 AM 1:00 AM 1:40 AM 2:20 AM 3:00 AM 3:40 AM 4:20 AM 5:00 AM 5:40 AM 6:20 AM Model Testing and Assessment WTG Cluster or Island-wide Given it concentrated location in the south, the WTG generation experiences larger aggregated changes. The maximum observed changes are 7.32%/min for PREPA and 8.8%/min for the South Cluster. At the project level we observed ramps of 10%/min, which is the maximum that could be observed for 10 min intervals. The maximum observed Long Changes in the case were - 4.1 % for a 134 MW reduction. This occurred on July 14 at 4:20 pm and is shown in the lower figure. At the local level meteorological data and PREPA s measurements indicate that14%/min ramps are possible and values higher than 19%/min are possible. 180.0 MW South 170.0 East 160.0 Total 150.0 140.0 130.0 120.0 110.0 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 180.0 MW South 170.0 East 160.0 Total 150.0 140.0 130.0 120.0 110.0 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Page 42

Renewable Modeling Conclusion and Observations Renewable generation does peak at the same time on certain days of the year. PV can present important aggregated changes at the island level 2.64%/minute over 10 minutes; total change 190 MW 1.8%/minute and a total change of 257 MW over 20 minutes. The North Cluster also shows important changes: 4.34%/min for 10 min as well as the long ramp of 2.2/min % for 20 minutes. PV can experience localized changes 37%/min and up to 65% per minute. For WTG 10%/min for 10 minutes can happen at the island level 20%/min in 5 minutes at the project level. Page 43

PREPA Renewable Energy Resources Integration Study PROMOD Setup Considering Renewable Resources Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

PROMOD Set Up Renewable Generation Renewable Generation was modeled as Must Run with hourly profiles. Page 45

PROMOD Set Up Conventional Generation PROMOD Generator Capability & Capacity Segments The operating limits, ramping rates, O&M costs, start up costs, capacity segments, maintenance and heat rate curves of the conventional generation was reviewed and updated as necessary. Also minimum down time and run time was reviewed (more on this later) Fuels Specific fuels were added to the database in the years when expected to be available Natural Gas Ecoelectrica (from first year 2015 in the model) Natural Gas Norte (from 2017 in the model) Natural Gas Costa Sur (from first year 2015 in the model) Natural Gas Aguirre (from 2017 in the model) The fuel prices are adjusted by month and year and are deemed conservative. Page 46

PROMOD Renewable Models Fuel Costs Forecast ($/MMBtu) FuelForecast Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Average Bunker- Aguirre 15.20 15.02 14.73 14.71 15.00 15.64 15.53 15.59 15.56 15.97 15.49 14.98 15.28 Bunker-PSSP 15.11 14.93 14.65 14.63 14.92 15.55 15.44 15.50 15.48 15.88 15.41 14.90 15.20 Bunker-SJSP 15.11 14.93 14.65 14.63 14.92 15.55 15.44 15.50 15.48 15.88 15.41 14.90 15.20 Bunker-Souco 15.54 15.36 15.07 15.05 15.35 15.99 15.88 15.94 15.92 16.33 15.85 15.32 15.63 COAL-AES 5.35 5.35 5.35 5.35 5.35 5.35 5.35 5.35 5.35 5.35 5.35 5.35 5.35 Light D.-AGUIRRE 24.86 24.46 24.05 23.31 23.28 23.62 24.40 25.44 26.21 25.51 24.83 24.36 24.53 Light D.-Camabalac 24.55 24.16 23.75 23.02 23.00 23.32 24.10 25.13 25.88 25.20 24.52 24.06 24.22 Light D.-PREPA 24.86 24.46 24.05 23.31 23.28 23.62 24.40 25.44 26.21 25.51 24.83 24.36 24.53 Light D.-SJUAN 25.41 25.01 24.59 23.83 23.81 24.15 24.95 26.01 26.79 26.08 25.39 24.91 25.08 Natural Gas - Aguirre 14.45 14.40 14.16 12.91 12.82 12.78 12.80 12.78 12.78 13.16 13.68 13.99 13.39 Natural Gas - Contract 12.77 12.77 12.77 12.53 12.53 12.53 12.38 12.38 12.38 12.60 12.60 12.60 12.57 Natural Gas EcoElectrica 5.89 5.89 5.89 5.89 5.89 5.89 5.89 5.89 5.89 5.89 5.89 5.89 5.89 Natural Gas Norte 16.80 16.75 16.51 15.26 15.17 15.13 15.15 15.13 15.13 15.51 16.03 16.34 15.74 FuelForecast Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Average Bunker- Aguirre 15.81 15.63 15.33 15.31 15.61 16.27 16.16 16.22 16.20 16.62 16.12 15.59 15.90 Bunker-PSSP 15.72 15.54 15.24 15.22 15.53 16.18 16.07 16.13 16.11 16.52 16.03 15.50 15.82 Bunker-SJSP 15.72 15.54 15.24 15.22 15.53 16.18 16.07 16.13 16.11 16.52 16.03 15.50 15.82 Bunker-Souco 16.17 15.98 15.68 15.66 15.97 16.64 16.53 16.59 16.57 16.99 16.49 15.94 16.27 COAL-AES 5.70 5.70 5.70 5.70 5.70 5.70 5.70 5.70 5.70 5.70 5.70 5.70 5.70 Light D.-AGUIRRE 26.50 26.08 25.64 24.85 24.83 25.18 26.02 27.13 27.94 27.20 26.48 25.98 26.15 Light D.-Camabalac 26.17 25.76 25.33 24.55 24.52 24.87 25.69 26.79 27.60 26.86 26.15 25.65 25.83 Light D.-PREPA 26.50 26.08 25.64 24.85 24.83 25.18 26.02 27.13 27.94 27.20 26.48 25.98 26.15 Light D.-SJUAN 27.10 26.66 26.22 25.41 25.38 25.74 26.60 27.74 28.57 27.81 27.07 26.56 26.74 Natural Gas - Aguirre 14.16 14.08 13.88 12.54 12.54 12.54 12.54 12.54 12.54 12.72 13.28 13.71 13.09 Natural Gas - Contract 12.99 12.99 12.99 12.88 12.88 12.88 12.85 12.85 12.85 13.08 13.08 13.08 12.95 Natural Gas EcoElectrica 6.76 6.76 6.76 6.76 6.76 6.76 6.76 6.76 6.76 6.76 6.76 6.76 6.76 Natural Gas Norte 16.51 16.43 16.23 14.89 14.89 14.89 14.89 14.89 14.89 15.07 15.63 16.06 15.44 Page 47

PROMOD Set Up Requirements FLOWGATES; PROMOD takes into consideration the transmission limitations an in particular the limits indicated below: 230 kv Line name Line Number Bus From Bus To Ckt# Thermal Limit MVA Loading Limit % of Thermal Costa Sur Manati 50200-2 COSTA SUR230_96 MANATI 230_19 1 462 65% 300 Aguirre Aguas Buenas 50900-1 AGUIRRE 230_106 AGUBUENAS230_451 1 924 45% 416 Aguirre Aguas Buenas 51000-1 AGUIRRE 230_106 AGUBUENAS230_451 2 924 45% 416 Costa Sur Mayagüez 50400 COSTA SUR230_96 MAYA TC 230_232 1 462 65% 300 Aguirre Costa Sur 50300 COSTA SUR230_96 AGUIRRE 230_96 1 462 30% 139 Actual Limit MVA RETIREMENTS: Given the working period (2015-2017) a number of units were noted as retired. These were initially set and then revised by PREPA later the in evaluation process. The following Units were modeled as retired for 2015. PSSP 1& 2 SJSP 7&8 SOUCO 1 to 4 Several GTs Page 48

PROMOD Renewable Models Thermal Modeling Impacts Heat Rates PREPA provided updates for almost all units Later adjustments were performed as some units did not perform as expected to reflect the onsite conditions. Fixed and Variable O&M Fixed O&M prices were adjusted for all units (per PREPA) Variable O&M prices were adjusted for all units (per PREPA) Maintenance Maintenance schedules were updated (per PREPA) Page 49

PREPA Renewable Energy Resources Integration Study Scenario Definition Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

Scenario I Expected Short Term Conditions Scenario I corresponds to the expected conditions in the system by 2015 and it is considered the Base Scenario. The scenario assumes the load as observed in PREPA during 2011 and it assumes that there is a recovery of the island industrial and economic activity. Natural Gas availability is considered to be limited to Costa Sur, hence in addition to Ecoelectrica, the generating units Costa Sur 5&6 are expected to be generating using natural gas (80% natural gas / 20% bunker). The scenario considers the renewable generation indicated previously (884.2 MW installed) and 64 MW of Net-metering. Page 51

Scenario II Evaluation of Storage This scenario corresponds to the expected conditions in the system by 2017 or 2018 and they are considered medium term sensitivities. The load is assumed to be the same as 2015 (Scenario I). Natural gas is expected to become available in Aguirre and in the north of the island, hence the following units are expected to be converted to natural gas: Name Short Name Unit Number Category Startup Fuel AGUIRRE COMBINED CYCLE 1 C.CYCLE 1 STEAM Natural Gas - Aguirre AGUIRRE COMBINED CYCLE 2 C.CYCLE 2 STEAM Natural Gas - Aguirre AGUIRRE STEAM 1 AGUIRRE 1 STEAM Natural Gas - Aguirre AGUIRRE STEAM 2 AGUIRRE 2 STEAM Natural Gas - Aguirre PSSP 3 PSSP 3 STEAM Natural Gas Norte PSSP 4 PSSP 4 STEAM Natural Gas Norte SAN JUAN COMBINED CYCLE 5 CC SJUAN 1 STEAM Natural Gas Norte SAN JUAN COMBINED CYCLE 6 CC SJUAN 2 STEAM Natural Gas Norte SJSP 10 SJSP 10 STEAM Natural Gas Norte SJSP 9 SJSP 9 STEAM Natural Gas Norte Page 52

Scenario II Evaluation of Storage 12% Penetration is required and more projects need to be added, largely solar. The following table shows the determination of the additional PV required (note Net-metering not considered only PPOA) Current Target Total PV + WTG 1,890,499.42 2,317,084.01 Less net-metering 126,920.82 126,920.82 PPOA 1,763,578.60 2,190,163.19 Penetration 9.66% 12.00% Additional Required 426,584.59 In order to produce the 427 GWh from PV, approximately 235 MW of PV generation with a profile similar to the average PV production in Puerto Rico. This generation was added in a strong bus in the north for which we selected Bayamon 230 kv Net-Metering is expected to increase to 100 MW in this scenario Page 53

Scenario III Modeling Scenario III is identical to Scenario II but in order to accommodate the additional generation and achieve 12% energy penetration new combined cycles were added to the system. A coincident peak 1158 MW of renewable generation occurs when PV as necessary for reaching the 12% penetration is added to the system Coincident Max Energy MWh MW PPOA 1,763,578.60 862 Net Metering 126,920.82 61 Total 1,890,499.42 923 Additional PV 426,584.59 235 Total with new PV 2,317,084.01 1,158 With this we found that a feasible dispatch during Low Demand Day can be obtained with two combined cycles that had a) peak capacity of at least 320 MW each (640 MW total), b) that could be turned on and off daily c) a minimum operating value 128 MW (40% of max). Page 54

Scenario III Modeling It is important to note that the only gives indication that PROMOD would be able to find an acceptable solution integrating this level of renewable. The next step was to select the combined cycle plant (CCP) the following were considered and the SGT800 5x1 adopted due its flexibility and efficiency Similar machines can be obtained from various vendors. Page 55

PREPA Renewable Energy Resources Integration Study PROMOD Analysis: Scenario I Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

PROMOD Analysis Overview The PROMOD analysis was conducted for the various scenarios to capture the impacts of the renewable resources on existing thermal generation. Several key aspects are derived from the analysis are: Energy curtailment (dump energy) Unit cycling Impact of renewable generation variability Impact of errors in the renewable generation forecast Overall generation costs. Before we enter into the details of Scenario I it is important to discuss some of these key aspects. Page 57

PROMOD Analysis Energy Curtailment & Emergency Power PROMOD utilizes the term Dump (Curtailment)& Emergency Power to allow for successful solutions. Dump reflects a condition where more power than load is dispatched due to restrictions in the case, Curtailment of generation is required; curtailing renewable generation and/or reducing power plants to their emergency lower limits. Emergency Power reflects the condition where not enough generation is dispatched, therefore more generation dispatch is required; or load shedding in practice. This occurs because of the inflexibilities or insufficiencies build into the models. It should be noted that typically when there is only conventional generation, the inequalities above are rare. Page 58

PROMOD Analysis Energy Curtailment & Emergency Power The PREPA model produced conditions where Energy Curtailment is needed to balance the generation to load. The PREPA model produced these conditions because of two factors: Renewable generation is modeled as Must Run according to the hourly profiles. Conventional generation can be dispatched but is set up to maintain required levels of reserve, running times and ramping. These conditions do occur in real time, however, operators resort to curtailing generation as needed to maintain the system balance, stability and security. Page 59

PROMOD Analysis Energy Curtailment & Emergency Power Curtailment of Renewable Generation in the Industry This is a common occurrence in the industry ERCOT, SPS, PSCo, NSP, MISO, BPA and PJM have all experienced renewable curtailment There is a clear trend to within the industry to reduce curtailment of renewable resources which we expect to stabilize in the order of 2% to 3%. Page 60

PROMOD Analysis Energy Curtailment & Emergency Power If PREPA curtails renewable energy it has to pay for it, based on the energy that would have been produced based on the meteorological conditions during the time of the curtailment and the curtailed project production characteristics. This result is an increase in the price of the energy that is actually taken A 2% curtailment implies an increase in price of 2.04% or about 3.5 $/MWh. PREPA s Operation is committed to minimize this value, but as will be seen for larger levels of penetration it cannot be made zero. Page 61

PROMOD Analysis Unit Cycling Renewable Resources has high injection levels during the day and zero or very low injection levels at night This introduces the risk that the conventional generation fleet will exhibit a large number of starts and shutdowns (Cycling.) This is particularly noted in the steam generators in the fleet in this analysis This condition creates wear-and-tear, high operating costs and eventually outages on the steam generation; thus it is not a desired operating practice. Actions were taken to prevent excessive number of starts and stops on the steam generators in PREPA (discussed later) Page 62

PROMOD Analysis Renewable Variability Renewable variability introduces additional operations costs by forcing conventional units to deviate from optimal dispatches. To define how this impacts the system, the renewable resources were modeled as block generation across the entire year while maintaining the energy produced at each renewable site With the renewable resources defined as block sources the conventional generation is able to dispatch optimally The cost difference of the conventional generation between the renewable variable and block models provides an estimation of the cost of variability Impact of Variability of Renewable Resources Increased in production cost $36,078,136 Increased curtailment 4.22% Increased in average production cost $/MWH $1.60 More GT's on line hours. 1006 Page 63

PROMOD Analysis Renewable Generation Forecast Error Impacts Generators are required to make day-ahead plans so that system security and economics can be maintained; Security Constrained Unit Commitment. This includes projections of renewable generators. Renewable forecasting errors increase with the forecasting horizon, having maximum impact on the day-ahead unit commitment. Large Forecasting errors result in Increased production costs due to deviation from optimal unit commitment and/or Increased curtailment; generation cannot be taken. Our study estimated the impact of forecast error using different methodologies to show how error may impact production costs and curtailment Page 64

PROMOD Analysis Scenario I The results of Scenario I and the required adjustments to the case are presented next. As will be seen two types of adjustments were required; to increase the minimum run time for the steam units to avoid excessive cycling and a reduction of the renewable generation to obtain reasonable levels of curtailment. These adjustments resulted in variations of the Scenario I which are presented and discussed. Page 65

PROMOD Analysis Scenario 1-0 This scenario corresponds to the initial run of Scenario I, without any adjustments. The case resulted in an excessive amount of cycling for economic reasons. As can be seen below where the Base Case only has the existing renewable projects, there was a large jump in the number of starts. Total Base Case I Scenario 1-O Forced / Sch Starts Economic Starts Total Forced / Sch Starts Economic Starts EcoElect 1 6 6 0 6 6 0 AES 9 9 0 9 9 0 CC SJUAN 33 30 3 28 11 17 AGUIRRE 1&2 10 10 1 10 10 1 SOCO 5 & 6 10 9 1 10 10 0 Aguirre CCP 87 2 86 162 5 157 PSSP 3&4 15 11 4 16 10 6 SJSP 9&10 24 23 1 36 17 19 Cambalache 4 0 4 2 0 2 Mayaguez 155 4 151 266 6 261 GT's 9 0 9 13 0 13 Hydro 0 0 0 0 0 0 New CCP 0 0 0 359 102 257 555 82 474 Page 66

PROMOD Analysis Scenario 1-1-0; Overview This scenario corresponds to the same conditions in previous scenario, but to achieve acceptable cycling, the minimum run time was increased to 720 hours for all the steam units. As will be shown next this change resulted in correct cycling of the steam generation, but there was important energy dump and the need to curtail renewable generation Page 67

PROMOD Analysis Scenario 1-1-0; Overview The tables below show that to match the generation with the load approximately 106 GWh have to be curtailed, most of it out of renewable generation, representing 5.63% of the energy and quite high. We also note that there is an small amount of thermal curtailment, but this can be absorbed using the emergency minimum of generators. Page 68

PROMOD Analysis Scenario 1-1-0 Generation Results Ecoelectrica & AES base loaded however lower capacity factor than with existing renewable Similar situation for other large producers Aguirre & SOUCO. Note that the cost of these producers is lower than the cost of the renewable. Scenario 1-1-0 Energy MWh Capacity Factor Costs $/MWh Energy MWh Base Case I Capacity Factor Base Case Costs $/MWh EcoElect 1 3,743,647 84.3% $78.89 3,982,049 89.7% $76.46 AES 3,224,989 81.1% $96.22 3,402,051 85.5% $94.24 CC SJUAN 1,848,081 52.7% $202.99 1,934,797 55.2% $201.93 AGUIRRE 1&2 4,053,919 51.4% $159.38 4,403,586 55.9% $158.29 SOUCO 5 & 6 5,246,697 73.0% $141.50 5,727,966 79.7% $141.27 Aguirre CCP 43,089 1.1% $276.95 76,821 2.0% $271.45 PSSP 3&4 1,534,613 40.6% $165.49 1,537,020 40.6% $165.49 SJSP 9&10 888,487 50.7% $178.03 913,901 52.2% $177.94 Cambalache 1,022 0.1% $361.91 4,069 0.4% $349.57 Mayaguez 57,399 3.3% $280.55 96,044 5.5% $278.73 GT's 5,628 0.2% $305.90 8,610 0.3% $302.20 Hydro 126,163 14.5% $0.00 126,163 14.5% $0.00 Total 20,773,734 $135.33 22,213,077 $134.62 Net Metering 126,921 - PV 1,294,951 20.7% $185.56 37,524 21.5% $185.56 WTG 468,627 32.4% $151.88 313,200 35.4% $151.88 Total Renewable w/o netmetering 1,763,579 23.4% $176.92 350,725 33.4% $168.72 Page 69 Case Total 22,664,234 22,563,801 $151.67

PROMOD Analysis Scenario 1-1-0 Unit Cycling This case was designed to resolve the issue of unacceptable economic cycling of the units to values in line with their capabilities and minimize the wear and tear of the units. This objective was achieved as shown below where the Base Case, Scenario 1-0 and Scenario 1-1-0 are compared. Total Base Case I Scenario 1-O Scenario 1-1-O Forced / Sch Starts Economic Starts Total Forced / Sch Starts Economic Starts Total Forced / Sche Starts EcoElect 1 6 6 0 6 6 0 10 6 4 AES 9 9 0 9 9 0 9 8 1 CC SJUAN 33 30 3 28 11 17 32 29 3 AGUIRRE 1&2 10 10 1 10 10 1 10 10 1 SOCO 5 & 6 10 9 1 10 10 0 10 9 1 Aguirre CCP 87 2 86 162 5 157 66 0 66 PSSP 3&4 15 11 4 16 10 6 15 12 4 SJSP 9&10 24 23 1 OK 36 17 X 19 23 22 1 Cambalache 4 0 4 2 0 2 2 0 2 Mayaguez 155 4 151 OK 266 6 261 117 2 115 GT's 9 0 9 13 0 13 7 0 7 Hydro 0 0 0 0 0 0 0 0 0 New CCP 0 0 0 359 102 257 555 82 474 298 96 202 OK X Economic Starts OK OK OK Page 70

PROMOD Analysis Scenario 1-1-0 Case Costs The Scenario with renewable generation results in a cost increase of US$ 77.3 million with respect of the Base Case. The reduction in conventional generation costs is not compensated by the increase in payments for the renewable generation. The table also shows the cost of volatility by comparing the cost of the case with an identical case where the renewable is dispatched as a base block (no volatility.) We see that this adds in the order of $ 36 million. Scenario Costs MM$ $/MWh Conventional Gen Cost 2,811,373,209 135.33 OK Block Costs 2,775,295,073 123.14 Cost of Renewable voltatility 36,078,136 20.46 X Renewable Gen Costs 312,003,612 176.92 Total Case Costs 3,123,376,822 138.59 Case with existing Renewable 3,046,147,982 135.16 Total Savings (Costs) (77,228,839) X Base Case Costs MM$ $/MWh Conventional Gen Cost 2,990,421,490 134.62 Renewable Gen Costs 55,726,493 180.02 Total Case Costs 3,046,147,982 135.00 Total Savings (Costs) Page 71

Number of times PROMOD Analysis Scenario 1-1-0: Renewable Volatility Another way to visualize the impact of the variability of the renewable generation is to compare the changes in the Net Load (Actual Load less Renewable) from one hour to the next with those of the Actual Load (i.e. true load supplied). The figure is an histogram showing the number of occurrences that the load changed a given amount in % from one hour to the next As can be observed in this figure the actual load has changes mostly concentrated from 10% to 8% while the Net Load has Changes from -12% to +12%. Hence greater volatility. 1600 1400 1200 1000 800 600 400 200 Gross Load Net Load 0 % Change over the hour Page 72

PROMOD Analysis Scenario 1-1-0 Representative days. Maximum Load Day (Thursday - 08/13/2015) The demand is the red line shown at the very top of all the other displayed generation indicating that no curtailment is required. We note however that even in this day AES generation has to be reduced during some hours 3500 3000 2500 2000 1500 1000 500 WTG PV Hydro GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 73

PROMOD Analysis Scenario 1-1-0 Representative days. Minimum Daytime Load Day (Saturday - 01/03/2015): To serve the demand in the evening, enough conventional generation must be dispatched resulting in substantial excess during daytime requiring its curtailment. The load drops below the thermal output. However in this case the dispatchers can use the emergency limits; e.g. Costa Sur = 250 down to 200, Aguirre 1&2 230 down to 200. Renewable must be curtailed to resolve this between 5 am and 5 pm 2500 2000 1500 1000 500 WTG PV Hydro GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 74

PROMOD Analysis Scenario 1-1-0 Representative days. Maximum Renewable Day (Sunday - 04/05/2015): to allow for the amount of renewable, conventional generation must be off or at minimum levels between 8 am 3 pm. Ecoelectrica has an economic shutdown. The amount of conventional generation dispatched is necessary to cover the evening demand Part of the renewable generation has to be curtailed. 3000 2500 2000 1500 1000 500 WTG PV Hydro GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 75

PROMOD Analysis Scenario 1-1-0 - Representative days. Maximum Dump Day (Friday - 04/24/2015): to allow for the amount of renewable, conventional generation must be off or at minimum levels between 7 am 3 pm. The amount of conventional generation dispatched is necessary to cover the evening demand Only renewable generation needs to be curtailed. 3000 2500 2000 1500 1000 500 WTG PV Hydro GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 76

PROMOD Analysis Scenario 1-1-0 Representative days. High Dump Day (Sunday - 10/25/2015): Defined as a day where the level of dump is above average and happens in multiple days. 6 am 3 pm generation exceeds demand and renewable generation must be curtailed. Conventional generation is at minimums but must be on-line to secure demand in the evening hours 3000 2500 2000 1500 1000 500 WTG PV Hydro GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 77

Curtailme nt as % of renewable energy PROMOD Analysis Scenario 1-1-0: Curtailment Reduction. The figure shows the renewable (blue) and total (red) curtailment reduction as Energy is being rejected from the case. We see that to achieve close to 2% curtailment almost 35% of the energy from renewable needs to be rejected, with a negative impact in achieving the required levels of penetration. There are diminishing returns for reductions beyond 3.4%, but this value is somewhat high. A balance must be found between curtailment and required penetration. 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% Renewable Dump Total Dump PROMOD Calculated Dump Total PROMOD Calculated Dump Renewable only % Page 78 0.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% % of Rejected Renewable Energy

PROMOD Analysis Scenario 1-1-0: Curtailment Reduction. The table below provides the details behind the curve above. Here we observe that with 579.4 MW in projects the curtailment is slightly above 2 % (curtailment of renewable) and to go to the next step the curtailment is 1.92% but the projects retained are reduced by 50 MW and the penetration drops from 6.6% to 6.1%. Thus 579.4 MW of renewable projects were retained, as shown in the next slide. Values Values Values Values Values Values Values Values Values MW Keept 884.2 802.2 772.2 702.2 662.2 624.4 579.4 529.4 494.9 MW Rejected 0 82 112 182 222 259.8 304.8 354.8 389.3 Penetration 9.66% 8.87% 8.66% 8.17% 7.68% 7.30% 6.59% 6.10% 5.65% Renewable Dump Original 102,250.06 102,250.06 102,250.06 102,250.06 102,250.06 102,250.06 102,250.06 102,250.06 102,250.06 Dump Reduction 0 28,537 34,722 47,512 58,575 65,496 75,370 80,723 84,798 New Dump 102,250.06 73,712.57 67,527.59 54,737.67 43,674.99 36,753.90 26,879.69 21,526.79 17,452.08 New Dump % new energy 5.4% 4.2% 4.0% 3.4% 2.9% 2.5% 2.0% 1.7% 1.5% Energy Rejected 0.0% 7.7% 9.6% 14.4% 19.2% 22.8% 29.7% 34.4% 38.8% Total Dump including termal as % renewable 5.63% 4.46% 4.19% 3.64% 3.13% 2.80% 2.33% 2.07% 1.86% PROMOD Calculated Dump Total 5.63% 2.99% 2.87% 2.55% 2.23% 2.04% PROMOD Calculated Dump Renewable only % 5.41% 2.76% 2.64% 2.26% 1.92% 1.70% Page 79

PROMOD Analysis Curtailment Reduction: Case 1-1-F. This case has the 579.4 MW accepted for continued analysis and should have curtailment in the order of 2% of the renewable generation. Rejected Maintained NUM TECNOLOGIA Capacidad NUM TECNOLOGIA Capacidad 1 Solar Fotovoltaica 20 Page 80 8 Solar Fotovoltaica 10 9 Solar Fotovoltaica 30 10 Solar Fotovoltaica 15 16 Solar Fotovoltaica 17.8 23 Solar Fotovoltaica 20 27 Solar Fotovoltaica 52 39 Solar Fotovoltaica 20 40 Solar Fotovoltaica 20 44 Solar Fotovoltaica 20 53 Solar Fotovoltaica 30 54 Solar Fotovoltaica 30 56 Solar Fotovoltaica 20 57 Solar Fotovoltaica 20 Total 304.8 2 Eólica 10 3 Solar Fotovoltaica 20 4 Solar Fotovoltaica 57 7 Solar Fotovoltaica 40 15 Solar Fotovoltaica 20 17 Solar Fotovoltaica 30 18 Solar Fotovoltaica 10 21 Solar Fotovoltaica 33.5 30 Solar Fotovoltaica 50 31 Eólica 75 32 Eólica 26 36 Solar Fotovoltaica 20 42 Solar Fotovoltaica 20 43 Solar Fotovoltaica 20 46 Solar Fotovoltaica 20 47 Solar Fotovoltaica 25 59 Eólica 34.5 61 Eólica 18.4 62 Solar Fotovoltaica 10 63 Solar Fotovoltaica 20 Total 579.4

PROMOD Analysis Scenario 1-1-F; Overview The tables below show that to match the generation with the load approximately 30 GWh have to be curtailed, most of it out of renewable generation, representing 2.26% of the energy as expected. We also note that there is an small amount of thermal curtailment, but this can be absorbed using the emergency minimum of generators. Peak MW MWH Load Factor Load 3,318.80 22,557,867 77.59% Peak MW MWH Times Unserved PROMOD - - 0 Unserved zero reserve - - 0 Peak MW MWH % Dump renewable 377.24 34,321 2.55% Renewable component 592.43 30,396 2.26% Thermal component 154.28 3,926 0.29% Reconciliation Load 22,557,867 Less not served - Plus energy dumped 34,321 Total Generation 22,592,188 Page 81

PROMOD Analysis Scenario 1-1-F Generation Results Ecoelectrica & AES again base loaded with lower capacity factor than in the Base Case. Similar situation for other large producers Aguirre & SOUCO. As before the cost of these producers is lower than the cost of the renewable. Energy MWh Scenario 1-1-F Capacity Factor Costs $/MWh Energy MWh Base Case I Capacity Factor Base Case Costs $/MWh EcoElect 1 3,875,835 87.3% $77.50 3,982,049 89.7% $76.46 AES 3,308,940 83.2% $95.25 3,402,051 85.5% $94.24 CC SJUAN 1,854,507 52.9% $202.87 1,934,797 55.2% $201.93 AGUIRRE 1&2 4,144,333 52.6% $159.10 4,403,586 55.9% $158.29 SOUCO 5 & 6 5,406,660 75.3% $141.41 5,727,966 79.7% $141.27 Aguirre CCP 49,397 1.3% $274.96 76,821 2.0% $271.45 PSSP 3&4 1,523,826 40.3% $165.48 1,537,020 40.6% $165.49 SJSP 9&10 889,390 50.8% $178.02 913,901 52.2% $177.94 Cambalache 1,422 0.2% $361.31 4,069 0.4% $349.57 Mayaguez 62,203 3.6% $280.42 96,044 5.5% $278.73 GT's 5,775 0.2% $306.55 8,610 0.3% $302.20 Hydro 126,162 14.5% $0.00 126,163 14.5% $0.00 Total 21,248,451 $134.57 22,213,077 $134.62 Net Metering 126,921 - PV 748,190 20.8% $185.56 37,524 21.5% $185.56 WTG 468,627 32.4% $151.88 313,200 35.4% $151.88 Total Renewable w/o netmetering 1,216,817 24.8% $173.12 350,725 33.4% $168.72 Page 82 Case Total 22,592,189 22,563,801 $151.67

PROMOD Analysis Scenario 1-1-F Unit Cycling Scenario 1-1-F has the same adjustments as 1-1-0 to prevent excessive starts and as before this results in acceptable levels of economic cycling of units. Total Base Case I Scenario 1-1-O Scenario 1-1-F Forced / Sch Starts Economic Starts Total Forced / Sche Starts Economic Starts Total Forced / Sche Starts EcoElect 1 6 6 0 10 6 4 6 6 0 AES 9 9 0 9 8 1 9 8 1 CC SJUAN 33 30 3 32 29 3 31 28 3 AGUIRRE 1&2 10 10 1 10 10 1 10 10 1 SOCO 5 & 6 10 9 1 10 9 1 10 9 1 Aguirre CCP 87 2 86 66 0 66 68 1 67 PSSP 3&4 15 11 4 15 12 4 15 11 4 SJSP 9&10 24 23 1 23 22 1 23 22 1 Cambalache 4 0 4 2 0 2 2 0 2 Mayaguez 155 4 151 117 2 115 120 3 117 GT's 9 0 9 7 0 7 8 0 7 Hydro 0 0 0 0 0 0 0 0 0 New CCP 0 0 0 359 102 257 298 96 202 299 96 203 Economic Starts Page 83

PROMOD Analysis Scenario 1-1-F Case Costs The Scenario with renewable generation results in a cost increase of US$ 24 million with respect of the Base Case with limited (exiting) renewable generation. Note that as before the reduction in conventional generation costs is not compensated by the increase in payments to the renewable generation providers The volatility in this case is less than in 1-1-0 as shown next. Scenario 1-1-F Base Case I MM$ $/MWh MM$ $/MWh Conventional Gen Cost 2,859,314,284 134.57 Conventional Gen Cost 2,990,421,490 134.62 Renewable Gen Costs 210,655,091 173.12 Renewable Gen Costs 55,726,493 180.02 Total Case Costs 3,069,969,374 136.65 Total Case Costs 3,046,147,982 135.00 Case w/o Renewable 3,046,147,982 135.00 Total Savings (Costs) (23,821,392) Total Savings (Costs) Page 84

Number of times PROMOD Analysis Scenario 1-1-F: Renewable Volatility Reviewing the variability of the Net Load (Actual Load less Renewable Generation) we observe in this case a similar distribution in the histogram as PREPA s load, The Actual and Net load has changes mostly concentrated from 10% to 8%. 1600 1400 1200 1000 800 Gross Load Net Load 600 400 200 0 % Change over the hour Page 85

PROMOD Analysis Scenario 1-1-F Representative days. Maximum Load Day (Thursday - 08/13/2015) Load-generation for is balanced (no curtailment or emergency power necessary). AES, Ecoelectrica & San Juan CC at or near max capacity. 3500 3000 WTG PV 2500 Hydro GT's Scenario 1-1-0 3500 3000 WTG 2000 1500 Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP 2500 2000 1500 1000 PV Hydro GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES 1000 500 SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand 500 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 EcoElect 1 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 86

PROMOD Analysis Scenario 1-1-F Representative days. Maximum Renewable Day (Sunday - 04/05/2015): Similar to Scenario 1-1-O, there is some level of curtailment on renewable, but in this case Ecoelectrica was not shut down for economic reasons 3000 2500 WTG PV Case 1-1-0 3000 2000 Hydro GT's Mayaguez Cambalache 2500 2000 1500 WTG PV Hydro GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP 1500 1000 SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN 1000 SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN 500 AES EcoElect 1 500 AES EcoElect 1 Demand Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 87

2500 PROMOD Analysis Scenario 1-1-F Representative days. Maximum Dump Day / Minimum Demand Day (Saturday - 01/03/2015): We observe that the plots appear to be very much the same except that the renewable peak is shaved (lower) in the Scenario 1-1-F. There is some thermal generation dump, but this can be handled by the emergency lower limits. Case 1-1-0 Minimum Demand Day 2000 WTG PV Hydro GT's 1500 Mayaguez Cambalache SJSP 9&10 PSSP 3&4 1000 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN 500 AES EcoElect 1 Demand 0 3000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Case 1-1-0- Max Dump 2500 WTG PV Hydro 2000 GT's Mayaguez Cambalache 1500 SJSP 9&10 PSSP 3&4 Aguirre CCP 1000 SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES 500 EcoElect 1 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 88

PROMOD Analysis Scenario 1-1-F Representative days. High Dump Day (Sunday - 10/25/2015): Defined as a day where the level of dump is above average and happens in multiple days. 6 am 2 pm generation exceeds demand and renewable generation must be curtailed. The dump is much less than in scenario 1-1-0. Conventional generation is at minimum but must be on-line to serve demand in the evening hours 3000 Case 1-1-0 3000 2500 2000 1500 1000 500 2500 2000 1500 WTG PV Hydro 1000 GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP 500 SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 WTG PV Hydro GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 89

PROMOD Analysis Scenario 1-1-F - Impact of Errors in the Forecast Objective: determine what different levels of errors do to the performance of the system in terms of operating costs and curtailment Option 1 Assume a percentage of error either over or under the forecast Option 2 Shift the forecast forward or backward by one hour Option 3 Perform a Monte Carlo simulation Option 1: modeling (8% lower production) shows a net cost of $12. 3million or 8% higher production has the impact of 0.7% higher curtailment. There is a reduction in costs. Option 1 Single extreme value + => more energy - => less energy -8% 2 Error in forecast timing by 1 hour Max Min 3 Monte Carlo (uniform ditribution) Max / Min 8% -8% Option Selected 1 Option 1 Single extreme value + => more energy - => less energy 8% 2 Error in forecast timing by 1 hour Max Min 3 Monte Carlo (uniform ditribution) Max / Min 8% -8% Option Selected 1 Net Costs 12,030,110.97 Curtailed Energy 0.00% Net Costs (12,430,663.72) Curtailed Energy 0.68% Page 90

PROMOD Analysis Scenario 1-1-F - Impact of Errors in the Forecast Impact of Errors in the Forecast Option 2 indicates that there would be a reduction in costs by advancing the forecast by one our. The curtailment is increased by 0.29%. The a cost increase happens if the production is shifted back by one hour Errors in Forecast Results Option 1 Single extreme value + => more energy - => less energy -8% 2 Error in forecast timing by 1 hour Max Min 3 Monte Carlo (uniform ditribution) Max / Min 8% -8% Option Selected 2 Net Costs (7,661,747.26) Curtailed Energy 0.29% Page 91

PROMOD Analysis Scenario 1-1-F Impact of Errors in the Forecast Option 3 shows a net cost reduction of $21,752. and an increase in curtailment of 0.19%. Errors in Forecast Results Option 1 Single extreme value + => more energy - => less energy -8% 2 Error in forecast timing by 1 hour Max Min 3 Monte Carlo (uniform ditribution) Max / Min 8% -8% Option Selected 3 Net Costs (21,752.51) Curtailed Energy 0.19% The most significant impact of errors in the forecast is the increase in curtailment that could happen if the renewable generation produced more than what was forecasted and reflected in the unit commitment. Page 92

PREPA Renewable Energy Resources Integration Study Scenario II Storage Case Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

PROMOD Analysis Scenario II: Formulation Scenario II is intended to represent the conditions during 2017 or 2018, when PREPA is expected to have 12% of its load supplied from renewable resources and natural gas is available at Aguirre and in the north of the island. The scenario also contains a larger amount of net-metering (100MW) The key element of Scenario II is that to allow 12% penetration with PREPA s current generating fleet a large storage facility is added. Most typical types of storage devices; pump storage or compressed air storage; are not feasible for Puerto Rico, thus the analysis is based on Battery Energy Storage Systems (BESS.) However if other technologies were available the study is still valid. Page 94

Total Curtailment (% of renewable) PROMOD Analysis Scenario II : BESS Selection Battery Energy Storage Systems (BESS) are expensive hence we minimized its size. We did not attempt to shift energy between the days, but it was delivered to the load as soon as the conditions allowed; delaying it did not compensate the costs 4.5% Some level of curtailment has to be accepted. 4,000 GWh (0.6% curtailment) and 1,750 GWh (2.1% curtailment selected for the evaluation. Both 240 MW. 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 0 2000 4000 6000 8000 10000 12000 Size of Storage GWh Page 95

PROMOD Analysis Scenario II: BESS Costs Energy Storage Costs We reviewed various sources for the costs of BESS and selected the minimum cost found as we expect significant economies of scale. Production Cost Savings by the releasing of the energy were accounted for. Cost annualized using 9% discount rate and a conservative 20 years life (15 is more typical) 4000 MWh Storage Parameters and Costs Cost* Unit $/kwh or $/kw MWh or MW MM$ Energy 400 4000.00 1600.0 Capacity 300 240.00 72 Total 1672.0 Annuity with 20 years life @ 9% 183 O&M Fixed $/KW 10 2.4 Total Annual Cost 185.6 Annual Savings 57.13 Net Cost 128.43 1750 MWh Storage Parameters and Costs Cost* Unit $/kwh or $/kw MWh or MW MM$ Energy 400 1750.00 700.0 Capacity 300 240.00 72 Total 772.0 Annuity with 20 years life @ 9% 85 O&M Fixed $/KW 10 2.4 Total Annual Cost 87.0 Annual Savings 52.89 Net Cost 34.08 Storage Cap Limit 240 Curtailment MWh 13,132.99 Curtailment % or renewable 0.6% Storage Cap Limit 240 Curtailment MWh 50,822.46 Curtailment % of renewable 2.1% Page 96

PROMOD Analysis Scenario II: Overview The tables below show the energy production and curtailment for each of the alternatives studied. We note effect of larger storage on the curtailment. 4000 MWh 1750 MWh Peak MW MWH Load Factor Load 3,318.80 22,557,867 77.59% Peak Load MW MWH Factor Load 3,318.80 22,557,867 77.59% Page 97 Peak MW MWH Times Unserved PROMOD - - 0 Unserved zero reserve - - 0 Peak MW MWH Times Dump renewable 675.41 13,133 0.60% Reconciliation Load 22,557,867 Less not served 0 Plus energy dumped 13,133 Plus left in storage 0.00 Total Generation 22,571,000 Peak MW MWH Times Unserved PROMOD - - 0 Unserved zero reserve - - 0 Peak MW MWH Times Dump renewable 763.58 50,822 2.32% Reconciliation Load 22,557,867 Less not served - Plus energy dumped 50,822 Plus left in storage - Total Generation 22,608,689

PROMOD Analysis Scenario II; 4000 GWH Generation Results We observe the same results as in the previous cases; the generation reduction on generators whose cost is less than the price paid for the renewable. Base Case II; is current fleet converted to gas and existing renewable generation Note the increase in the cost of Ecoelectrica and AES due to the fixed payments over less energy. Scenario II - 4,000 MWh Energy MWh Capacity Factor Costs $/MWh Energy MWh Base Case II Capacity Factor Costs $/MWh EcoElect 1 3,516,237 79.2% $87.12 3,993,562 89.9% $84.23 AES 3,128,825 78.7% $100.50 3,409,711 85.7% $98.35 CC SJUAN 2,371,695 67.7% $122.54 2,577,653 73.6% $121.00 AGUIRRE 1&2 4,490,542 57.0% $135.01 5,311,026 67.4% $133.95 SOUCO 5 & 6 3,943,295 54.9% $146.71 3,923,370 54.6% $146.67 Aguirre CCP 801,239 17.6% $141.12 971,128 21.3% $140.68 PSSP 3&4 1,259,721 50.8% $165.48 1,258,530 55.3% $165.60 SJSP 9&10 525,240 37.3% $181.15 602,532 37.9% $180.62 Cambalache 1,000 0.1% $385.49 4,478 0.5% $381.60 Mayaguez 12,379 0.7% $295.63 22,742 1.3% $289.63 GT's 7,098 0.2% $318.98 11,676 0.4% $338.72 Hydro 126,163 14.5% $0.00 126,163 14.5% $0.00 Total 20,183,433 $124.82 22,212,571 $123.20 Net Metering 197,404 24.8% PV 1,721,536 20.7% $189.06 37,524 21.5% $174.94 WTG 468,627 32.2% $166.15 313,200 35.4% $154.23 Total Renewable 2,190,163 23.4% $184.16 350,725 33.4% $156.44 Page 98 Case Total 22,571,001 22,563,295

PROMOD Analysis Scenario II 1750 GWh; Generation Results Same results as the case above; most of the generation reduction happens in generators whose cost is less than the price paid for the renewable. Scenario II - 1,750 MWh Energy MWh Capacity Factor Costs $/MWh Energy MWh Base Case II Capacity Factor Costs $/MWh EcoElect 1 3,531,384 79.5% $87.12 3,993,562 89.9% $84.23 AES 3,133,178 78.8% $100.50 3,409,711 85.7% $98.35 CC SJUAN 2,374,453 67.8% $122.54 2,577,653 73.6% $121.00 AGUIRRE 1&2 4,500,564 57.1% $135.01 5,311,026 67.4% $133.95 SOUCO 5 & 6 3,947,056 54.9% $146.71 3,923,370 54.6% $146.67 Aguirre CCP 802,887 17.6% $141.12 971,128 21.3% $140.68 PSSP 3&4 1,259,721 50.8% $165.48 1,258,530 55.3% $165.60 SJSP 9&10 525,240 37.3% $181.15 602,532 37.9% $180.62 Cambalache 1,000 0.1% $385.49 4,478 0.5% $381.60 Mayaguez 12,381 0.7% $295.63 22,742 1.3% $289.63 GT's 7,098 0.2% $318.98 11,676 0.4% $338.72 Hydro 126,163 14.5% $0.00 126,163 14.5% $0.00 Total 20,221,123 $124.79 22,212,571 $123.20 Net Metering 197,404 24.8% PV 1,721,536 20.7% $189.06 37,524 21.5% $174.94 WTG 468,627 32.2% $166.15 313,200 35.4% $154.23 Total Renewable 2,190,163 23.4% $184.16 350,725 33.4% $156.44 Case Total 22,608,690 22,563,295 Page 99

PROMOD Analysis Scenario II Unit Cycling The cycling of the units is increased, note that there were 5 economic stops for Ecoelectrica, but this is within the capabilities of the units. Same case for Aguirre CCP Base Case II Scenario II Scenario III Total Forced / Sche Starts Economic Starts Total Forced / Sche Starts Economic Starts Total Forced / Sche Starts Economi Starts EcoElect 1 6 6 0 11 6 5 10 6 4 AES 9 9 0 9 8 1 9 8 1 CC SJUAN 32 31 1 31 29 2 30 28 3 AGUIRRE 1&2 10 9 1 12 9 3 12 8 4 SOCO 5 & 6 15 9 6 16 10 6 14 9 5 Aguirre CCP 136 30 106 164 29 135 206 9 197 PSSP 3&4 15 11 4 15 11 4 3 2 1 SJSP 9&10 16 15 1 14 13 1 0 0 0 Cambalache 5 0 5 2 0 2 0 0 0 Mayaguez 42 1 40 36 1 36 5 0 5 GT's 10 0 10 8 0 8 1 0 1 Hydro 0 0 0 0 0 0 0 0 0 New CCP 9 3 6 293 120 174 315 114 201 297 72 226 Page 100

PROMOD Analysis Scenario 1-1-0 Case Costs This Scenario resulted in a significant increase in costs (169 to 260 million per year) due to the investment on the storage and the cost to be paid for the renewable that is not compensated by the reduction in operating costs. Scenario II - 4,000 MWh Base Case II MM$ $/MWh MM$ $/MWh Conventional Gen Cost $2,519,222,376 $ 124.82 Conventional Gen Cost $2,736,575,761 $ 123.20 StorageAnnual Costs $128,434,743 Renewable Gen Costs $403,333,646 $ 182.99 Renewable Gen Costs $54,868,346 $ 156.44 Total Case Costs $3,050,990,765 $ 136.33 Total Case Costs $2,791,444,106 $ 123.72 Case with existing Renewable $2,791,444,106 $ 124.77 Total Savings (Costs) ($259,546,658) Scenario II - 1,750 MWh Base Case II MM$ $/MWh MM$ $/MWh Conventional Gen Cost $2,523,455,454 $ 124.79 Conventional Gen Cost $2,736,575,761 $ 123.20 StorageAnnual Costs $34,075,993 Renewable Gen Costs $403,333,646 $ 170.51 Renewable Gen Costs $54,868,346 $ 156.44 Total Case Costs $2,960,865,093 $ 130.78 Total Case Costs $2,791,444,106 $ 123.72 Case with existing Renewable $2,791,444,106 $ 124.56 Total Savings (Costs) ($169,420,987) Page 101

Number of times PROMOD Analysis Scenario II The volatility in this case is higher than in any of the previous cases due to the impact of much higher renewable generation. The Net Load reaches values of up to 18% per hour (using as the base the previous hour load). In this case we identified that there was a change of 300 MW from one hour to the next However in this case the storage that has a capacity of 240 MW and that can react very quickly to changes in renewable generation, can mitigate if not completely eliminate the impacts of these fast changes. 1600 1400 1200 1000 800 600 Gross Load Net Load 400 200 0 % Change over the hour Page 102

MW Storage MWh PROMOD Analysis Scenario II Representative days. Maximum Load Day (Thursday - 08/13/2015) Load-generation for is balanced (no curtailment or emergency power necessary) The storage was not necessary so both cases have the same curve. Scenario 1-1-0 3500 1 3000 2500 2000 1500 1000 500 1 1 1 1 1 0 0 0 0 From Storage & Add PV WTG PV Hydro GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP SOUCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand Demand + Storage Storage Page 103 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0

MW Storage MWh PROMOD Analysis Scenario II Representative days. Minimum Day time load with (Saturday 01/03/2017) Storage is necessary to prevent curtailment. The storage did not go over 1750 MWh, so both cases have the same results. 4000 & 1750 MWh 2500 1,138 MWh Load + flows to storage 1200 From Storage 2000 To Storage 1000 From Storage & Add PV WTG PV Hydro 1500 Load 800 GT's Mayaguez Cambalache SJSP 9&10 Energy in storage 600 PSSP 3&4 Aguirre CCP 1000 SOUCO 5 & 6 400 AGUIRRE 1&2 CC SJUAN AES 500 200 EcoElect 1 Demand Demand + Storage Storage 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0 Page 104

MW MW Storage MWh Storage MWh PROMOD Analysis Scenario II Representative days. Maximum Renewable Day (Sunday 04/05/2017) Storage is necessary to prevent curtailment and reaches its maximum capacity Note the significant difference in curtailment due to the difference in limits. 3500 3000 2500 2000 1500 1000 500 To Storage 4000 MWh 4000 MWh From Storage Energy in storage curtailment 4500 4000 3500 3000 2500 2000 1500 1500 1000 1000 500 500 3500 1,750 MWh 3000 From Storage & Add PV To Storage WTG PV 2500 2000 1750 MWh Hydro GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP SOUCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand Demand + Storage Storage curtailment Energy in storage 2000 From Storage 1800 1600 1400 1200 1000 800 600 400 200 From Storage & Add PV WTG PV Hydro GT's Mayaguez Cambalache SJSP 9&10 PSSP 3&4 Aguirre CCP SOUCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand Demand + Storage Storage 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0 Page 105

MW MW Storage MWh Storage MWh PROMOD Analysis Scenario II Representative days. Maximum Dump Day (Sunday 01/18/2017) Storage again is necessary to prevent curtailment and reaches its maximum capacity Note that in both cases there is some energy leftover in storage from the previous day. This limits the absorption during this day 3500 3000 To Storage 2500 2000 4000 MWh 4000 MWh From Storage curtailment 4500 3500 4000 1,750 MWh 3000 From Storage & Add PV 3500 WTG To Storage PV 1750 MWh 2500 Hydro 3000 GT's Mayaguez 2000 2500 Cambalache SJSP 9&10 PSSP 3&4 curtailment 2000 From Storage 1800 From Storage & Ad 1600 WTG PV Hydro 1400 GT's Mayaguez 1200 Cambalache SJSP 9&10 1000 PSSP 3&4 1500 1000 500 Energy in storage 2000 1500 1500 1000 1000 500 500 Aguirre CCP SOUCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand Demand + Storage Storage Energy in storage 800 600 400 200 Aguirre CCP SOUCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand Demand + Storage Storage 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 106 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0

PREPA Renewable Energy Resources Integration Study Scenario III : Combined Cycle Addition Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

PROMOD Analysis Scenario III Scenario III has the same conditions as Scenario II, but in order to achieve the 12% penetration level, two new combined cycle plant (SGT800 5x1 ACC) are added to the system. As presented previously these units have the ability to move from 35 MW to 334 MW at 30MW/min. A full description of the additional PV for 12% penetration and the new combined cycle unit were provided earlier in this presentation. Page 108

PROMOD Analysis Scenario III; Overview The tables below show that to match the generation with the load approximately 56 GWh have to be curtailed, all of it renewable generation, representing 2.35% of the energy. This is considered reasonable. Load, Dump & Unserved Energy Results Peak Load MW MWH Factor Load 3318.80 22,557,867 77.59% Peak MW MWH Times Unserved PROMOD 0 0 0 Unserved zero reserve 0 0 0 Peak MW MWH Times Dump renewable 585.38 56,372 2.35% Renewable Component 585.38 56,372 2.35% Thermal Component 0-0.00% Reconciliation Load 22,557,867 Less not served 0 Plus energy dumped 56,372 Total Generation 22,614,239 Check OK Page 109

PROMOD Analysis Scenario III Generation Results As before there was a significant reduction in the generation of more efficient generation. However in this case the new CCP s with a capacity factor of 50% are providing relatively cheap energy. Note that SJSP was not dispatched in the case and almost no GT s Energy MWh Scenario III Capacity Factor Costs $/MWh Energy MWh Base Case II Capacity Factor Costs $/MWh EcoElect 1 3,912,338 88.1% $85.07 3,993,562 89.9% $84.23 AES 3,383,240 85.1% $98.64 3,409,711 85.7% $98.35 CC SJUAN 2,430,050 69.4% $121.05 2,577,653 73.6% $121.00 AGUIRRE 1&2 3,393,934 43.0% $136.52 5,311,026 67.4% $133.95 SOUCO 5 & 6 3,466,472 48.3% $146.75 3,923,370 54.6% $146.67 Aguirre CCP 272,860 6.0% $145.02 971,128 21.3% $140.68 PSSP 3&4 278,850 12.2% $168.89 1,258,530 55.3% $165.60 SJSP 9&10 0 0.0% $0.00 602,532 37.9% $180.62 Cambalache 0 0.0% $0.00 4,478 0.5% $381.60 Mayaguez 2,622 0.1% $284.66 22,742 1.3% $289.63 New_CC 2,948,031 50.4% $116.27 0 0.0% $0.00 GT's 735 0.0% $179.93 11,676 0.4% $338.72 Hydro 126,163 0.1454762 $0.00 126,163 14.5% $0.00 Total 20,215,294 $116.90 22,212,571 $123.20 PV 1,886,795 20.8% $189.15 37,524 21.5% $174.94 WTG 512,143 32.2% $163.69 313,200 35.4% $154.23 Ttl Renewable (incl netmeter) 2,398,938 22.9% $184.76 350,725 33.4% $156.44 Case Total 22,614,232 22,563,295 Page 110

PROMOD Analysis Scenario 1-1-F Unit Cycling This case has increased level of economic starts/shutdowns when compared with the base case but basically on Aguirre CCP s GT in addition to 4 cycles at Ecoelectrica. Base Case II Scenario II Scenario III Total Forced / Sche Starts Economic Starts Total Forced / Sche Starts Economic Starts Total Forced / Sche Starts Economic Starts EcoElect 1 6 6 0 11 6 5 10 6 4 AES 9 9 0 9 8 1 9 8 1 CC SJUAN 32 31 1 31 29 2 30 28 3 AGUIRRE 1&2 10 9 1 12 9 3 12 8 4 SOCO 5 & 6 15 9 6 16 10 6 14 9 5 Aguirre CCP 136 30 106 164 29 135 206 9 197 PSSP 3&4 15 11 4 15 11 4 3 2 1 SJSP 9&10 16 15 1 14 13 1 0 0 0 Cambalache 5 0 5 2 0 2 0 0 0 Mayaguez 42 1 40 36 1 36 5 0 5 GT's 10 0 10 8 0 8 1 0 1 Hydro 0 0 0 0 0 0 0 0 0 New CCP 9 3 6 293 120 174 315 114 201 297 72 226 Page 111

PROMOD Analysis Scenario III Case Costs In this case the operating costs had an important reduction due to the entry of the combined cycle. Therefore it is necessary to add to the case the cost of this investment which was added as a fixed annual value assuming a life 25 years and a discount rate of 9%. The capital was assumed to be in the order of $ 1,100 per kw all in installed The tables below show the results for this scenario, where we note that it resulted in an increase in costs of approximately $ 61 million assuming Natural Gas. If LFO # 2 is required the cost will be higher. Scenario III Base Case II MM$ $/MWh MM$ $/MWh Conventional Gen Cost 2,363,109,426 116.90 Conventional Gen Cost 2,736,575,761 123.20 CCP Annual Costs 83,119,148 Renewable Gen Costs 406,744,436 184.76 Renewable Gen Costs 54,868,346 156.44 Total Case Costs 2,852,973,009 126.16 Total Case Costs 2,791,444,106 123.72 Case w/o Renewable 2,791,444,106 123.44 Total Savings (Costs) (61,528,903) Page 112

-18.0% -17.0% -16.0% -15.0% -14.0% -13.0% -12.0% -11.0% -10.0% -9.0% -8.0% -7.0% -6.0% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% Number of times PROMOD Analysis Scenario III - Volatility The volatility of this case is similar to that of Scenario II and it is higher than that observed in any of the other cases. However, in this case the new CCP (668 MW) can completely mitigate this extra effect it is the main machine that will be following the variations in the renewable resource as shown in the next section. 1600 1400 1200 1000 800 600 Gross Load Net Load 400 200 0 % Change over the hour Page 113

PROMOD Analysis Scenario III Maximum Load Day (Thursday -08/13/2015): Ecoelectrica, AES, San Juan CC and Costa Sur 5&6 are at or very near maximum output through the day. Aguirre 1&2 is also very close to its maximum. The bulk of the reduction to accommodate for the renewable generation is provided by the new CCP s as well as the evening supply 3500 3000 2500 2000 1500 1000 500 WTG PV Hydro GT's Mayaguez Cambalache New CCP SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand Page 114 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

PROMOD Analysis Scenario III Maximum Dump Day (02/22/2015 Sunday ): The new CCP was brought down to zero during the curtailment and Ecoelectrica was off. The balance of the generation was low cost, necessary for the evening peak and it was at the minimum. 3000 2500 2000 1500 1000 500 WTG PV Hydro GT's Mayaguez Cambalache New CCP SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 115

PROMOD Analysis Scenario III Minimum Daytime Load Day ( Saturday 01/03/2015): There is an small amount of curtailment before Aguirre was turned off. 2500 2000 1500 1000 500 WTG PV Hydro GT's Mayaguez Cambalache New CCP SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Page 116

PROMOD Analysis Scenario III Maximum Renewable Day (Sunday - 04/05/2015): Necessary to curtail the renewable between about 7:00 am through about 3:00 pm. The new CCP is brought down to its minimum during the curtailment. Ecoelectrica was off. 3000 2500 2000 1500 1000 500 WTG PV Hydro GT's Mayaguez Cambalache New CCP SJSP 9&10 PSSP 3&4 Aguirre CCP SOCO 5 & 6 AGUIRRE 1&2 CC SJUAN AES EcoElect 1 Demand Page 117 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

PREPA Renewable Energy Resources Integration Study Intra-Hour Modeling Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

05:02 AM 05:45 AM 06:28 AM 07:12 AM 07:55 AM 08:38 AM 09:21 AM 10:04 AM 10:48 AM 11:31 AM 12:14 PM 12:57 PM 01:40 PM 02:24 PM 03:07 PM 03:50 PM 04:33 PM 05:16 PM 06:00 PM 06:43 PM Intra-hour modeling The objective is to bridge the gap between long term stability assessment and the hourly assessment performed by PROMOD. Renewable generation is modeled in 10 minute intervals The analysis is done with an auxiliary program called PAT that reads PROMOD results and evaluates the behavior inside selected hours. Several critical hours were evaluated in detail. April 15 2:00 pm 6:00 pm March 11 11:00 am 1:00 pm April 13 9:00 am 11:00 am December 16 4:00 pm 6:00 pm 550 500 450 400 350 300 250 200 150 100 50 0 WTG PV TOTAL Page 119

14:00 14:10 14:20 14:30 14:40 14:50 15:00 15:10 15:20 15:30 15:40 15:50 16:00 16:10 16:20 16:30 16:40 16:50 17:00 17:10 17:20 17:30 17:40 17:50 18:00 18:10 18:20 18:30 18:40 18:50 14:00 14:10 14:20 14:30 14:40 14:50 15:00 15:10 15:20 15:30 15:40 15:50 16:00 16:10 16:20 16:30 16:40 16:50 17:00 17:10 17:20 17:30 17:40 17:50 18:00 18:10 18:20 18:30 18:40 18:50 Intra-hour modeling Results The April 15th and hours between 2:00 pm and 6:00 pm and December 16th and hours between 4 and 6 pm were the most critical, On April 15 th the thermal units available had an aggregated 44 MW/minute ramping capability to meet a maximum requirement of 17 MW/minute resulting from the load and renewable resources On December 16 th the generation available was 38 MW/min for a ramp requirement of 19 MW/min. Ramp Capability Upper Limit 2500 60 2000 40 SOUCO 6 SOUCO 5 20 1500 SAN JUAN COMBINED CYCLE 2 SAN JUAN COMBINED CYCLE 1 1000 MAYAGUEZ GT 3 MAYAGUEZ GT 2 MAYAGUEZ GT 1 AGUIRRE STEAM_2 AGUIRRE STEAM_1 TOTAL MOVING THERMAL 0 Ramp Capability Lower Limit -20 ACTUAL RAMP MW/MINUTE UP RAMP MW/MINUTE CAPABILITY DOWN RAMP MW/MINUTE CAPABILITY MAX CAPACITY OF MOVING UNITS 500 MIN CAPACITY OF MOVING UNITS -40 0-60 Page 120

PROMOD Analysis Summary of Results & Conclusions Base Case Scenario I Scenario I-O Scenario I-1-O Scenario I-1-F Base Case Scenario II & III Scenario II 1750 MWh Scenario II 4000 MWh Scenario III Total PREPA Generation (net of dump) 22,557,867 22,430,946 22,430,946 22,557,867 22,360,462 22,360,462 22,360,462 Energy Dump / Curtilment 0.67% 5.41% 2.26% 1.56% 2.32% 0.60% 2.35% Renewable Generation in Case Renewable Concident Peak MW 120 923 618 120 1192 1192 1196 Net-Metering Capacity in case MW 0 64 64.3 0 100 100 100 PPOA Capacity in case MW 120 884 579 120 1123 1123 1123 Renewable MWh (includes net-metering) 350,724.51 1,890,499.42 1,343,738.09 350,724.51 2,387,567.65 2,387,567.65 2,398,937.82 Renewable MWh (only PPOA) 350,724.51 1,763,578.60 2,190,163.19 2,190,163.19 2,190,163.19 Penetration 1.92% 9.66% 6.47% 1.92% 12.00% 12.00% 12.00% Other investments 240 MW BEES / 1750 MWh 240 MW BEES / 4000 MWh 2x334 MW CCP Operating Costs Conventional 2,745,921,490 2,566,873,209 2,614,814,284 2,736,575,761 2,523,455,454 2,519,222,376 2,363,109,426 Renewable 55,726,493 312,003,612 233,157,564 54,868,346 403,333,646 403,333,646 406,744,436 Storage or CCP carrying value 34,075,993 128,434,743 83,119,148 Total 2,801,647,982 2,878,876,822 2,847,971,848 2,791,444,106 2,960,865,093 3,050,990,765 2,852,973,009 Cost in $/MWh 124.20 128.34 126.97 123.75 132.42 136.45 127.59 Number of cycles for economic reasons EcoElect 1 0 0 4 6 5 5 5 4 AES 0 0 1 9 1 1 1 1 CC SJUAN 3 17 3 31 2 2 2 3 AGUIRRE 1&2 1 0 1 10 3 3 3 4 SOUCO 5 & 6 1 0 1 10 6 6 6 5 Aguirre CCP 86 157 66 68 135 135 135 197 PSSP 3&4 4 6 4 15 4 4 4 1 SJSP 9&10 1 19 1 23 1 1 1 0 Cambalache 4 2 2 2 2 2 2 0 Mayaguez 151 260 115 120 36 36 36 5 GT's 9 13 7 8 8 8 8 1 Hydro 0 0 0 0 0 0 0 0 New CCP 6 Total 257 474 202 299 201 315 315 201 Page 121

PREPA Renewable Energy Resources Integration Study Conclusions Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.

Summary of Results & Conclusions PREPA s system in its planned 2015 configuration and generating fleet can accept up to 580 MW of renewable generation, split in 160 MW of wind turbine generation and 420 of Photovoltaic generation,with an acceptable levels of curtailment (2.26%.) This results are based on an assumed peak demand of 3,300 MW, lower values may affect this result. The renewable penetration in this case is 6.6 % of the sales. If net metering projects are allowed to exceed 64 MW, the actual system s limit to manage renewable projects would be reduced to penetration levels below 580 MW. The total PPOA renewable generation limit (580 MW) already includes the existing plants, AES Ilumina, Pattern, and Punta Lima (121 MW). When the payments for the renewable generation are included the cost of serving the load are higher than with the existing system ($ 23 million/yr.). Page 123

Summary of Results & Conclusions PREPA s system was found stable both during short term and long term dynamic stability assessments with renewable generation up to 884 MW. The renewable generation projects to comply with PREPA s Minimum Technical Requirements. PREPA should modify its MTR to require the renewable generation to contribute to frequency regulation from its storage even when the project is being dispatched at the PPOA contractual values. PREPA should review its secondary regulation requirements to maintain the larger reserve resulting of a) 50% of the renewable generation on line or b) 200 MW (current practices.) The under-frequency load shedding scheme is necessary to maintain the stability of the system under various events. Page 124

Summary of Results & Conclusions 12 % penetration can be achieved using storage to manage the energy that could not be delivered to the load to be released during the night peak. However given the high cost of the storage options available, for Puerto Rico, this option it is not considered economic at this time; $ 169 million / yr over the costs of supplying the system with conventional generation and the existing levels of renewable (Base Case). We note that this case has 2.32% of curtailment; if less curtailment is to be achieved the cost increase very rapidly Page 125

PROMOD Analysis Summary of Results & Conclusions Two new combined cycle plants (2 x 334 MW) that can ramp very fast and are flexible with the capability of cycling every day can accommodate 12% penetration. 2.39 % curtailment was reached, which is considered acceptable. However when the capital payments for the CCP are considered the case is more costly than the base case in $ 61 million/ yr. A total of 100 MW of Net Metering was included in Scenario II and III, which is the expected level of penetration for 2017. Increasing the total level of Net-Metering would reduce the total amount of PPOA renewable generation that can be integrated to PREPA s system. This combined cycle would require at least 5 years to commissioning for permitting, engineering and construction. In summary PREPA should be able to integrate into its system up to 580 MW of renewable generation with changes to its operating practices, provided that this generation complies 100% with PREPA s MTR. Page 126

PREPA Renewable Energy Resources Integration Study Discussion Restricted Siemens Industry, Inc. 2014 All rights reserved. Answers for infrastructure and cities.