Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — ERCOT GCPA Spring Conference 2017
9 slides from Nrg Energy's conference presentation, Apr 19, 2017
Slide 1: ERCOT GCPA Spring Conference
ERCOT GCPA Spring Conference Mauricio Gutierrez President & CEO – NRG Energy April 19, 2017
Slide 2: NRG in ERCOT – A Balanced Portfolio
NRG in ERCOT – A Balanced Portfolio Largest Retailer ~2.1 Million Mass Retail Customers Served Integrated Reliant – Leading Retail Brand Platform 35 TWh Mass Load Served Gen-Retail 18 TWh C&I Load Served Second Largest Generator ~10,100 MW total thermal generation 700 MW wind genera
Slide 3: Texas Energy Policy
Texas Energy Policy Vast resources Embrace competition Transmission focused Thriving economy Diverse natural resources A pro-business government Policy to bring vast Strong population and (gas, oil, wind, solar) and regulatory environment resources to market electric demand growth Cumulative Demand
Slide 4: Current Market Concerns
Current Market Concerns • Impact of zero variable cost resources in energy-only market $ Price • Energy prices are at an all-time low; depressed for multiple years 1 Impact • Annual Significantof zero variable growth driven cost resources byhastax in incentives Formation • Increasing•reliance transm
Slide 5: Price Formation
1 Price Formation Market prices do not incentivize new …delaying new projects and putting existing dispatchable generation, now and haven’t for the generation at risk past five years… Original Current Spark spread required for new build Revenue gap Prices insufficient to attract or maintain dispatch
Slide 6: Price Formation – Additional Concerns
1 Price Formation – Additional Concerns ORDC has not provided the right price …resulting in significant out-of-market actions signals… by ERCOT 2016 5x Increase $0.45/MWh average adder 2015 Improvements in price formation are needed 5 1 Source: ERCOT 2 Source: ERCOT; Each count represents one resour
Slide 7: Renewables
2 Renewables Wind is growing rapidly and will make up …increasing significantly the frequency of ~30% of total capacity by 2020… negative prices Historic Forward 3x Increase Abundant wind is causing substantial disruption to marginal cost price formation…and more is coming 6 1 Source: ERCOT December
Slide 8: Transmission
3 Transmission • Electric policy has been centered around a robust transmission T&D up system to bring ERCOT’s vast 52% resources to the market • Transmission costs are socialized across consumers Power down • Transmission and distribution 66% charges to residential consumers up over 50% since 2005
Slide 9: Recommendations
Recommendations $ Price Formation Renewables Transmission 1. Improve ORDC price signal and implement locational component 2. Include marginal losses in ERCOT prices 3. Minimize the use of out-of-market actions 4. Address mitigation rules for RMR units 5. Balance transmission investment with market-b