Duke Energy Corporation (Holding Company) · NYSE:DUK

Duke Energy Corporation (Holding Company) — Duke Energy Indiana — Investor Presentation (June 2015)

55 slides from Duke Energy Corporation (Holding Company)'s investor presentation, Jun 4, 2015

  1. Slide 1: 2015 Integrated Resource Plan Stakeholder Workshop #2

    2015 Integrated Resource Plan Stakeholder Workshop #2 June 4, 2015 Plainfield, IN

  2. Slide 2: Welcome

    Welcome DUKE 2 & ENERGY.

  3. Slide 3: Welcome

    Welcome  Safety message  Why are we here today?  Objectives for stakeholder process  Introduce the facilitator 3

  4. Slide 4: The Facilitator

    The Facilitator  Duke Energy Indiana hired Dr. Marty Rozelle of The Rozelle Group and her colleagues to:  Help us develop the IRP stakeholder engagement process  Facilitate and document stakeholder workshops 4

  5. Slide 5: Why are we here today?

    Why are we here today?  Duke Energy Indiana developing 2015 Integrated Resource Plan (IRP)  Proactively complying with proposed Commission IRP rule  Today is the 2nd of 4 stakeholder workshops prior to filing the IRP by November 1, 2015 5

  6. Slide 6: Objectives for Stakeholder Process

    Objectives for Stakeholder Process  Listen: Understand concerns and objectives  Inform: Increase stakeholders’ understanding of the IRP process, key assumptions, and challenges we face  Consider: Provide a forum for productive stakeholder feedback at key points in the IRP process to inform Duke E

  7. Slide 7: Agenda

    Agenda 08:30 Registration & Continental Breakfast 09:00 Welcome, Introductions, Agenda 09:20 Meeting 1 Comments and Response 09:40 Updates Since Meeting 1 10:00 Break 10:15 Scenario Discussion 11:30 Lunch 12:15 Resource Discussion 01:30 Portfolio Development Exercise 03:00 Closing Comments 7

  8. Slide 8: Meeting 1 Comments and Response

    Scott Park, Director IRP Analytics - Midwest Meeting 1 Comments and Response 8

  9. Slide 9: Meeting 1 Comments and Response

    Meeting 1 Comments and Response Topic We heard/observed… Response Individual guest accounts were created Wi-Fi Overloaded Wi-Fi hot spot to access vendor network More information on environmental Scenario specifics will be discussed Scenarios scenarios in June 4th meeting Resources including DSM/EE

  10. Slide 10: Updates Since Meeting 1

    Scott Park, Director IRP Analytics - Midwest Updates Since Meeting 1 10

  11. Slide 11: Updates Since Last Meeting

    Updates Since Last Meeting Deregulation call report out  On May 14th, Duke hosted a call to further discuss with stakeholders ideas about deregulation and customer choice.  Themes from that call were used to develop a Customer Choice Scenario  Will be discussed in more detail this Scenario sectio

  12. Slide 12: Break

    Break DUKE 2 & ENERGY.

  13. Slide 13: Scenarios Part 1

    Jim Hobbs, Lead Engineer Scenarios Part 1 13

  14. Slide 14: No CO2 Regulation

    No CO2 Regulation  Scenario Narrative $/mmBtu No CO2 Scenario $/MWh  No carbon tax/price or regulation $12 $100  Moderate environmental levels of regulation $90 $10  No renewable energy portfolio standard $80 $70 $8 $60 $6 $50  Average annual load growth rate: 0.9% $40 $4 $30 $20 $2 $10 $0 $0 2

  15. Slide 15: CO2 Regulation by Price

    CO2 Regulation by Price  Scenario Narrative $/mmBtu Carbon Tax Scenario $/MWh  Carbon tax: $17/ton in 2020, rising to $50/ton $12 $100  Increased environmental levels of regulation $90 $10  5% renewable energy portfolio standard $80 $70 $8 $60 $6 $50  Average annual load growth rate: 0.8% $40 $

  16. Slide 16: Clean Power Plan (CPP)

    Clean Power Plan (CPP)  Scenario Narrative $/mmBtu CPP Scenario $/MWh  Carbon reduced 20% $12 $100  Increased environmental levels of regulation $90 $10  5% renewable energy portfolio standard $80 $70 $8 $60 $6 $50  Average annual load growth rate: 0.8% $40 $4 $30 $20 $2 $10 $0 $0 2015 2017 201

  17. Slide 17: Scenarios Part 2

    Brian Bak, Lead Planning Analyst Scenarios Part 2 17

  18. Slide 18: No CO2 Regulation followed by CO2 Regulation

    No CO2 Regulation followed by CO2 Regulation  Scenario description: $/mmBtu No CO2 → CO2 Scenario $/MWh  Follows No CO2 scenario pricing, load growth $12 $100 and regulatory policy for 10 years followed by $90 a gradual shift to CO2 scenario pricing, load $10 $80 and regulatory policy for remainde

  19. Slide 19: CO2 Regulation followed by No CO2 Regulation

    CO2 Regulation followed by No CO2 Regulation  Scenario description: $/mmBtu CO2 → No CO2 Scenario $/MWh  Follows CO2 scenario pricing, load growth and $12 $100 regulatory policy for 10 years followed by a $90 sudden shift to No CO2 scenario pricing, load $10 $80 and regulatory policy for remainder

  20. Slide 20: Extended Market Pricing

    Extended Market Pricing  Scenario description: $/mmBtu Extended Market Scenario $/MWh  Maintains market fuel and power prices for full $12 $100 planning period – no fundamental forecast data $90 $10  Typical transition from Market to Fundamental $80 $70  Market pricing for 3 years $8 $60  Trans

  21. Slide 21: Scenarios Part 3

    Scott Park, Director IRP Analytics - Midwest Scenarios Part 3 21

  22. Slide 22: Increased Customer Choice

    Increased Customer Choice  Increased roof top solar is installed and a growing Customer Choice Scenario number of customers make this decision. $/mmBtu $12 $/MWh $100  Every year, starting on 2020, an additional 1% $90 of load is served with solar at the average cost $10 $80 of rooftop solar for r

  23. Slide 23: Climate Change Scenario

    Climate Change Scenario  The Climate Change Scenario is Climate Change Scenario characterized by higher summer $/mmBtu $/MWh $12 $100 temperatures that drive increased electricity $90 consumption. Increased fuel and power $10 $80 prices as well as a carbon tax of $17/MWh $70 starting in 2020 benefi

  24. Slide 24: One Year Stress Scenario: Polar Vortex

    One Year Stress Scenario: Polar Vortex What is a One Year Stress Scenario? Polar Vortex Scenario $/mmBtu $/MWh These scenarios were developed to stress the $12 $100 various portfolios to extreme events. While not $90 frequent enough to warrant a long term $10 $80 scenario, we expect them to be insig

  25. Slide 25: One Year Stress Scenario: Hot Summer

    One Year Stress Scenario: Hot Summer (Low Water and High Load) Description of Hot Summer Stress Scenario Hot Summer Scenario $/mmBtu $/MWh This scenario will feature higher summer $12 $100 temperatures which drive increased demand for $90 electricity. Due to lower river levels, riverside $10 $80 gen

  26. Slide 26: Lunch

    Lunch DUKE * & ENERGY.

  27. Slide 27: Resources Part 1

    Jim Hobbs, Lead Engineer Resources Part 1 27

  28. Slide 28: Simple Cycle Combustion Turbines (CTs)

    Simple Cycle Combustion Turbines (CTs) Resource Description Advantages  Natural Gas primary, Fuel Oil backup  Low capital cost  210 MW Nameplate  Fast install vs. other conventional options  Heat Rate 10 MMBtu/MWh  Fuel abundant/cheap for now  Capital $31/MWh @ 30% Capacity Factor  Fuel/O&M

  29. Slide 29: Combined Cycle Combustion Turbines (CCs)

    Combined Cycle Combustion Turbines (CCs) Resource Description Advantages  Natural Gas primary, Fuel Oil backup  High efficiency  2 CTs with steam generator (2 on 1 or 2x1)  Versatile - baseload or intermediate service  620 MW Nameplate  Fuel abundant/cheap for now  Heat Rate 7 MMBtu/MWh  Cap

  30. Slide 30: Nuclear

    Nuclear Resource Description Advantages  Uranium fuel  Low variable cost  1117 MW Nameplate  Reliable baseload service  Capital $72/MWh @ 90% Capacity Factor  Fuel supply reliability  Fuel/O&M $24/MWh @ 90% Cap Factor  No air emissions  CO2 emissions rate 0 #/MWh Disadvantages  High constr

  31. Slide 31: Screened Out Resources

    Screened Out Resources  Geothermal – No local resource  Advanced Storage – Expensive; Duke R&D efforts continuing.  Battery Innovation Center near Crane Naval Surface Warfare Center, $1M funding  Compressed Air Storage – Expensive, limited experience, high capital, scarce sites  Small Modular R

  32. Slide 32: Battery Storage R&D

    Battery Storage R&D Project Name Location Technology Capacity Interconnection Notrees Ector and Winkler counties, TX Xtreme Power advanced lead acid 36 MW/24 MWh 153 MW Wind Project Rankin Gaston County, NC FIAMM sodium nickel 402 kW/282 kWh 1 MW Solar Project Marshall Catawba County, NC Kokam super

  33. Slide 33: Combined Heat and Power (CHP)

    Combined Heat and Power (CHP) 33

  34. Slide 34: CHP Advantages and Challenges

    CHP Advantages and Challenges  Advantages  High combined efficiency  Low combined carbon emissions  Smaller scale could enable better matching to reserve margin requirement  Economic development incentive  Challenges  Unique, site and customer specific; must have steady steam load  Customer

  35. Slide 35: CHP Prospects

    CHP Prospects  Up to 500 MW Technical Potential with suitable customers  Universities  Bio-refineries  Pharmaceuticals  Other Industrials  2 customer installations now operating  Purdue (39 MW-coal and gas)  Tate and Lyle (7.4 MW-coal)  CHP may be an economic alternative for meeting small b

  36. Slide 36: Resources Part 2

    Brian Bak, Lead Planning Analyst Resources Part 2 36

  37. Slide 37: Duke Energy Indiana renewable resources

    Duke Energy Indiana renewable resources  Benton County Wind Farm  100.5 MW  20-year power purchase agreement (PPA) signed in 2006  Yields approximately 300,000 MWh/year  Markland Hydro Facility  51.3 MW run-of-river facility owned by Duke Energy Indiana  Also yields approximately 300,000 MWh/

  38. Slide 38: Biomass – Landfill Gas

    Biomass – Landfill Gas Resource Description Advantages  Fuel source: Landfill methane emissions  Low fuel cost  Internal Combustion Engine  Baseload power  5 MW Nameplate  Dispatchable  Capital $65/MWh @ 90% Capacity Factor  Reduces flaring/direct emission of landfill  Fuel/O&M: $20/MWh @ 9

  39. Slide 39: Typical Landfill Gas Power Plant

    Biomass – Landfill Gas Typical Landfill Gas Power Plant 39

  40. Slide 40: Wind

    Wind Resource Description Advantages  20-200 MW Nameplate  Zero “fuel” cost  Capital: $56/MWh @ 35% Capacity Factor  Zero air emissions  O&M: $13/MWh @ 35% Capacity Factor  Renewable resource  Contribution-to-Peak (MISO Capacity Credit)  14.7% average Disadvantages  Site specific: 1.4% - 25

  41. Slide 41: Wind Resource Distribution

    Wind Resource Distribution Benton County 41

  42. Slide 42: Solar

    Solar Resource Description Advantages  5-25 MW Nameplate  Zero “fuel” cost  Capital: 79$/MWh @ 21% Capacity Factor  Zero air emissions  O&M: $7/MWh @ 21% Capacity Factor  Renewable resource  Contribution-to-Peak / Capacity Value  MISO Capacity Auction: based on actual metered historical outp

  43. Slide 43: Solar Resource Distribution

    Solar Resource Distribution Geres Energy LLC Pastime Farm LLC McDonald Solar LLC Sullivan Solar LLC 43

  44. Slide 44: Solar: Contribution to Peak Load – Summer & Winter

    Solar: Contribution to Peak Load – Summer & Winter 44

  45. Slide 45: U.S. Photovoltaic System Pricing Trends

    U.S. Photovoltaic System Pricing Trends • All methodologies show a downward trend in PV system pricing • Reported pricing and modeled benchmarks have historically had similar results, however have recently diverged Source: US DOE SunShot Initiative; Sept. 2014 (National Renewable Energy Laboratory a

  46. Slide 46: Resources Part 3

    Scott Park, Director IRP Analytics - Midwest Resources Part 3 46

  47. Slide 47: Demand Response (DR)

    Demand Response (DR) Resource Description Advantages  DR is a resource where the company pays  Opportunity for customers to lower bill in customers an option payment to be able to exchange for being interrupted curtail a customers load during periods of  Useful in clipping peak high demand. Disad

  48. Slide 48: Energy Efficiency (EE)

    Energy Efficiency (EE) Resource Description  EE is not a single resource but rather a collection of over five-hundred different measures such as lighting, appliances or motors  Typically,  EE is included in the load forecast implicitly or as a load reduction  EE levels are frequently described i

  49. Slide 49: Energy Efficiency (EE)

    Energy Efficiency (EE) Resource Description  EE can be incented by the utility, but requires an action by the customer  Participation is less than what purely economic behavior would suggest 49

  50. Slide 50: Energy Efficiency (EE)

    Energy Efficiency (EE)  Unlike a traditional generation resource such as a gas plant or windmill, EE does not EE supply curves by adoption rates have a single cost for each MWh, but rather $250 has a supply curve for increasing amounts of energy $200 $150  Additionally, the supply curve changes as

  51. Slide 51: Energy Efficiency (EE)

    Energy Efficiency (EE)  In order to model utility sponsored EE as a resource, this portion of EE needs to be removed from the load forecast and put into bundles for economic selection by the resource planning model. 51

  52. Slide 52: Portfolio Development Exercise

    Scott Park, Director IRP Analytics - Midwest Portfolio Development Exercise 52

  53. Slide 53: Portfolio Development Exercise

    Portfolio Development Exercise Purpose  Give stakeholders an opportunity to describe their respective preferred energy mix of DEI’s future portfolio Things to remember  Consider other stakeholders (800,000 customers but only 1 system)  System flexibility and fuel diversity  Tradeoffs between dif

  54. Slide 54: Closing Comments, Stakeholder Comments

    Marty Rozelle, President, Rozelle Group Closing Comments, Stakeholder Comments 54

  55. Slide 55: Next Steps

    Next Steps  Please complete comment cards or send by June 11 to Marty at: RGL97marty@rozellegroup.com  Meeting summary and other materials will be posted on website by June 18 (http://www.duke-energy.com/indiana/in-irp-2015.asp)  Next workshop tentatively scheduled for the first week in August 55

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