Duke Energy Corporation (Holding Company) · NYSE:DUK
Duke Energy Corporation (Holding Company) — Duke Energy Indiana — Corporate Update (October 2015)
54 slides from Duke Energy Corporation (Holding Company)'s corporate update, Oct 16, 2015
Slide 1: 2015 Integrated Resource Plan
2015 Integrated Resource Plan Stakeholder Workshop #4 October 16, 2015 Plainfield, IN
Slide 2: Welcome
a. o. oe hey fe Welcome DUKE & ENERGY.
Slide 3: Welcome
Welcome Safety message Why are we here today? Objectives for stakeholder process Introduce the facilitator 3
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
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 4th of 4 stakeholder workshops prior to filing the IRP by November 1, 2015 5
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
Slide 7: Agenda and Meeting 3 Comments & Responses
Scott Park, Director IRP Analytics - Midwest Agenda and Meeting 3 Comments & Responses 7
Slide 8: Agenda
Agenda 08:30 Registration & Continental Breakfast 09:00 Welcome, Introductions & Agenda 09:15 Meeting 3 Comments & Responses 09:30 Scenario Review 10:00 Break 10:15 Portfolio Review 10:45 Scenario Modeling Results 11:45 Lunch 12:30 Sensitivity Modeling Results 01:00 Decision Making (Preferred Portfo
Slide 9: Meeting Comments and Response
Meeting 3 Comments and Response Topic We heard/observed… Response No; the release of the final rule happened too late in Clean Power Plan Will the final rule of the the IRP process to model it in time for submission of (Final Rule) Clean Power Plan be modeled? the IRP. See separate slide on the CPP.
Slide 10: Scenario Review
Scott Park, Director IRP Analytics - Midwest Scenario Review 10
Slide 11: Seven Scenarios
Seven Scenarios Core Scenarios 1. No Carbon Regulation 2. Carbon Tax 3. Clean Power Plan (Proposed Rule) Change of Outlook Scenarios 4. Delayed Carbon Regulation 5. Repealed Carbon Regulation Stakeholder-Inspired Scenarios 6. Increased Customer Choice 7. Climate Change 11
Slide 12: Core Scenarios
Core Scenarios No Carbon Regulation No carbon tax/price or regulation Moderate levels of environmental regulation No Renewable Energy Portfolio Standard (REPS) Carbon Tax Carbon tax $17/ton in 2020, rising to $57/ton Increased levels of environmental regulation 5% REPS Clean Power
Slide 13: Change of Outlook Scenarios
Change of Outlook Scenarios Delayed Carbon Regulation No Carbon Regulation scenario initially Change to Carbon Tax scenario for latter part Demonstrates impact of delayed carbon regulation Repealed Carbon Regulation Carbon Tax scenario initially Change to No Carbon Regulation scenario
Slide 14: Stakeholder-Inspired Scenarios
Stakeholder-Inspired Scenarios Increased Customer Choice Carbon Tax scenario basis Roof top solar serves additional 1% of load per year beginning 2020 Customers adopt higher levels of Energy Efficiency New utility-scale generation served by merchant generators, e.g., Dynegy or Calpine Cl
Slide 15: Final Clean Power Plan Rule
Final Clean Power Plan Rule The final rule of the Clean Power Plan was released in early August of this year. The time to read, understand and develop modeling, plus the absence of any specific SIP details precluded the final rule from being explicitly modeled in the 2015 IRP The proposed rule
Slide 16: Break
Break DUKE 6 & ENERGY.
Slide 17: Portfolio Review
Brian Bak, Lead Planning Analyst Portfolio Review 17
Slide 18: Cumulative Energy Efficiency % of Retail Sales
Cumulative Energy Efficiency % of Retail Sales Portfolios 1 & 4 Portfolios 2, 3, 5, 6, 9 12% 14% 10% 12% 10% 8% 8% 6% 6% 4% 4% 2% 2% 0% 0% Historical EE Bundle Rolloff New EE Bundles IVVC Historical EE Bundle Rolloff New EE Bundles IVVC Notes: 1.) Cumulative EE calculated by adding back both histori
Slide 19: Cumulative Energy Efficiency % of Retail Sales
Cumulative Energy Efficiency % of Retail Sales Portfolio 7 Portfolio 8 25% 20% 18% 20% 16% 14% 15% 12% 10% 10% 8% 6% 5% 4% 2% 0% 0% Historical EE Bundle Rolloff New EE Bundles IVVC Historical EE Bundle Rolloff New EE Bundles IVVC Notes: 1.) Cumulative EE calculated by adding back both historical EE
Slide 20: Nine Portfolios
Nine Portfolios 1. Optimized No Carbon Tax 2. Optimized Carbon Tax 3. Optimized Proposed Clean Power Plan 4. Portfolio 1 w/ CC’s 5. Portfolio 2 w/ CC’s 6. Portfolio 3 w/ CC’s 7. Stakeholder Distributed Generation 8. Stakeholder Green Utility 9. High Renewables 20
Slide 21: Portfolio Template
Portfolio Template ADDITIONS (MW) Total 2016-20 2021-25 2026-30 2031-35 CT CHP CC EE & IVVC Solar Wind Biomass RETIREMENTS Unit MW Load Growth (MW) Reserve Margin 21
Slide 22: Optimized No Carbon Tax Portfolio
Optimized No Carbon Tax Portfolio ADDITIONS (MW) Total 2016-20 2021-25 2026-30 2031-35 CT 832 208 208 208 208 CHP 44 29 15 CC EE & IVVC 244 / 3.1% 124 / 1.9% 105 / 3.2% 11 / 3.2% 4 / 3.1% Solar Wind Biomass RETIREMENTS Unit WR2-6 Oil CTs MW (834) (834) Load Growth (MW) 1,288 501 259 261 267 Reserve
Slide 23: Optimized Carbon Tax Portfolio
Optimized Carbon Tax Portfolio ADDITIONS (MW) Total 2016-20 2021-25 2026-30 2031-35 CT 624 416 208 CHP 15 15 CC 448 448 EE & IVVC 276 / 3.6% 124 / 1.9% 106 / 3.3% 28 / 3.6% 18 / 3.6% Solar 270 10 140 120 Wind 450 150 250 50 Biomass 14 2 6 6 RETIREMENTS Unit WR2-6 Oil CTs Gal2,4 Gib5 MW (1,424) (1,11
Slide 24: Optimized Clean Power Plan Portfolio
Optimized Clean Power Plan Portfolio ADDITIONS (MW) Total 2016-20 2021-25 2026-30 2031-35 CT 624 208 208 208 CHP 44 29 15 CC 448 448 EE & IVVC 276 / 3.6% 124 / 1.9% 106 / 3.3% 28 / 3.6% 18 / 3.6% Solar 270 20 130 120 Wind 450 300 100 50 Biomass 14 2 6 6 RETIREMENTS Unit WR2-6 Oil CTs Gal2,4 Gib5 MW
Slide 25: Portfolio 1 w/ CC's Portfolio
Portfolio 1 w/ CC’s Portfolio ADDITIONS (MW) Total 2016-20 2021-25 2026-30 2031-35 CT 416 208 208 CHP 44 29 15 CC 448 448 EE & IVVC 244 / 3.1% 124 / 1.9% 105 / 3.2% 11 / 3.2% 4 / 3.1% Solar Wind Biomass RETIREMENTS Unit WR2-6 Oil CTs MW (834) (834) Load Growth (MW) 1,288 501 259 261 267 Reserve Marg
Slide 26: Portfolio 2 w/ CC's Portfolio
Portfolio 2 w/ CC’s Portfolio ADDITIONS (MW) Total 2016-20 2021-25 2026-30 2031-35 CT 208 208 CHP 15 15 CC 896 448 448 EE & IVVC 276 / 3.6% 124 / 1.9% 106 / 3.3% 28 / 3.6% 18 / 3.6% Solar 270 30 120 120 Wind 450 150 250 50 Biomass 14 2 6 6 RETIREMENTS Unit WR2-6 Oil CTs Gal2,4 Gib5 MW (1,424) (1,114
Slide 27: Portfolio 3 w/ CC's Portfolio
Portfolio 3 w/ CC’s Portfolio ADDITIONS (MW) Total 2016-20 2021-25 2026-30 2031-35 CT 208 208 CHP 44 29 15 CC 896 896 EE & IVVC 276 / 3.6% 124 / 1.9% 106 / 3.3% 28 / 3.6% 18 / 3.6% Solar 270 30 120 120 Wind 450 300 100 50 Biomass 14 2 6 6 RETIREMENTS Unit WR2-6 Oil CTs Gal2,4 Gib5 MW (1,424) (1,424)
Slide 28: Stakeholder Distributed Gen - Target vs Model
Stakeholder Distributed Gen - Target vs Model 2025 2035 Energy Mix (%) Target Model Target Model Market Purchases 11% 9% 8% 13% Coal 36% 42% 19% 16% Hydro 1% 1% 1% 1% CC 8% 12% 9% 17% CT 1% 0% 1% 0% EE 11% 5% 16% 8% Solar 7% 7% 10% 10% Wind 10% 10% 13% 13% CHP 9% 8% 12% 11% Nuclear 0% 0% 3% 3% Batte
Slide 29: Stakeholder Distributed Generation Portfolio
Stakeholder Distributed Generation Portfolio ADDITIONS (MW) Total 2016-20 2021-25 2026-30 2031-35 CT 832 208 624 CHP 667 160 290 15 203 CC 1,344 896 448 EE & IVVC 725 / 8.8% 171 / 2.5% 239 / 5.7% 134 / 7.1% 181 / 8.8% Nuclear 140 140 Battery 370 180 90 100 Solar 2,480 670 970 420 420 Wind 2,050 450
Slide 30: Stakeholder Green Utility - Target vs Model
Stakeholder Green Utility - Target vs Model 2025 2035 Energy Mix (%) Target Model Target Model Market Purchases 16% 16% 13% 19% Coal 50% 58% 38% 36% Hydro 1% 1% 1% 1% CC 18% 13% 19% 20% CT 3% 0% 6% 0% EE 5% 6% 8% 8% Solar 2% 2% 4% 4% Wind 3% 3% 6% 6% CHP 2% 2% 5% 5% Nuclear 0% 0% 0% 0% Battery/Fuel
Slide 31: Stakeholder Green Utility Portfolio
Stakeholder Green Utility Portfolio ADDITIONS (MW) Total 2016-20 2021-25 2026-30 2031-35 CT 832 208 624 CHP 261 29 73 73 87 CC 1,344 896 448 EE & IVVC 635 / 7.8% 171 / 2.5% 209 / 5.3% 134 / 6.7% 121 / 7.8% Solar 930 40 380 300 210 Wind 800 250 300 250 Biomass 14 4 4 6 RETIREMENTS Unit WR2-6 Oil CTs
Slide 32: High Renewables Portfolio
High Renewables Portfolio ADDITIONS (MW) Total 2016-20 2021-25 2026-30 2031-35 CT 624 416 208 CHP 29 15 15 CC 448 448 EE & IVVC 276 / 3.6% 124 / 1.9% 106 / 3.3% 28 / 3.6% 18 / 3.6% Solar 1,010 20 130 260 600 Wind 2,300 300 500 1,500 Biomass 14 2 8 4 RETIREMENTS Unit WR2-6 Oil CTs Gal2,4 Gib5 MW (1,4
Slide 33: Scenario Modeling Results
Scott Park, Director IRP Analytics – Midwest Scenario Modeling Results 33
Slide 34: Modeling Overview
Modeling Overview A robust scenario analysis was conducted in order to develop a variety of portfolios as well as test the respective performance of each across a range of assumptions The probabilities of the presence as well as the timing of CO2 regulation were varied to further test the flexib
Slide 35: Scenario Results (PVRR in MM$)
Scenario Results (PVRR in MM$) PORTFOLIOS No CO2 Opt CO2 Opt w/ CPP Opt w/ Stakeholder Stakeholder High No CO2 Opt CO2 Opt CPP Opt w/ CC CC CC Dist Gen Green Utility Renewables No CO2 Tax 20,297 20,655 20,891 20,379 20,677 20,931 27,465 22,623 21,219 CO2 Tax 27,549 27,186 27,209 27,617 27,243 27,334
Slide 36: Probability Weighted Scenario Results
Probability Weighted Scenario Results (PVRR in MM$) SCENARIO PROBABILITIES PORTFOLIOS No CO2 Stakeholder No CO2 Delayed Repealed No CO2 CO2 Opt CPP Opt Stakeholder High CO2 Tax CO2 Opt CPP Opt Opt w/ Green Tax CO2 Reg CO2 Reg Opt w/ CC w/ CC Dist Gen Renewables CC Utility 25% 25% 25% 25% 23,856 23,8
Slide 37: Scenario Results (CO2 Emissions)
Scenario Results (CO2 Emissions) (Reduction from 2016 – 2035) SCENARIO PROBABILITIES PORTFOLIOS No CO2 Stakeholder No CO2 Delayed Repealed No CO2 CO2 Opt CPP Opt Stakeholder High CO2 Tax CO2 Opt CPP Opt Opt w/ Green Tax CO2 Reg CO2 Reg Opt w/ CC w/ CC Dist Gen Renewables CC Utility 25% 25% 25% 25% 6
Slide 38: Scenario Results (Market Purchases)
Scenario Results (Market Purchases) SCENARIO PROBABILITIES PORTFOLIOS No CO2 Stakeholder No CO2 Delayed Repealed No CO2 CO2 Opt CPP Opt Stakeholder High CO2 Tax CO2 Opt CPP Opt Opt w/ Green Tax CO2 Reg CO2 Reg Opt w/ CC w/ CC Dist Gen Renewables CC Utility 25% 25% 25% 25% 11.4% 11.9% 11.2% 9.6% 10.1
Slide 39: Commentary on Scenario Analysis
Commentary on Scenario Analysis Seven scenarios is a significant increase in the number of scenarios compared to previous IRP’s Improved insight on a portfolio’s robustness Overall Observations Optimized portfolios tended to be the lower cost portfolios Portfolios optimized to comply with some
Slide 40: Lunch
Lunch DUKE “ & ENERGY.
Slide 41: Sensitivity Modeling Results
Brian Bak, Lead Planning Analyst Sensitivity Modeling Results 41
Slide 42: Sensitivity Analysis
Sensitivity Analysis Where scenario analysis evaluates portfolios at a more macro level, sensitivity analysis was also conducted to further evaluate each portfolio to changes in a number of key variables Scenarios are beneficial since they provide a view of the world where the variables are mode
Slide 43: Natural Gas Price Sensitivity (PVRR Change)
Natural Gas Price Sensitivity (PVRR Change) Natural gas is becoming an increasingly important fuel for electric generation in the mid-west The natural gas price sensitivity was conducted at +/-30% No Carbon Tax No CO2 Opt CO2 Opt w/ CPP Opt w/ Stakeholder Stakeholder High No CO2 Opt CO2 Opt CPP
Slide 44: Market Prices Sensitivity (PVRR Change)
Market Prices Sensitivity (PVRR Change) Participation in MISO increase the market interaction with respect to coal, gas and power prices The market price sensitivity was conducted at +/-30% No Carbon Tax No CO2 Opt CO2 Opt w/ CPP Opt w/ Stakeholder Stakeholder High No CO2 Opt CO2 Opt CPP Opt Sce
Slide 45: Increased CHP Sensitivity
Increased CHP Sensitivity The number of generic CHP projects that could be selected was increased No CO2 Opt CO2 Opt w/ CPP Opt w/ High No Carbon Tax No CO2 Opt CO2 Opt CPP Opt w/ CC CC CC Renewables Base Case (MW) 44 29 44 44 29 44 29 Increased CHP (MW) 87 87 87 87 87 87 87 No CO2 Opt CO2 Opt w/
Slide 46: Higher Carbon Tax Sensitivity
Higher Carbon Tax Sensitivity In addition to the CO2 Tax and Proposed CPP scenarios, a sensitivity was conducted to measure the portfolio’s responsiveness to a higher CO2 Tax No CO2 Opt CO2 Opt w/ CPP Opt w/ Stakeholder Stakeholder High Carbon Tax Scenario No CO2 Opt CO2 Opt CPP Opt w/ CC CC CC Di
Slide 47: EE Cost Effectiveness Sensitivity
EE Cost Effectiveness Sensitivity The cost effectiveness (cost/kWh) for Energy Efficiency was varied +/-20% No CO2 Opt CO2 Opt w/ CPP Opt w/ High No Carbon Tax No CO2 Opt CO2 Opt CPP Opt w/ CC CC CC Renewables MWh 26% 27% 27% 26% 27% 22% 16% Lower EE $/MWh PVRR -0.6% -0.2% -0.9% -0.5% 0.0% -0.6% -
Slide 48: Commentary on Sensitivity Analysis
Commentary on Sensitivity Analysis Portfolios with balance between CC and coal generation are better able to respond to variation in gas prices Portfolios with higher levels of renewables have higher fixed costs and costs overall, but are better able to withstand changes in variable cost factors
Slide 49: Decision Making
Scott Park, Director IRP Analytics - Midwest Decision Making 49
Slide 50: Portfolio Selection
Portfolio Selection The Optimized CO2 Tax Portfolio w/ CC is the preferred portfolio for the DEI’s 2015 IRP Cost competitive relative to other portfolios across the range of scenario probabilities Below average levels of market purchases Relatively favorable response to changing gas prices
Slide 51: Lessons Learned
Lessons Learned DUKE & ENERGY.
Slide 52: Lessons Learned Exercise
Lessons Learned Exercise Group exercise to discuss improvement opportunities for each of the major topics in the IRP stakeholder process Each table is assigned a topic and can pick one other Each person at a table writes down What they thought went well & what they would like to improve (and h
Slide 53: Closing Comments, Stakeholder Comments
Marty Rozelle, President, Rozelle Group Closing Comments, Stakeholder Comments 53
Slide 54: Next Steps
Next Steps Please complete comment cards or send by October 23rd to Marty at: RGL97marty@rozellegroup.com Meeting summary and other materials will be posted on website by November 2nd (http://www.duke-energy.com/indiana/in-irp-2015.asp) 54
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