Duke Energy Corporation (Holding Company) · NYSE:DUK
Duke Energy Corporation (Holding Company) — Corporate Update (October 2013)
40 slides from Duke Energy Corporation (Holding Company)'s corporate update, Oct 9, 2013
Slide 1: 2013 Integrated Resource Plan Stakeholder Workshop #5
2013 Integrated Resource Plan Stakeholder Workshop #5 October 9, 2013 Plainfield, IN
Slide 2: Welcome
Doug Esamann, State President- Indiana, Duke Energy Welcome 2
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 2013 Integrated Resource Plan (IRP) Proactively complying with proposed Commission IRP rule Today is the fifth stakeholder workshops 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
Slide 7: Agenda
Agenda 9:00 Registration & Continental Breakfast 9:30 Welcome from Doug Esamann 9:40 Agenda Review and Introductions 10:00 Workshops 1 – 4 Review & Stakeholder Feedback/Response Discussion 10:40 Scenarios & Portfolios 11:00 Modeling Results 11:45 Lunch 12:30 Decision Making & Risk Management 1:15 IR
Slide 8: Review of Workshops 1 - 4
Marty Rozelle, President, The Rozelle Group Review of Workshops 1 - 4 8
Slide 9: Review of Workshops 1 - 4
Review of Workshops 1 - 4 Workshop 1 Background on IRP process Discussion of Driving Forces in order to develop Scenarios Workshop 2 Discussion of Energy Efficiency & Renewable Energy Scenario development exercise Workshop 3 Discussion of Load Forecasting & Market Fundamentals Modeling a
Slide 10: Stakeholder Feedback & Duke Responses
Scott Park, Director IRP & Analytics- Midwest Stakeholder Feedback & Duke Responses 10
Slide 11: Stakeholder Feedback & Responses
Stakeholder Feedback & Responses Issue Detail Not Used- Why Not? Influenced Decision How? Directly Accepted- How? Include a wide range of scenarios Range of scenarios, coupled with sensitivity Range of Scenarios reflecting major changes from analyses, reflects a wide range of future ‘business as usu
Slide 12: Stakeholder Feedback & Responses
Stakeholder Feedback & Responses Issue Detail Not Used- Why Not? Influenced Decision How? Directly Accepted- How? The retirement of units is considered as part of the normal IRP Reduce DEI dependency on coal process. Coal retirements range from 948 MW to 5365 MW in generation the three portfolios. R
Slide 13: Scenarios & Portfolios
Jim Hobbs, Senior Portfolio Analyst Scenarios & Portfolios 13
Slide 14: Scenarios
Scenarios Low Regulation Scenario Carbon emissions price: $0/ton Lower environmental requirements Higher fuel prices Reference Scenario Carbon emissions price: $17/ton in 2020; $50/ton in 2033 Internal assumptions for environmental requirements Environmental Focus Scenario Carbon emissio
Slide 15: Portfolios
Portfolios Traditional Portfolio Optimized for the Low Regulation Scenario Blended Approach Portfolio Optimized for the Reference Scenario Coal Retires Portfolio Optimized for the Environmental Focus Scenario 15
Slide 16: Duke Energy Indiana Resource Definitions
Duke Energy Indiana Resource Definitions STATION NAME UNIT ABBREV MW WR 2-5 350 Wabash River WR 6 318 Cayuga CAY 995 Gallagher GAL 280 GIB 1-4 2,512 Gibson GIB 5 310 Connersville Connersville 166 Miami-Wabash Mi-Wa Combined Cycle CC 340* Combust Turbine CT 200 Nuclear Nuclear 280** *represents half
Slide 17: Summary of Portfolios
Summary of Portfolios TRADITIONAL PORTFOLIO (Optimized for Low Regulation Scenario) 2014-2018 2019-2023 2024-2028 2029-2033 WR 2-6 Coal Gall 2,4 Coal WR 6 NG Conversion Retirements Connersville 1-2 CT Mi-Wa 1-3, 5 & 6 CT WR 6 NG Conversion New CT (600 MW) New CT (400 MW) New CC (680 MW) Additions Ne
Slide 18: Capacity Changes Over Time by Portfolio
Capacity Changes Over Time by Portfolio 18
Slide 19: Energy Changes Over Time by Portfolio
Energy Changes Over Time by Portfolio 19
Slide 20: Modeling Results
Jim Hobbs, Senior Portfolio Analyst Modeling Results 20
Slide 21: High Level Description of Modeling Results
High Level Description of Modeling Results Scenario Analysis SCENARIOS PVRR (MM$) ENVIRONMENTAL LOW REGULATION REFERENCE FOCUS Used to compare portfolios in P $38,014 $52,261 $56,889 different internally consistent futures O TRADITIONAL R T Calculate PVRR’s F O BLENDED APPROACH $38,258 $51,420 $
Slide 22: Portfolio Performance in Each Scenario
Portfolio Performance in Each Scenario SCENARIOS PVRR (MM$) ENVIRONMENTAL LOW REGULATION REFERENCE FOCUS P O TRADITIONAL $38,014 $52,261 $56,889 R T F O BLENDED APPROACH $38,258 $51,420 $55,273 L I O S COAL RETIRES $44,477 $51,990 $54,051 Note- the coloring highlights the lowest cost portfolio in a
Slide 23: CO2 Sensitivity
CO2 Sensitivity SCENARIOS Low Regulation Reference Environmental Focus High Senstivity $5/tn in 2025; $7/tn in 2033 $20/tn in 2020; $75/tn in 2033 $25/tn in 2020; $100/tn in 2033 ASSUMPTIONS Base Assumption $0/tn $17/tn in 2020; $50/tn in 2033 $20/tn in 2020; $75/tn in 2033 Low Sensitivity NA $5/tn
Slide 24: Load Growth Sensitivity
Load Growth Sensitivity SCENARIOS Low Regulation Reference Environmental Focus High Senstivity approx +9% of base case in 2033 (MW) approx +9% of base case in 2033 (MW) approx +9% of base case in 2033 (MW) ASSUMPTIONS Base Assumption 0.95% CAGR (after EE) 0.95% CAGR (after EE) 0.95% CAGR (after EE)
Slide 25: Capital Costs Sensitivity
Capital Costs Sensitivity SCENARIOS Low Regulation Reference Environmental Focus CC, CT & Nuclear +30%; Controls +20%; CC, CT & Nuclear +30%; Controls +20%; CC, CT & Nuclear +30%; Controls +20%; High Senstivity ASSUMPTIONS Base Assumption Solar & Wind- same as ref case Reference Scenario Assumptions
Slide 26: Gas Price Sensitivity
Gas Price Sensitivity SCENARIOS Low Regulation Reference Environmental Focus High Senstivity $6-15/mmBtu $5-14/mmBtu $6-13/mmBtu ASSUMPTIONS Base Assumption $5-13/mmBtu $5-12/mmBtu $5-11/mmBtu Low Sensitivity $4-10 /mmBtu $4-10/mmBtu $4-9/mmBtu 4% 3% 2% 1% RESULTS 0% -1% % Change in PVRR -2% (compar
Slide 27: Coal Price Sensitivity
Coal Price Sensitivity SCENARIOS Low Regulation Reference Environmental Focus High Senstivity $3-6/mmBtu $4-6/mmBtu $4-5/mmBtu ASSUMPTIONS Base Assumption $3-5/mmBtu $3-5/mmBtu $3-4/mmBtu Low Sensitivity $2-4/mmBtu $2-4/mmBtu $2-3/mmBtu 15% 10% 5% RESULTS 0% % Change in PVRR (compared to base assump
Slide 28: Renewable Energy Sensitivity
Renewable Energy Sensitivity SCENARIOS Low Regulation Reference Environmental Focus High Senstivity Additional 2% of Total Sales Additional 2% of Total Sales Additional 2% of Total Sales ASSUMPTIONS Base Assumption 4% of Total Sales 14% of Total Sales 15% of Total Sales Low Sensitivity Reduction of
Slide 29: Decision Making & Risk Management
Scott Park, Director IRP & Analytics- Midwest Decision Making & Risk Management 29
Slide 30: Decision Making
Decision Making Modeling the various combinations of portfolios, scenarios and sensitivities requires over 100 model runs and creates a tremendous amount of data The objective of the IRP is to produce a robust portfolio (resource plan) that meets the load obligation while minimizing the present
Slide 31: Framework for Reviewing Results
Framework for Reviewing Results Scenarios were used to create a set of internally consistent futures that cover a greater range of potential futures Likelihood of each scenario is not known As a result, we want to see how each portfolio performs under a range of scenario probabilities Given
Slide 32: Model Results and Decision Making Tools
Model Results and Decision Making Tools SCENARIOS PVRR (MM$) ENVIRONMENTAL LOW REGULATION REFERENCE FOCUS P O TRADITIONAL $38,014 $52,261 $56,889 R T F O BLENDED APPROACH $38,258 $51,420 $55,273 L I O S COAL RETIRES $44,477 $51,990 $54,051 32
Slide 33: When is a Portfolio the Least Cost?
When is a Portfolio the Least Cost? LEAST COST PORTFOLIO LOW REG SCENARIO PROBABILITY 100% T 90% T T 80% T BA BA 70% BA BA BA BA 60% BA BA BA BA BA 50% BA BA BA BA BA BA 40% BA BA BA BA BA BA BA 30% BA BA BA BA BA BA BA BA 20% BA BA BA BA BA BA BA BA BA 10% BA BA BA BA BA BA BA CR CR CR 0% BA BA BA
Slide 34: When is a Portfolio the Highest Cost?
When is a Portfolio the Highest Cost? HIGHEST COST PORTFOLIO LOW REG SCENARIO PROBABILITY 100% CR 90% CR CR 80% CR CR CR 70% CR CR CR CR 60% CR CR CR CR CR 50% CR CR CR CR CR CR 40% CR CR CR CR CR CR CR 30% CR CR CR CR CR CR CR T 20% CR CR CR CR CR T T T T 10% CR CR T T T T T T T T 0% T T T T T T T
Slide 35: Supplementing Risk Analysis with Sensitivities
Supplementing Risk Analysis with Sensitivities The exercise of analyzing portfolios under different scenarios is very informative in terms of risk analysis Sensitivities supplement that picture by measuring how responsive a portfolio is to changes in a key variable 35
Slide 36: IRP Portfolio & Short Term Implementation Plan
Scott Park, Director IRP & Analytics- Midwest IRP Portfolio & Short Term Implementation Plan 36
Slide 37: Selecting the IRP Portfolio
Selecting the IRP Portfolio The IRP portfolio is a flexible 20 year resource plan updated again in 2 years Near term tactical decisions will also be evaluated The Blended Approach Portfolio was selected as the IRP portfolio Most frequently the least cost portfolio Least often the highest
Slide 38: Blended Approach Portfolio
Blended Approach Portfolio Renewables (Nameplate MW) Year Retirements Additions Wind Solar Biomass 2014 2015 Wabash River 2-5 (350 MW) Wabash River 6 2016 Wabash River 6 Coal (318 MW) NG Conversion (318 MW) 2017 Connersville 1&2 CT (86 MW) 2018 Mi-Wabash 1-3,5-6 CT (80 MW) 60 4 2019 Gallagher 2&4 (2
Slide 39: Short Term Implementation Plan
Short Term Implementation Plan TRADITIONAL PORTFOLIO 2014-2018 2019-2023 2024-2028 2029-2033 WR 2-6 Coal Gall 2,4 Coal WR 6 NG Conversion Retirements Connersville 1-2 CT MW 1-3, 5 & 6 CT WR 6 NG Conversion New CT (600 MW) New CT (400 MW) New CC (680 MW) Additions New CT (400 MW) Renewables (Cumulati
Slide 40: Next Steps
Next Steps Prepare IRP document Contemporary Issues Conference Submit IRP on November 1 IRP & Non-Technical IRP Summary posted on Duke Energy website in early November Begin process in late 2014 for 2015 IRP 40