Duke Energy Corporation (Holding Company) · NYSE:DUK
Duke Energy Corporation (Holding Company) — Investor Day (2013)
24 slides from Duke Energy Corporation (Holding Company)'s investor day presentation, 2013
Slide 1: Commercial Businesses
Analyst Meeting 2013 Commercial Businesses Marc Manly, Executive VP and President, Commercial Businesses
Slide 2: Key takeaways
Key takeaways – We follow a low-risk business model. We have highly-contracted assets that are diversified among different geographies, regulatory structures and fuel types – We support Duke Energy’s long-term financial objectives – We are focused on achieving acceptable returns on our non-regulated
Slide 3: Duke Energy International (DEI) – overview
Duke Energy International (DEI) – overview Diverse Portfolio Strong Earnings Diversity and Cash Flows: – Highly contracted business – Historically strong earnings growth – Self-funding cash flows ($1.1 billion (1) of off-shore cash) – Operating in countries with strong demand growth – In 2012, DEI g
Slide 4: DEI – growing electric demand and strong economies
DEI – growing electric demand and strong economies Real GDP Growth (%) Electricity Demand Growth (%) 12.0% 10.0% 12.0% 8.0% 10.0% 6.0% Brazil 8.0% Brazil 4.0% Peru 6.0% Peru 4.0% 2.0% Chile 2.0% Chile 0.0% USA 0.0% USA -2.0% -2.0% -4.0% -4.0% -6.0% 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2
Slide 5: Commercial Power Segment – overview
Commercial Power Segment – overview Midwest Generation Coal/Oil – 3,700 MW (1) Gas – 3,200 MW Duke Energy Renewables Wind – 1,600 MW Solar – 100 MW – Midwest Generation - mature merchant generation business in the PJM wholesale markets – Duke Energy Retail – competitive retail electric service for c
Slide 6: Midwest Commercial Generation – overview
Midwest Commercial Generation – overview Portfolio Well Positioned for Market Changes and Environmental Regulations Midwest Commercial Generation Mix (MW, %) 200, 3% Coal-fired Generation – Location provides fuel flexibility 600, 9% – Energy margins squeezed by low natural gas prices – Expect mercur
Slide 7: Midwest Commercial Generation strategies
Midwest Commercial Generation strategies Mitigate earnings pressures due to low PJM capacity prices and energy margins Regulatory Operational Pursue Ohio cost-based capacity filing: – Continue to develop the single fleet – State capacity mechanism was established in the operating strategy and optimi
Slide 8: Duke Energy Renewables - Grown to scale since entry in 2007
Duke Energy Renewables - Grown to scale since entry in 2007 – Low Risk Portfolio: – Long-term PPA approach with creditworthy counterparties – Only invest in projects producing acceptable IRR over the life of the project – Pursue joint venture structures and project financing to reduce equity investm
Slide 9: Commercial Businesses strategy
Commercial Businesses strategy – Follow a low-risk business model: – Highly contracted in DEI, and in Midwest Generation through financial hedging – Long-term PPA approach for Duke Energy Renewables – Diversification among different geographies, regulatory jurisdictions and fuel types – Utilize the
Slide 10: Appendix – Duke Energy International
Appendix – Duke Energy International A-1 | Analyst Meeting 2013
Slide 11: Brazil’s reservoir levels – SE region
Brazil’s reservoir levels – SE region 100 80 Southeast Reservoir Level (% Maximum Volume) 60 55.3 45.1 37.5 40 28.9 20 0 Dec Jan Feb Mar Apr May Jun Jul Aug Set Oct Nov Dec 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Expected – Rain conditions and reservoir levels have improved
Slide 12: Brazil – highly contracted business
Duke Energy International Brazil – YE Contractible Capacity (~1,000 MW) Under Firm Contract Brazil – highly contracted business 97% 90% – Highly contracted position in Brazil – 79% 66% average tenor over 5 years 53% – Revenue: – New contracts priced at current market 2013E 2014E 2015E 2016E 2017E pr
Slide 13: Duke Energy International – Foreign Currency
Duke Energy International Foreign Currency Brazil FX – R$ / US$ 2.50 2.30 Unfavorable 2.10 1.90 Favorable 1.70 1.50 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Historical Forecast Real/US Dollar Brazilian Real – Annual Average Key Earnings Sensitivity to FX 2009A 2010A 2011A 2012A 2013E • Every 10% ch
Slide 14: Duke Energy International – Consolidated Overview
Duke Energy International Consolidated Overview Argentina Brazil Chile Ecuador El Salvador Peru Guatemala % Contracted in 2012 (1) 77% 98% N/A 100% 47% 86% 77% Installed Capacity 576 MW 2,258 MW 380 MW 192 MW 328 MW 792 MW 356 MW Owned Capacity 524 MW 2,073 MW 380 MW 163 MW 296 MW 792 MW 356 MW DEI
Slide 15: Brazil Energy Market – generation
Brazil Energy Market – generation Brazil Installed Capacity by Fuel Type (120,940 MW) - 2011 Other 4% Biomass – Hydros represent 72% of installed capacity and 90% of energy production 7% Liquid – Electricity Consumption ~ 450 TWh/yr and annual consumption growth rate ~5% Fuels – New energy auctions
Slide 16: Peru Energy Market – generation
Peru Energy Market – generation Peru Installed Capacity by Fuel Type – Generation optimized and dispatched by COES (merit order dispatch according to variable costs) Coal (6,746 MW) - 2011 – Theoretical marginal cost system with capacity payment Liquid 2% Fuels – Spot market for generators only; lar
Slide 17: Chile Energy Market – generation
Chile Energy Market – generation Chile SIC Installed Capacity Chile SING Installed Capacity – Audited Marginal Cost system with Capacity Payment Wind (12,365 MW) Hydro (3,964 MW) – Two main Power Systems 2% 0% Biomass – Central Interconnected System (SIC) – 2% 6,400MW demand Coal – North Interconnec
Slide 18: Duke Energy International – National Methanol Company (NMC)
Duke Energy International – National Methanol Company (NMC) – Background – NMC is a producer of methanol and MTBE in Saudi Arabia – Ownership: Saudi Basic Industries Corporation (SABIC) - 50%, Celanese - 25%, and Duke Energy - 25% – JV agreement extended to 2032 (effective April 1, 2010) – Upon NMC
Slide 19: Appendix – Midwest Commercial Generation
Appendix – Midwest Commercial Generation A-10 | Analyst Meeting 2013
Slide 20: Midwest Generation guidance assumptions – 2013
Midwest Generation guidance assumptions – 2013 2013 Guidance Assumptions Generation Volumes (MM MWh’s) 40,000 Midwest Generation Owned Capacity (in MWs) 6,825 megawatts 30,000 PJM Capacity Revenues $50 million 20,000 ESP Stability Charge $110 million (1) 10,000 Assumed Economic Generation Volumes ~3
Slide 21: Non-regulated Midwest Generation
Non-regulated Midwest Generation Midwest Primarily Coal Midwest Gas Fired Beckjord (PJM) - 953 MW (1) Stuart (PJM) - 900 MW Hanging Rock (PJM) - 1,226 MW Type: 6 Coal Units, 4 CT Units Type: 4 Coal Units Type: 2 Combined Cycle Units Fuel: Coal, Oil Fuel: Coal Fuel: Natural Gas Ownership: Unit 6 37.5
Slide 22: Appendix – Renewables
Appendix – Renewables A-13 | Analyst Meeting 2013
Slide 23: Non-regulated renewables portfolio – solar
Non-regulated renewables portfolio – solar Solar Projects State % Owned Installed Capacity (MW) Blue Wing TX 100% 14 Solar Star I NC 100% 1 Taylorsville NC 100% 1 Bagdad AZ 100% 15 Solar Star II NC 100% 5 RP Orlando FL 100% 5 Re Ajo AZ 100% 4 Martin’s Creek NC 100% 1 Murphy’s Farm Power NC 100% 1 CS
Slide 24: Non-regulated renewables portfolio – wind
Non-regulated renewables portfolio – wind Wind Projects State % Owned Installed Capacity (MW) Sweetwater 1,2,3 (1) TX 50% 133 Sweetwater 4,5 (1) TX 47% 151 Ocotillo TX 100% 59 Happy Jack WY 100% 29 North Allegheny PA 100% 70 NoTress 1A TX 100% 91 NoTrees 1B/1C TX 100% 62 Silver Sage WY 100% 42 Campb