Duke Energy Corporation (Holding Company) · NYSE:DUK
Duke Energy Corporation (Holding Company) — Corporate Update (August 2024)
66 slides from Duke Energy Corporation (Holding Company)'s corporate update, Aug 13, 2024
Slide 1: 2024 Duke Energy Indiana Integrated Resource Plan
2024 Duke Energy Indiana Integrated Resource Plan Stakeholder Meeting 4 August 13, 2024
Slide 2: Safety
Safety
Slide 3: Safety Moment: Preventing Cybersecurity Attacks
Safety Moment: Preventing Cybersecurity Attacks Phishing is a social engineering attack attempting to trick you into revealing sensitive Cyberattacks information. Voice phishing, or vishing, using phone calls. Text phishing, or smishing, are not Limited leverages text messages. QR phishing, or quish
Slide 4: Welcome
Welcome Stan Pinegar State President, Duke Energy Indiana
Slide 5: Introductions
(= DUKE Se” ENERGY. ‘BUILDING A SMARTER ENERGY FUTURE ® Introductions
Slide 6: Duke Energy Team
Duke Energy Team Integrated Resource Planning Team Matt Kalemba Nate Gagnon Matt Peterson Emma Goodnow Karen Hall Chris Hixson Josh Paragas Tyler Cook Vice President, Managing Director, Resource Market Strategy & Resource Principal Engineer, Engineer, Resource Engineer, Resource Integrated Resource
Slide 7: Agenda
Agenda
Slide 8: Public Stakeholder Meeting #4 Agenda
Public Stakeholder Meeting #4 Agenda Present | Time Duration Discuss Topic Presenter Stan Pinegar, Duke Energy Indiana State President 9:30 5 5|0 Welcome & Safety Karen Hall, Duke Energy Resource Planning Director 9:35 5 5|0 Meeting Guidelines & Agenda Drew Burczyk, Consultant, Resource Planning & M
Slide 9: Technical Stakeholder Meeting #4 Agenda
Technical Stakeholder Meeting #4 Agenda Present | Time Duration Discuss Topic Presenter 9:00 5 5|0 Welcome & Safety Karen Hall, Duke Energy Resource Planning Director 9:05 5 5|0 Meeting Guidelines & Agenda Drew Burczyk, Consultant, Resource Planning & Market Assessments, 1898 & Co. Nate Gagnon, Duke
Slide 10: Meeting Guidelines
Meeting Guidelines
Slide 11: Meeting Ground Rules
Meeting Ground Rules Respect each other: Help us to collectively uphold respect for each other's experiences and opinions, even in difficult conversations. We need everyone’s wisdom to achieve better understanding and develop robust solutions. Focus on today’s topics: Please respect the scope of tod
Slide 12: Participation
Participation There will be several opportunities throughout the presentation for attendees to actively participate by asking questions, making comments and/or otherwise sharing information. Q&A: Please use the “Q&A” feature, on the menu at the bottom of your screen, to submit questions to the pre
Slide 13: Stakeholder Feedback and Incorporation
Stakeholder Feedback and Incorporation
Slide 14: Stakeholder Feedback Received & Incorporated into Meeting #4 Agenda
Stakeholder Feedback Received & Incorporated into Meeting #4 Agenda Feedback, Question, or Requested Information Section of Today’s Meeting What do market purchases in the results represent? Market Purchases Overview In terms of the market being less expensive than generation in house, is Market Pur
Slide 15: Additional Feedback Received and Duke Energy Responses
Additional Feedback Received and Duke Energy Responses Feedback, Question, or Requested Information Response/Update Will any future meetings be held in person? The third meeting was shifted to a hybrid meeting (in person and virtual options). We initially planned to hold the 5th meeting as a hybrid
Slide 16: Additional Feedback Received and Duke Energy Responses
Additional Feedback Received and Duke Energy Responses Feedback, Question, or Requested Info Response/Update In addition to the increased resource There are no plans to increase the assumed energy storage availability at this time. availability limits for Solar & Wind shared in Resource availability
Slide 17: Q&A
Q&A
Slide 18: RFP Update
(= DUKE Se” ENERGY. ‘BUILDING A SMARTER ENERGY FUTURE ® RFP Update
Slide 19: DEI 2023/2024 Request for Proposals (RFP) Status
DEI 2023/2024 Request for Proposals (RFP) Status All Source Two targeted RFPs issued concurrently: Intermittent (renewable) & Non-Intermittent (thermal and storage) RFP bid selection compared assets within categories based on both quantitative and qualitative criteria Capacity targets initiall
Slide 20: DEI 2023/2024 RFP – Product Definition
DEI 2023/2024 RFP – Product Definition Intermittent Generation Stated Need: Up to 2,500 MW (ICAP) in-service by 12/31/2032 New or existing resources using proven technologies with technology specific minimum capacities Resource type examples: Solar, wind, standalone storage, hybrid with storag
Slide 21: DEI's 2023/2024 RFP Evaluation Criteria
DEI’s 2023/2024 RFP Evaluation Criteria PRICE NON-PRICE Proposal Economics Reliability and Deliverability Development Asset Specific Benefits / Risks (30% / 300 points) (30% / 300 points) (20% / 200 points) (20% / 200 points) 300 points: The total points available under 300 points: All proposals wil
Slide 22: DEI 2023/2024 RFP – Overview of Bids
DEI 2023/2024 RFP – Overview of Bids 68 individual projects across six states with 18.6 GW Allocation by Technology Type (ICAP) (ICAP) represented ICAP by Project ICAP by Proposal 160+ different proposal structures between the 68 MW % MW % projects, totaling 40.3 GW (ICAP) Solar 5,145 28% 14,308
Slide 23: DEI 2023/2024 RFP – Distribution of Projects Received
DEI 2023/2024 RFP – Distribution of Projects Received 68 individual projects across six states with 18.6 GW (ICAP) represented Sums below account for the largest MW proposal option of a given project 1 Michigan Project MIN of ICAP and POI (MW) 1 Iowa Solar SPS Wind Thermal Storage Total IL 150 0
Slide 24: DEI 2023/2024 RFP – Summary of Pricing
DEI 2023/2024 RFP – Summary of Pricing Average Weighted Pricing by Technology and Deal Structure Asset Sale (BTA) Power Purchase Agreement Technology $/kW Count $/MWh $/kW-mo $/kW-yr Count Solar $ 2,099.79 10 $ 67.53 73 Solar + Storage $ 3,360.14 8 $ 68.69 22 Wind $ 66.09 15 Thermal $ 1,665.42 8 $ 1
Slide 25: DEI 2023/2024 RFP – Considerations on Asset Selection
DEI 2023/2024 RFP – Considerations on Asset Selection Balances stated costs with Captures portfolio-level considerations and trade offs between uncertainties on interconnection RFP Project cost, timing and performance risk technology and market scenarios Rankings Considers a range of project and Con
Slide 26: Q&A
Q&A
Slide 27: Break
fs DUKE SS” ENERGY. SMARTER ENERGY FUTURE’ Break
Slide 28: Preliminary Portfolio Modeling Update
Preliminary Portfolio Modeling Update
Slide 29: Analytical Framework
Analytical Framework Generation Strategies Scenarios Strategy Variations Convert / Co-Fire Coal “Worldviews” • 2x1 v. 1x1 replacement • Full NG conversion v. co-firing • No 111 >3 Reference Strategy Variation Retire Coal Portfolios Portfolio Sensitivities • Resource Capital Cost Convert Cayuga Aggre
Slide 30: Generation Strategies Included in IRP Analysis
Generation Strategies Included in IRP Analysis CAA Section 111-Compliant Strategies Non-Compliant Convert Cayuga Co-Fire Gibson Incremental Generation Exit Coal Earlier Unit Convert / Co-Fire Coal Retire Coal “No 111” (Blend 1) (Blend 2) (Blend 3)* (Stakeholder) Retire by Cayuga 1 Retire by 1/1/2030
Slide 31: Preliminary Results Summary for All Strategies in Reference Scenario
Preliminary Results Summary for All Strategies in Reference Scenario UCAP Capacity Mix Over Time (Winter GW) Preliminary PVRRs ($B) through 2044 7 Grid Edge $27.0 6 Solar $26.5 5 Wind $26.0 Battery $25.5 4 Hydro & CHP 3 $25.0 CT 2 $24.5 CC 1 $24.0 IGCC-Gas - $23.5 IGCC-Coal $23.0 Co-Fi Gib Exit Earl
Slide 32: Generation Strategy Results Summary: Convert / Co-Fire Coal
Generation Strategy Results Summary: Convert / Co-Fire Coal Notes on Generation Strategy CO2 Emissions Over Time • Converting coal units to burn 100% natural gas or co-fire coal/gas, mitigates PVRR Range ($B) 40 need for new capacity in near term, but does not provide additional capacity. $30 35 • C
Slide 33: Generation Strategy Results Summary: Retire Coal
Generation Strategy Results Summary: Retire Coal Notes on Generation Strategy CO2 Emissions Over Time • Significant additions of dispatchable and variable energy resources are PVRR Range ($B) 40 required by the early 2030s to meet incremental load growth and replace over $30 35 3.8 GW of retiring co
Slide 34: Generation Strategy Results Summary: Convert Cayuga (Blend 1)
Generation Strategy Results Summary: Convert Cayuga (Blend 1) Notes on Generation Strategy CO2 Emissions Over Time • Cayuga units 1 and 2 are repowered to burn 100% natural gas by 2030, while PVRR Range ($B) 40 Gibson units 1 through 4 are retired and replaced with new combined-cycle $30 35 generati
Slide 35: Generation Strategy Results Summary: Co-Fire Gibson (Blend 2)
Generation Strategy Results Summary: Co-Fire Gibson (Blend 2) Notes on Generation Strategy CO2 Emissions Over Time • Cayuga units 1 and 2 retire by 2030 and 2031. Two 1x1 CCs are added at the PVRR Range ($B) 40 site, replacing the retiring coal and providing incremental MW to help serve $30 APRI 35
Slide 36: Generation Strategy Results Summary: Incremental Generation (Blend 3)
Generation Strategy Results Summary: Incremental Generation (Blend 3) Notes on Generation Strategy CO2 Emissions Over Time • The growth-oriented Incremental Generation (Blend 3) strategy builds on PVRR Range ($B) 40 Co-Fire Gibson (Blend 2), seeking to support rapid economic development $30 APRI 35
Slide 37: Generation Strategy Results Summary: Exit Coal Earlier (Stakeholder)
Generation Strategy Results Summary: Exit Coal Earlier (Stakeholder) Notes on Generation Strategy CO2 Emissions Over Time • Accelerating the retirement of Gibson 3 and 4 to 2030 necessitates the PVRR Range ($B) 40 addition of higher volumes of renewables and storage by 2030 than in other $30 35 stra
Slide 38: Q&A
Q&A
Slide 39: Break
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Slide 40: Preliminary Portfolio Modeling Update: High Load Sensitivity
Preliminary Portfolio Modeling Update High Load Sensitivity
Slide 41: Portfolio Sensitivity Analysis: High Load (Preliminary Results)
Portfolio Sensitivity Analysis: High Load (Preliminary Results) Forecasted Peak Load (GW) Impact of High Load on Resource Selection High Reference Case Resource Additions Through 2044 (GW) Forecast Strategy CC Solar Wind Storage Convert 1.4 2.6 2.8 0.8 Retire 3.6 1.6 3.6 0.4 Convert Cay. 2.9 1.6 2.4
Slide 42: Q&A
Q&A
Slide 43: Considerations for Short-Term Action Plan
Preliminary Portfolio Modeling Update Considerations for Short-Term Action Plan
Slide 44: Reminder: Thinking About the IRP Planning Period
Reminder: Thinking About the IRP Planning Period Iterative resource plan updates 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 Future IRP Filings Immediate future • Typically, less Early 2030s divergence across portfolios, relative to • Increased
Slide 45: Using Model Results to Inform a Short-Term Action Plan
Using Model Results to Inform a Short-Term Action Plan Range of Supply Side Resource Additions by 2032 Significant Considerations for Developing a Short-Term Action Plan: Appropriate balance of retirement / gas Range of results for all 111- conversion / co-firing across eight coal units compliant
Slide 46: Q&A
Q&A
Slide 47: Preliminary Scorecard Results
Preliminary Scorecard Results
Slide 48: Draft Scorecard
Draft Scorecard Environmental Sustainability Affordability Reliability Resiliency Cost Risk Market Exposure Execution Risk Cumulative Perfor- Availability Cumulative CO2 mance in of On- Fast Start Cumulative Resource CO2 Reduction Non-CO2 Customer 95th Cost IRA Fuel Energy PVRR System & Spinning Res
Slide 49: Scorecard Metrics
Scorecard Metrics Metric Description Metric Description CO2 Emissions Percent unserved energy during an extreme weather event Percent CO2 reduction relative to 2025 Performance in 95th Reduction in summer and winter based on most extreme weather Percentile Extreme events (95th percentile or greater)
Slide 50: Affordability: PVRR
Affordability: PVRR Preliminary PVRR Results Across Scenarios through 2044 Initial Observations: $30 Aggressive Policy & In the Aggressive Policy & Rapid Innovation $29 Rapid Innovation scenario, higher fuel costs, imposition of a CO2 tax, and capacity factor restrictions on $28 existing gas asset
Slide 51: CO2 Emissions in Preliminary Results
CO2 Emissions in Preliminary Results Annual CO2 Emissions Over Time (000’s Tons) 2035 CO2 Emissions Reduction (from 2025 levels) Aggressive Minimum Policy 40,000 Strategy Reference Case Policy & Rapid & Lagging 35,000 Innovation Innovation 30,000 Convert / Co-fire Coal -70% -94% -61% Blend 1 Retire
Slide 52: Q&A
Q&A
Slide 53: Break
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Slide 54: Energy Market Interaction & Modeling
Energy Market Interaction & Modeling
Slide 55: MISO Energy Market Interaction
MISO Energy Market Interaction MISO dispatches the system by matching the Duke Energy Indiana is a amount of generation online member of the Midcontinent in order to serve MISO’s All energy generated DEI buys energy needed Independent System Operator total load every hour of by DEI resources is to s
Slide 56: Illustrative Local IRP Model Dispatch
Market Purchases in the IRP Model Capacity Expansion In the local IRP model, there are two parts CC Solar NG Conversion Wind Grid Edge DEI Load to the simulation: 75% Requirement Market Purchase 6,000 1. Capacity expansion – EnCompass builds new 5,000 Market Sale resources in order to meet capacity
Slide 57: Stochastic Modeling of Energy Market Exposure
Stochastic Modeling of Energy Market Exposure Simulated Gas Price Statistics (Henry Hub) Simulated Power Price Statistics (IND HUB) Market Implied Heat Rate $14 $90 18 Mean Price 25th-75th Percentile $80 16 $12 10th-90th Percentile Stochastic Study Years 14 $70 $10 $60 12 $8 10 $50 MMBtu/MWh $/MMBtu
Slide 58: Stochastic Modeling of Energy Market Exposure
Stochastic Modeling of Energy Market Exposure 25th – 75th Percentile Mean 10th – 90th Percentile Stochastic model analyzes portfolios using 43 weather years, Differences in portfolio generation and purchases driven by and simulations of load, fuel prices, power prices and outages difference in c
Slide 59: Q&A
Q&A
Slide 60: Open Q&A
Open Q&A
Slide 61: 2024 DEI IRP Stakeholder Meetings
2024 DEI IRP Stakeholder Meetings Engaging with our stakeholders in multiple sessions throughout the 2024 IRP process Meeting #1 Meeting #2 Meeting #3 Meeting #4 Meeting #5 February 22nd April 29th June 20th 1st half August Early October Review previous IRP Generic Unit Summary Final inputs
Slide 62: Next Steps
Next Steps Review Stakeholder Meeting Feedback Modeling and analysis Perform Additional Sensitivity Modeling to be performed in Final Base Case and Scenario Simulations coming weeks Final Scorecard Select Preferred Portfolio Jul Aug Sep Oct Customer Programs Technical Stakeholder #4 Public Stakehold
Slide 63: Next Steps
Next Steps Additional questions, comments, and feedback can be sent to DEIndianaIRP@1898andco.com Please provide any written feedback by August 20, 2024 The fifth technical and public stakeholders meeting will occur in early October. Meeting registration will be sent out 4-6 weeks in advance. | 63
Slide 64: Thank you
Thank you
Slide 65: Appendix: Acronyms
(= DUKE Se” ENERGY. ILDING A SMARTER ENERGY FUTURE’ Appendix: Acronyms
Slide 66: Acronyms
Acronyms APRI Aggressive Policy & Rapid Innovation GUS Generic Unit Summary BOY Beginning of Year GW Gigawatt BTA Build Transfer Agreements ICAP Installed Capacity CAA 111 Clean Air Act 111 IRA Inflation Reduction Act CAGR Compound Annual Growth Rate IRP Integrated Resource Plan CAPEX Capital Expend