Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Corporate Update (February 2024)
76 slides from Duke Energy Corporation (holding Company)'s corporate update, Feb 22, 2024
Slide 1: 2024 Duke Energy Indiana Integrated Resource Plan
2024 Duke Energy Indiana Integrated Resource Plan Public Stakeholder Meeting 1 FEBRUARY 22nd, 2024
Slide 2: Welcome
Welcome
Slide 3: Duke Energy Welcome
Duke Energy Welcome Stan Pinegar State President, Duke Energy Indiana
Slide 4: Safety
Safety
Slide 5: Location safety
Location safety General Area Evacuation Procedures Evacuation Assembly Areas If you hear or see evacuation alarms in your area: The primary evacuation route is through the lobby Move safely and quickly out of the building. where you entered. The secondary is through the side door at the stairwel
Slide 6: Safety - February is American Heart Month
Safety - February is American Heart Month For additional information on American Heart Month and keeping your heart healthy, visit https://www.cdc.gov/heartdisease/american_heart_month.htm https://www.nhlbi.nih.gov/health-topics/education-and- awareness/heart-month/animated-gifs | 6
Slide 7: Introductions
(= DUKE SS” ENERGY. ‘BUILDING A SMARTER ENERGY FUTURE ® Introductions
Slide 8: 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 9: Stakeholder Meeting Host: 1898 & Co.
Stakeholder Meeting Host: 1898 & Co. 1898 & Co. is the business, technology and security consultancy part of Burns & McDonnell. The Resource Planning & Market Assessments group has been working on Integrated Resource Plans for over 20 Years. Matt Lind Drew Burczyk Helping utilities in Indiana an
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: Agenda
Present | Time Duration Topic Presenter Discuss 9:30 30 Sign-in & Refreshments 10:00 5 5|0 Welcome Stan Pinegar, Duke Energy Indiana State President 10:05 10 10 | 0 Safety & Introductions Karen Hall, Duke Energy Resource Planning Director 10:15 10 10 | 0 Meeting Guidelines & Agenda Drew Burczyk, Con
Slide 14: Engagement Process Objectives & Commitments
Engagement Process Objectives & Commitments
Slide 15: Level Set | Indiana Integrated Resource Plan (IRP)
Level Set | Indiana Integrated Resource Plan (IRP) Filed with the Results in a 20-year planning Plan created Indiana Utility preferred horizon for with input from Regulatory resource portfolio serving load stakeholders Commission (IURC) and short-term every 3 years action plan “‘Preferred resource p
Slide 16: Stakeholder Engagement Objectives
Stakeholder Engagement Objectives Foster an environment that enables meaningful conversations around resource planning that prioritizes affordability, reliability and increasingly clean energy for customers Leverage participants’ expertise and experience which represent a wide range of perspecti
Slide 17: Commitments for 2024 IRP Engagement
Commitments for 2024 IRP Engagement In developing the 2024 IRP, Duke Energy will… Prioritize broad, Conduct technical Share the process Consider all Include a wide Select a preferred transparent and meetings and timely including the recommendations range of portfolio that is inclusive participation
Slide 18: 2024 DEI IRP Stakeholder Meetings (proposed timeline)
2024 DEI IRP Stakeholder Meetings (proposed timeline) Engaging with our stakeholders in multiple sessions throughout the 2024 IRP process Meeting #1 Meeting #2 Meeting #3 Meeting #4 Meeting #5 Feb 22nd 2nd half Apr 1st half June 2nd half July 1st half Sept Review previous IRP Generic Unit Summar
Slide 19: Q&A
Q&A
Slide 20: Review Previous IRP
DUKE ENERGY INTEGRATED RESOURCE PLAN VOLUME! 12.15.21
Slide 21: 2021 to 2023 Timeline
2021 to 2023 Timeline 2021 2022 2023 CAA 111 Major Policies MISO SAC IRA (8/22) proposed (5/23) IRP Refresh CPCN Modeling 2021 IRP (1/21 – 12/21) Activities (7/22 – 2/23) (9/23 – 12/23) Speedway Solar 2021 IRP Informed RFP RFP to Inform 2024 IRP PPA IURC filing Actions (1/22 – 7/22) (6/23) (12/23 –
Slide 22: Outcomes of February '23 Refresh and Fall '23 CPCN Modeling
Outcomes of February ‘23 Refresh and Fall’23 CPCN Modeling February 2023 IRP Refresh Fall 2023 CPCN Modeling 20,000 MW (max capacity) 15,000 10,000 5,000 0 2028 2030 2032 2035 2040 2028 2030 2032 2035 2040 Coal 2,532 1,270 1,270 0 0 3,841 1,270 1,270 0 0 IGCC 618 618 618 0 0 568 568 568 0 0 CC 1,360
Slide 23: Outcomes from 2023 CPCN modeling
Outcomes from 2023 CPCN modeling 2023 Fall Update Modeling (presented in December 2023 to stakeholders) Informed RFP issued in December 2023 for resources through 2032 Targeting 2,500 MW of non-intermittent resources (CC, CT, Storage) Targeting 2,500 MW of intermittent resources (solar and w
Slide 24: Q&A
Q&A
Slide 25: IRP Enhancements
(= DUKE SS” ENERGY. ‘BUILDING A SMARTER ENERGY FUTURE ® IRP Enhancements
Slide 26: Incorporating Director's Comments from 2021 IRP
Incorporating Director’s Comments from 2021 IRP Load Forecast DSM Public Advisory Meetings & Would like more detail on how load is Limited discussion of EE and Stakeholder Engagement forecasted and increased information DR modeling and associated Session content lacking in substance and tone. to eva
Slide 27: What's New in the 2024 IRP
What’s New in the 2024 IRP IN House Enrolled Act (HEA) 1007 Pillars Evaluating Stochastic Analysis to measure robustness of portfolios Enhanced Reliability Verification Analysis (Resource Adequacy of portfolios) Including Clean Air Act (CAA) 111 impacts Adjustments to Inflation Reduction A
Slide 28: Q&A
Q&A
Slide 29: MISO Overview
MISO Overview
Slide 30: Midcontinent Independent System Operator (MISO)
Midcontinent Independent System Operator (MISO) MISO is an Independent, not-for-profit, member- based organization focused on managing the flow of high-voltage electricity across its region. Duke Energy Indiana is a member of MISO. MISO became the nation’s first FERC-approved Regional Transmis
Slide 31: Reliability Through Market Products
Reliability Through Market Products Ancillary Services Energy Markets Resource Adequacy Services necessary to support Energy is bought and sold MISO in concert with state the operational balance of through wholesale and retail regulators works to ensure energy supply and demand. energy markets. ther
Slide 32: MISO Forward Planning and Energy Mix
2000 2005 2009 2014 2020 2022 MISO Energy Ancillary Market Redefining FERC Approves Redefined markets need to be Formed Markets Services Vision Markets MISO Seasonal robust for potential volumes of Launch Launch Resource Adequacy participating resources projected in MISO’s future scenarios MISO Forw
Slide 33: MISO Capacity Overview
MISO Capacity Overview MISO PRMR + Rules SAC + ELCC Studies Capacity Auction Load Serving Entities (LSE) Seasonal Accredited MISO holds a seasonal are required to procure Capacity (SAC) scores are Planning Resource Auction capacity to meet their evaluated by MISO to (PRA) which helps ensure Pl
Slide 34: MISO Generation Interconnection Queue (GI)
MISO Generation Interconnection Queue (GI) The number of resources entering MISO GI queue has been increasing annually. There are currently 1317 projects totaling 228 GW currently in the MISO queue. Projects go through the GI process to determine the grid upgrades needed to interconnect and th
Slide 35: Seasonal Resource Adequacy
Seasonal Resource Adequacy Summer Fall Winter Spring MISO is continuing to study and refine resource accreditation methodologies. Discussed further during future Technical Stakeholder meetings. MISO Resource Accreditation White Paper | 35
Slide 36: Reliability Imperative and System Attributes
Reliability Imperative and System Attributes Critical System Attributes Fall 2022 MISO Launched an initiative in the public stakeholder process to identify which critical system attributes may become scarce due to fleet changes. MISO and its stakeholder seek to quantify how much of each critical
Slide 37: Q&A
Q&A
Slide 38: Lunch
(= DUKE SS” ENERGY. UILDING A SMARTER ENERGY FUTURE ® Lunch
Slide 39: Clean Air Act 111 (CAA 111)
(= DUKE SS” ENERGY. ‘BUILDING A SMARTER ENERGY FUTURE ® Clean Air Act 111 (CAA 111)
Slide 40: Proposed EPA CAA Section 111 rule components
Proposed EPA CAA Section 111 rule components Year Coal Year Existing Gas New Gas Near- Long- Imminent Medium-term term term Final standards apply to units For units >300 MW and with >50% CF, built after 5/23/23. Proposed performance standard of 1000 lb CO2/MWh or 2030 (Phase 1) standard is Retire wi
Slide 41: Incorporating the Inflation Reduction Act (IRA)
Incorporating the Inflation Reduction Act (IRA)
Slide 42: ITC & PTC Potential Ranges
Investment Tax Credit (ITC) & Production Tax Credit (PTC) Potential Ranges Internal Kick-off <5 MW solar, wind and associated storage can receive up to 70% ITC with statutory limits | 42
Slide 43: IRA – Energy Communities
IRA – Energy Communities Internal Kick-off DEI assumes Energy Community bonus on 60% of solar, 60% of wind and 100% of batteries. Maps from CRA, Inflation Reduction Act Energy Communities, April 13, 2023, Presentation | 43
Slide 44: Current IRA Supply Side Modeling Assumptions
Current IRA Supply Side Modeling Assumptions Base Base Bonus Bonus Bonus PTC Modeling ITC Modeling (PTC->45Y) (ITC-> 48) Wage&App Energy Comm Dom Content SMR Yes No Yes No No W&A PTC N/A Standalone Solar Yes No Yes 60% No 1.06xW&A PTC N/A Wind Pre-2030 Yes No Yes 60% No 1.06xW&A PTC N/A Wind 2030 -
Slide 45: Q&A
Q&A
Slide 46: Scenario Development
(= DUKE SS” ENERGY. UILDING A SMARTER ENERGY FUTURE ® Scenario Development
Slide 47: Key Definitions
Key Definitions Scenario Analysis Risk Analysis Scenario: Sensitivity: “Worldview” Single Variable Potential futures outlining how external trends could influence Sensitivity analysis stresses a single variable while many key variables impacting a resource plan. These holding all else constant t
Slide 48: Proposed Scenarios | Worldviews
Proposed Scenarios | “Worldviews” Goal: Develop scenarios that (A) reflect vastly different future outcomes than the reference case and (B) where the fundamental drivers of those divergent futures could plausibly impact many resource plan modeling inputs. | 48
Slide 49: Considerations
Considerations Scenarios and sensitivities should not be construed as policy goals. The Aggressive Policy & Rapid Innovation and Minimum Policy & Lagging Innovation scenarios are not predictions of the future. Instead, they are vastly varying futures developed to intentionally push the boundarie
Slide 50: Proposed Scenarios | Variables Across Worldviews
Proposed Scenarios | Variables Across Worldviews Resource Distributed Availability Renewables & Emerging CAA 111 Coal Price Gas Price IRA CO2 Tax Resources (interconnection Storage Cost Technology (incl. net metering) timing) High Renew. Extend + Availability Earlier & More Aggressive Policy & Phase
Slide 51: Scenario Narrative | Aggressive Policy & Rapid Innovation
Scenario Narrative | Aggressive Policy & Rapid Innovation Resource Distributed Renewables & Emerging CAA 111 Coal Price Gas Price IRA Availability CO2 Tax Resources Storage Cost Technology (interconnection timing) (incl. net metering) Extend + High Renew. Avail. Aggressive Policy & Phases Earlier &
Slide 52: Scenario Narrative | Minimum Policy & Lagging Innovation
Scenario Narrative | Minimum Policy & Lagging Innovation Resource Distributed Renewables & Emerging CAA 111 Coal Price Gas Price IRA Availability CO2 Tax Resources Storage Cost Technology (interconnection timing) (incl. net metering) Minimum Policy & Later & Less Repeal Low Low Repeal Base None Base
Slide 53: Analytical Framework | Preliminary Run Matrix
Analytical Framework | Preliminary Run Matrix SCENARIOS Aggressive Policy & Minimum Policy & Reference Examples: Rapid Innovation Lagging Innovation Coal Retirement Dates 1 GENERATION STRATEGIES Coal Retirement Dates 2 No New CCs Model each (with optimized coal retirements) Generation Model each Gen
Slide 54: Analytical Framework
Analytical Framework Determine What Will Build the Power Price Power Price (Resource Adequacy Analysis) Impact Our Future Scenarios Production Cost Modeling Development Development Reliability Verification Uncertain factors that could A C impact the landscape. Reference Scenario Alternate Scenar
Slide 55: What the Scorecard could look like
What the Scorecard could look like Goal: evaluate diverse set of portfolios on Scorecard Metric(s) for each Planning Objective Diverse set of Portfolios Environmental Reliability Resiliency Stability Affordability Risk Sustainability Portfolios Metric Metric Metric Metric Metric Metric Metric Metr
Slide 56: Q&A
Q&A
Slide 57: Planning Objectives
(= DUKE SS” ENERGY. ‘BUILDING A SMARTER ENERGY FUTURE ® Planning Objectives
Slide 58: House Enrolled Act (HEA) 1007 Requirements | 5 Pillars
House Enrolled Act (HEA) 1007 Requirements | 5 Pillars Reliability Resiliency Stability Environmental Affordability Sustainability Adequacy of Ability of system Ability of an (A) Impact of electric service: to: (A) adapt to electric system to environmental Retail electric (A) the ability to changing
Slide 59: Planning Objectives will guide selection of Preferred Portfolio
Planning Objectives will guide selection of Preferred Portfolio “Preferred resource portfolio means the utility’s selected long Affordability term supply-side and demand- Reliability side resource mix that safely, Environmental reliably, efficiently, and cost- Sustainability effectively meets the el
Slide 60: Potential Scorecard Metrics
Potential Scorecard Metrics
Slide 61: Potential Measures of Environmental Sustainability & Affordability
Potential Measures of Environmental Sustainability & Affordability Planning Measure Description Purpose Objective CO2 Emissions Percent CO2 reduction from 2005 baseline at Allows comparison of pace at which resource Environmental Reduction specified years (e.g., 2030 and 2035) mix gets cleaner Susta
Slide 62: Potential Measures of Reliability
Potential Measures of Reliability Planning Measure Description Purpose Objective Ability of the portfolio’s on-system Peak Availability of On- Percentage of on-demand MWs owned Reliability generation to provide energy ‘on-demand’ System Resources and/or contracted by Duke Energy Indiana during peak
Slide 63: Potential Measures of Resiliency
Potential Measures of Resiliency Planning Measure Description Purpose Objective An empirically-derived diversity baseline of Resiliency the system’s capacity resources by Measure diversity of capacity resource technology type, as measured by the Resource Diversity types on system as an indicator of
Slide 64: Potential Measures of Stability
Potential Measures of Stability Planning Measure Description Purpose Objective Pace of change from Inertial MW to Indicates risk to stability via Stability Rate of Change of Inertial MW Low/No Inertia MW in any given 1-2- operational complexity as fleet is year period transitioned Indicates risk of
Slide 65: Potential Measures of Risk & Uncertainty
Potential Measures of Risk & Uncertainty Planning Measure Description Purpose Objective Range between Min & Max PVRRs Indicates risk of cost variance Cost Certainty ($B) across scenarios and stochastic Cost Risk across potential futures iterations 95th percentile of PVRR across Indicates risk of hig
Slide 66: Potential Measures of Risk & Uncertainty (cont.)
Potential Measures of Risk & Uncertainty (cont.) Planning Objective Measure Description Purpose Cumulative MW additions of CCS, new Provides indication of risk associated Execution Risk Cumulative New nuclear, long duration storage or other with investment in emerging Technology Additions emerging t
Slide 67: Q&A
Q&A
Slide 68: Next Steps
Next Steps Additional questions, comments, and feedback can be sent to DEIndianaIRP@1898andco.com The next technical meeting will occur in mid-April. The next public stakeholder meeting will occur in second half of April. Meeting registration will be sent out 4-6 weeks in advance. | 68
Slide 69: Thank you
(= DUKE SS” ENERGY. ‘BUILDING A SMARTER ENERGY FUTURE ® Thank you
Slide 70: Appendix
APPENDIX fm DUKE S” ENERGY. BUILDING A SMARTER ENERGY FUTURE ®
Slide 71: Acronyms
Acronyms AR Advanced Reactor IRP Integrated Resource Plan CAA 111 Clean Air Act 111 ITC Investment Tax Credit CAGR Compound Annual Growth Rate IURC Indiana Utility Regulatory Commission CC Combined Cycle MISO Midcontinent Independent System Operator CCS Carbon Capture & Sequestration MPS Market Pote
Slide 72: Seasonal Accreditation Adjusted UCAP
Slides reviewed at Technical Stakeholder Session on February 6th Seasonal Accreditation Adjusted UCAP
Slide 73: MISO Seasonal Accreditation Capacity (SAC) Value Considerations
MISO Seasonal Accreditation Capacity (SAC) Value Considerations Considerations and observations Observation: based on Stakeholder feedback in By-unit by-season accreditation capacity values are 2023 Refresh process too volatile year-over-year to be used as long-term assumptions A unit with a low
Slide 74: Individual Units vs. System SAC Volatility Example
Individual Units vs. System SAC Volatility Example From planning year (PY) 23-24 to PY24-25, some units experienced as much as +40% to -25% in SAC values The sum of all Schedule 53 SAC only changed about 3 to 8% System total SAC is substantially more stable than by-unit by-season SAC Gibson 1
Slide 75: Pro-Rata Adjustment of UCAP to Sum to Total System SAC
Pro-Rata Adjustment of UCAP to Sum to Total System SAC Adjusted UCAP serves as basis for individual units DRAFT 12/15/23 - Subject to Change DRAFT 12/15/23 - Subject to Change DRAFT 12/15/23 - Subject to Change PY24-25 Auction Data UCAP SAC UCAP-Adjusted Summer Fall Winter Spring Summer Fall Winter
Slide 76: MISO Proposed Changes to Seasonal Accreditation
MISO Proposed Changes to Seasonal Accreditation Currently leveraging UCAP in modeling today Proposed changes to MISO’s Seasonal Accreditation Construct from UCAP to Direct Loss of Load (DLOL) will have significant impacts on expansion plan | 76