Distributed Energy Resources

William F Tyndall Duke Energy Commercial Strategic Initiatives

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Energy Challenges

United States • Aging power plants and distribution infrastructure • Climate change • Changing customer expectations Globally • 1 billion live without access to electricity • Energy reliability is challenge in many countries • Climate goals require substantial decarbonization of

electricity supply

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Working definition of distributed energy landscape

Demand management Energy efficiency

Decentralized generation

Dec

entr

aliz

ed

ener

gy r

esou

rces

En

ergy

Ext

ract

ors

Services and solutions to optimize total energy

consumption for the same level of services

Distributed storage

Storing energy/electricity, 'behind the meter' and on-

site – typically paired with DG

Lowering or shifting electric usage of

end-use customers at peak or times of

dispatch

Generating electricity 'behind the meter' and on-site where energy is

used

Ability to design, engineer, develop, install and manage all the energy needs of a customer (includes micro-grid)

Integration

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Distributed energy: ~$15B market in 2012, to grow to ~$35B by 2020

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102

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5

8

4

2

3

0

10

20

30

40

Revenue $B

Solar PV - Commercial

Solar PV - Residential

Energy Efficiency

Demand Management Distributed Storage Integration

2020(E)

35

1

2012

14 0 1

+144%

Decentralized Energy Market1 (Base case), 2012 – 2020(E) Key assumptions

• Continued smart grid expansion and penetration of advanced metering

• Net metering in place in key PV markets through 2020

• Growth in dynamic pricing models

• No explicit changes in regional DR expansions

• ITC at 30% through 2016, 10% to 2020

• Energy prices broadly aligned with Duke forecast

• Moderate econ growth

Potential upside of $10-15B above base

case

1. Considering only a subset of decentralized energy markets Sources: EV Power. LBNL, NERC. EIA AEO. Navigant, BCG Analysis

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Distributed energy: 35% capacity growth over last 3 years

2009-2012 US cumulative capacity growth

0

50

100

150 141

21%

38%

28%

3%

Total EE DR

GW

Decentralized Generation

11%

Traditional Generation

(gross adds)

Utility Scale Renewables

35% of capacity growth

Declining Solar Prices Still Beating Analyst Expectations

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0.00

0.05

0.10

0.15

0.20

0.25

1200 1400 1600 1800 2000 2200 2400 2600

UT

TX

WV

CA

AZ

AR

AL

AK

OH

NY

NV

TN

SD

SC RI

PA

OR

OK NM

NJ

NH

NE

ND

NC

MT MS

MO

MN

MI ME

MD

Average electricity price for commercial in 2012 in $/kWh

LA

KY

KS IN

IL ID

IA

FL

MA

DC

CO

Solar irradiation on optimally inclined plane in kWh/m2/year

WY

WI

WA

VT

VA

DE

In many states, commercial PV expected to reach retail parity by 2017

Generation capacity in GW (2010) Commercial grid parity by 2017 at current electricity prices

Iso-LCOE curves at a PV system price1 of

2.80 $/Wp (2012 w/ 30% ITC)

1.8 $/Wp (2017)

1.62 $/Wp (2017 w/ 10% ITC)

4.0 $/Wp (2012)

1. For roof-mounted system 100 kWp; year end prices; does not account for accelerated depreciation benefit Note: Assumptions: Performance ratio of PV system 85%; lifetime 20 years; discount rate 7%; annual OPEX as percentage of initial CAPEX 1%; assumed electric prices grow at inflation Source: Solar Electricity Handbook (online); IEA Electricity Information 2011; LBNL; NREL database; BCG analysis

HI

Note: actual electricity price by customer has large range based on

consumption level, TOU, etc.

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0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600

Slovakia Hungary

Czech Poland

Bulgaria

Romania Turkey South Africa

Average electricity price for households in 2012 in $/kWh (excluding VAT)

Hawaii

India

California

Spain

Texas

Australia

Greece

Japan

China

Italy

France New York

South Korea

Germany

Netherlands

UK

Finland

Sweden

Norway

Belgium

Solar irradiation on optimally inclined plane in kWh/m2/year

Global PV market growing as more countries reach retail parity

1. For a 10kW roof-mounted system; mature PV market; price excl. VAT Assumptions: Performance ratio of PV system 85%; lifetime 20 years; discount rate 8%; annual OPEX as percentage of initial CAPEX 1%; exchange rate €1.00 = $1.30 Source: Joint Research Centre of the European Commission, NREL; PVGIS; BCG analysis

Size of electricity market in TWh (2012)

Residential grid parity by 2013 at current electricity prices

Iso-LCOE curves at a PV system

price1 of

2.9 $/Wp

1.9 $/Wp 1.6 $/Wp

Note: actual economics depends on price for PV generated energy

(e.g. FiT, net metering)

Storage for Commercial Customers

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• Demand management software combined with storage hardware • Automated demand reduction • Solar smoothing • Grid support

Advanced Energy Management Landscape

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Lighting

HVAC

Enterprise Software & Services

HVAC Controls

Lighting Controls

Utility Bill Management

Enterprise Energy Information

Supply Advisory

Virtual Audits

Building Controls Hardware

Demand Response Aggregator On-site DER

Chorriaca Hybrid Wind-Diesel System

• 100 kW of new wind generation • Hybrid system with existing 120kW

diesel generation • One to three turbines, depending

on economics of final contractor proposals

• Annual fuel savings: 58,386 liters

Mini hydro at Coyuco-Cochico

Diversion weir Settling basin

Penstock

Power house

Road

Bridge

Transmission line

Diversion weir Gabion weir, height=2m

Intake Side intake type with a sluice gate

Settling basin and head tank

Open type, length=9.8m, width=5m, with spillway for excess water

Penstock and spillway

Reinforced PVC pipe k6, diameter= 500mm, length=160 m. Underground

Power house 30m2 pre-assembled concrete. Located 1620 masl, 2 m above average water level.

Turbine and Generator

Cross-flow turbine (Mitchell-Banki). Impeller diameter 400 mm. Synchronous generator 400 VCA brushless with AVR

Transmission line 13.2 kVA Lenght=3.7 km and 2 transformers 04/13.2 kV – 200 kVA

Intake Height (m) 24.1

Flow (l/s) 600

Penstock net diam.(mm)

470

Hydraulic loss (m) 2.44

Net Height (m) 21.6

Generator efficiency

90%

Turbine efficiency 75%

Power output (kW) 86

Annual generation (MWh)

753

Annual fuel saved (lts)

23,796

Transmission line Mini-hydro

Distributed Energy Benefits – United States

• Lower carbon emissions • Solar and energy efficiency = zero CO2 emissions • One study: Major California city could decrease carbon emissions by

70% by growing DER by 2% per year

• System benefits • Reduced transmission losses • Grid Support • Greater resiliency

• Reduced Consumer Costs

• Customer Choice

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