Electricity Technology in a Carbon-Constrained Future

1. Electricity Technology in a Carbon-Constrained Future February 2007 Steven SpeckerPresident and CEO

2. Context • Growing scientific findings and public opinion that GHG emissions are contributing to climate change… • Priority of 110th Congress … • U.S. responsible for 1/4 of worldwide CO2 emissions… • Electric utilities responsible for 1/3 of U.S. CO2 emissions… • Agreement that technology solutions are needed… …But What is Feasible???

3. Total U.S. Electricity Generation: 2005 EIA 3826 TWh

4. Total U.S. Electricity Generation: 2030 EIA Base Case 5406 TWh

5. U.S. Electricity Sector CO2 Emissions • Base case from EIA “Annual Energy Outlook 2007” • includes some efficiency, new renewables, new nuclear • assumes no CO2 capture or storage due to high costs  Using EPRI deployment assumptions, calculate change in CO2 relative to EIA base case

6. Technology Deployment Targets • EPRI analysis targets do not reflect potential regulatory and siting constraints. Additional economic modeling in progress

7. Benefit of Achieving Efficiency Target 9% reduction in base load by 2030 EIA Base Case 2007

8. Benefit of Achieving Renewables Target 50 GWe new renewables by 2020; +2 GWe/yr thereafter EIA Base Case 2007

9. Benefit of Achieving Nuclear Generation Target 24 GWe new nuclear by 2020; +4 GWe/yr thereafter EIA Base Case 2007

10. Benefit of Achieving Advanced Coal Generation Target 46% efficiency by 2020, 49% efficiency by 2030 EIA Base Case 2007

11. Benefit of Achieving the CCS Target After 2020, all new coal plants capture and store 90% of their CO2 emissions EIA Base Case 2007

12. Benefit of Achieving PHEV and DER Targets 5% shift to DER from base load in 2030 PHEV sales = 10% by 2017; 30% by 2027 EIA Base Case 2007

13. CO2 Reductions … Technical Potential* EIA Base Case 2007 * Achieving all targets is very aggressive, but potentially feasible.

14. Total U.S. Electricity Generation: 2030 Advanced Technology Targets 5401 TWh

15. Total U.S. Electricity Generation: 2030 EIA Base Case 5406 TWh

16. Key Technology Challenges • Smart grids and communications infrastructures to enable end-use efficiency and demand response, distributed generation, and PHEVs. • A grid infrastructure with the capacity and reliability to operate with 20-30% intermittent renewables in specific regions. • Significant expansion of nuclear energy enabled by continued safe and economic operation of existing nuclear fleet; and a viable strategy for managing spent fuel. • Commercial-scale coal-based generation units operating with 90+% CO2 capture and storage in a variety of geologies. The U.S. electricity sector will need ALL of the following technology advancements to significantly reduce CO2 emissions over the coming decades:

17. Backups

18. Generation Portfolio: 2010-2015 Levelized Cost of Electricity, $/MWh 100 IGCC 90 Wind@29% CF 80 NGCC@$6 Biomass 70 PC Nuclear 60 50 40 Rev. 01/16/07 30 0 10 20 30 40 50 Cost of CO2, $/metric ton

19. Generation Portfolio: 2020-2025 Levelized Cost of Electricity, $/MWh 100 90 80 70 NGCC@$6 PC w/capture 60 50 Nuclear Biomass Wind 40 IGCC w/capture Rev. 01/16/07 30 0 10 20 30 40 50 Cost of CO2, $/metric ton

20. Intelligent Electricity Delivery Infrastructure Four Building Blocks Communications Infrastructure Innovative Regulation and Rates Innovative Markets Efficient and Smart Electrical Devices AC DER PHEV