Day 1 june 20 morning and track 1

Scott Clavenna
Greentech Media
Co-Founder and Chairman
Welcome
Questions? Enter them at: gtm.cnf.io #gridedge

Ben Kellison
GTM Research
Director, Grid Research
GTM Research Presentation

Preparing for the Next DER Wave:
Ben Kellison
Grid Edge Innovation Summit: June 21, 2018
Changing Planning and Operational Paradigms to Support Customer
Resources

Grid Edge Innovation Summit 2018
BTM DER are Positioned for Explosive Growth1.

9Grid Edge Innovation Summit 2018
5 Classes of BTM DER Contribute 46.4 GW of Impact on the US Power System Peak
Distributed Solar
• Smart inverters will enable volt/VAR support, curtailment and ramping
Source: GTM Research and Department of Energy
US DER and Connected Device Flexibility Potential,
2017
Small Combined Heat and Power (Under 50 MW)
• 18.5% of all installed CHP capacity
Smart Thermostats
• Nearly 20 million purchased today, offering 8.3 GW of cycled peak demand reduction
Electric Vehicles
• 789 thousand EV purchased through Q4 2018, each with the ability to ramp
charging from 0 kW to 20 kw+
Distributed Energy Storage
• Only 160 MW today, California represents 90% of non-resi and 40% of resi market
44%
34%
18%
4%
Distributed Solar
CHP
Resi Smart Thermostats
Electric Vehicles
Distributed Storage
46.4 GW

0
20
40
60
80
100
120
2017 2018 2019 2020 2021 2022 2023
Impact on Peak Demand (GW)
Distributed Solar CHP Resi Smart Thermostats
Electric Vehicles Distributed Storage
US DER and Connected Devices Impact Expected to More Than Double from 46 GW to 104 GW
46.4
104.2
Source: GTM Research and Department of Energy
US DER and Connected Device Impact on Peak Potential, 2017-2023

Current Attitudes and Initial DER Integration Efforts2.

DERs are No Longer Synonymous with the Utility Death Spiral
42%
3%
55%
Opportunity
Threat
Both a threat and opportunity
Source: West Monroe Partners and GTM Research

The US ‘s Largest Distribution Utilities Continue Increase Investment in Distribution
Infrastructure…
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Structures Station
Equipment
Overhead
Conductors
and Devices
Underground
Conductors
and Devices
Line
Transformers
Meters Street Lighting
and Street
Signals
Millions of $US
2010 2011 2012 2013 2014 2015 2016
Source: FERC Form 1
Net Distribution Plant Additions Among Largest US Utilities
60
%
40
%
Represented
Data Sample (by # of customers)

Over 100 Utilities have Set Up at Least a Basic DER Marketplace
Source: GTM Research
Current DER Marketplace Deployments by Regulated Utilities, Q4 2017
Number of Customers
Vendors
EFI
Simple Energy
Enervee
Internal Development
PlanetEcosystems
Multiple Vendors
3 Million 2 Million 1 Million 500,000
60
million
customers have access to a
utility marketplace

(141 Projects)
1,721MW
19 States are Developing NWA Projects with a Variety of Business Models
Non-Wires Alternatives Capacity and Pipeline by State, Q4 2017
49%
24%
12%
7%
8%

Utility Business Process Design and Enablement2.

Planning and Asset Lifecycle Processes Must Be Augmented to Account for DERs…
Planning Operations O&MCustomer
Interest

…Because While the Concept is Simple, Integrating DER into (Digital) Utility Processes is Hard
Source: “DERMS: A Term Gone Too Far? DER Lifecycle Is Not Limited to DERMS,” GTM Research
Mapping Legacy and New Utility Systems to the DER Lifecycle Process

However, the Results Sets the Foundation to Enable a Variety of DER-Related Capabilities
Develop NWAs and Optimize Infrastructure
Investment,
Market, Sell and Connect DERs
Enhance Reliability, and OthersAddress System-Wide Peaks,

Emerging Technology Will Build on This Foundation to Develop New Transactional Systems
New Applications,New Platforms, New(ish) Technologies, or Other?
Blockchain
AI
Artificial Intelligence
Distributed Intelligence

Conclusion4.

The DER Opportunity is Real, and Utilities Are Working to Secure Part of the Pie
Source: Wood Mackenzie Power and Renewables
Peak Capacity of DERs Covered vs. NYISO Bulk Generation, 2018
Source: Wood Mackenzie Power and Renewables
Peak Capacity of DERs Covered vs. ERCOT Bulk Generation, 2023
40.0 GW 107.1 GW72
54.9 GW 104.2 GW

Interested in other GTM Research products and services? Please visit www.gtmresearch.com or contact sales@greentechmedia.com
Thank You
Grid Edge Innovation Summit: June 21, 2018

Josh
Gould
Con Edison
Department Manager
Sean
Kane
McKinsey &
Company
Associate Partner
Sergej
Mahnovski
Edison
International
Director, Growth &
Innovation
Peter
Muhoro,Ph.D
National Rural
Utilities CFC
Vice President,
Strategic Industry
Research & Analysis
Julia
Pyper
Greentech Media
Senior Editor
M
Building Innovation Centers at Utilities

Yang
Bai
Nest/Google
Technical Lead,
Enterprise Energy
Services
Paul
Breslow,Ph.D
EDF Innovation
Lab, Inc.
Principal, Open
Innovation
Sonja
Glavaski
U.S. Department
of Energy
Program Director,
ARPA-E
Scott
Clavenna
Greentech Media
Chairman
M
Distributed Ledgers & Distributed Intelligence:
How Tech Convergence is Impacting the Grid Edge

Phil
Blythe
Greensync
CEO & Founder
Jan-Willem
Rombouts
Centrica Business
Solutions
Co-Founder, REstore
Arthur
(Bud) Vos
Enbala Power
Networks
President & CEO
Elta
Kolo, Ph.D
GTM Research
Research Manger,
Grid Edge
M
Managing the VPP of the Future: How Utilities are Controlling
DER Technology Through Microgrid Controllers & DERMS

Ronald D.
Critelli, Jr.,P.E.
Florida Power &
Light Company
Senior Director,
Engineering & Technical
Services
Michael
Edmonds
S&C Electric
Company
Chief Commercial Officer
Paulina
Tarrant
GTM Research
Research Associate
M
S&C Electric and Florida Power &
Light Case Study

Resiliency Planning
A story of recovery for customers
Ron Critelli
Senior Director of Engineering & Technical Services
Florida Power and Light Company
Michael Edmonds
Chief Commercial Officer
S&C Electric Company

Sustained Outages
$26,000,000,000
Momentary Outages
$52,000,000,0
00

• Approximately 530 miles of coastline, one of the longest of any U.S. utility
• Florida climate promotes one of the fastest vegetation growth rates in the U.S.
• Salt spray produces corrosive environment
• Lightning capital of North America
• Most susceptible to hurricanes
Service area characteristics challenge us

We invest in our system to make it stronger and
smarter, improving daily reliability

Wilma vs. Irma
Saffir-Simpson Scale Category 3 Category 4
Maximum Sustained
Winds in Florida 120 mph 130 mph
Cyclone Damage
Potential Index* 2.8 4.3
*Index developed by the National Center for Atmospheric Research that rates a storm’s ability to cause destruction
Hurricane winds (74+ mph)
Strong tropical storm winds
(55-73 mph)
Moderate tropical storm winds (39-54
mph) Hurricane Wilma,2005 Hurricane Irma, 2017
FPL Counties Affected 21 35
Customer Impacted 3.2 million 4.4 million
% of FPL Customers 75% ~90%

Wilma vs. Irma
Restoration
Hurricane Wilma,2005 Hurricane Irma, 2017
Customer Restoration 18 days 10 days
75% of Customers Restored 8 days 3 days
50% of Customers Restored 5 days 1 day
95% of Customers Restored 15 days 7 days
FPL restored service to 1 million customers before Irma exited Florida. After one full
day of restoration, FPL restored service to 2 million customers.

Rick
Kubin
Clean Energy
Blockchain
Network
Vice President
M. Maxine
Ghavi
ABB
Group SVP, Market
Development,
Microgrids and Grid
Edge Technologies
Marco
Terruzzin
E.ON
Director, Energy
Storage
Stephen
Lacey
Greentech Media
Editor-in-Chief
M
How do Frontier Technologies Promote Demand
Flexibility, EVs, Storage & the Role of the Consumer?

Daniel Munoz-Alvarez
GTM Research
Analyst, Grid Edge
GTM Analyst Introduction: Innovating the Core:
Existing & Emerging Grid Edge Technologies Overview

Innovating the Core:
Existing & Emerging Grid Edge Technologies Overview
Introduction to Track 1
June 2018
Daniel Muñoz-Álvarez
Analyst, Grid Edge
alvarez@gtmresearch.com

43Grid Edge Innovation Summit - June 2018
Track 1: Existing & Emerging Grid Edge Technologies
Building Innovation Teams for the Future - What Power Companies Need to Know
How utilities are building "utility of the future" teams and investing in new capabilities?
2:30 pm — 3 pm
Fireside Chat with Siemens
3 pm — 3:30 pm
Data Mining - How Utilities are Investing in Data, Digital Analytics & Computer Science
Teams
Experts discuss to extract value from new and existing data and the emerging role of the utility data scientist
4 pm — 4:30 pm
Adapting Business Models - Uncovering Future Revenue Opportunities for Utilities
How utilities are moving from a volumetric business to a services based business?
4:30 pm — 5:15 pm

Grid Edge Innovation Summit - June 2018
Evolving Grid Edge Technologies
Volt/VAR Control & Optimization, DERMS
1.

Defining Elements
• Collection of hardware and software subsystems
• Monitor and control power quality
• Manage voltage and reactive power across distribution network
Goals
• Ensure delivered power quality
• Ensure demanded power quality
• Increase distribution efficiency
• Increase DER hosting capacity
Key Findings from GTM Research on VVC Market
• VVC systems can be classified primarily by
◦ Architecture
◦ Business model
• Evolving VVC systems: From limited, to optimized, to augmented value streams
◦ Traditional
◦ Modern
◦ Emerging
Volt/VAR Control & Optimization (VVC/VVO) Systems
VVC Systems: Architectures, Business Models, and Value Streams
Business
Models
Value
Streams
Reactive Power Compensation
Voltage Regulation
CVR as EE
CVR as DR
DER Integration
Traditional
Modern
Quality of Service
Avoided Energy Costs
Avoided O&M Costs
Deferred Generation Capacity Costs
Deferred T&D Infrastructure Costs
Traditional
Modern
Uncoordinated
Coordinated
Distributed
ModernArchitectures
Traditional
Control
Resources
Electromechanical Devices
Power Electronics Devices
Conventional DG
Inverter-based DER
Traditional
Emerging
Emerging
Modern
Emerging
Emerging

Pilots & Standards Gradually Testing and Requiring Smart Inverters VVC Modes
8 Pilots Across 8 States Testing Smart Inverters for VVC
Standards Are Increasingly Requiring Advanced Smart Inverter
Functionalities
IEEE 1547-
2018
UL 1741
Supplement A
Hawaii
Rule 14H
California
Rule 21
Smart Inverter Control Modes Supporting VVC Systems
Source: EPRI/3002012033 (Nov, 2017) “Voltage Regulation Support from Smart Inverters”
L/H Voltage Ride-Through (VRT)
Volt-Var
Voltage Phase Angle Jump Ride-Through
Dynamic Voltage Support During L/H VRT
Fixed Reactive Power
Fixed Power Factor
Watt-Var
Volt-Watt
Voltage
Support
Function Set Advanced Functions
2014 2015 2016 2018

Key Findings from GTM Research on VVC Market (Continued)
1. Traditional regulation limits monetization of CVR value streams
◦ DSM programs faced similar challenges
◦ Need resource neutral energy efficiency targets
◦ Need revenue decoupling mechanisms
2. VVC systems increasingly justify Grid Modernization/AMI deployments
◦ Reduced distribution losses and CVR provide strong value drivers
3. Emerging focus on increasing DER hosting capacity
Existing Grid Edge Technologies: Key Findings from GTM Research on VVC Market (Cont.)
VVC Systems: Supportive Regulatory & Market Mechanisms
Mandates
Energy Efficiency Targets
Revenue Decoupling Mechanisms
Integrated Resource Planning Requirements
Service Quality Standards
Incentive
Mechanisms
Capacity Market
Performance Penalties
Performance Incentives
Lost Revenue Recovery Mechanisms
8.5%
31.5%
60.0%
Circuits Using CVR Scheme
Non-CVR Circuits w/ High CVR
Potential
Non-CVR Circuits w/ Limited CVR
Potential
Source: GTM Research, EIA, and Pacific Northwest National Lab
GTM Estimates the CVR Adoption Level in US Was 8.5% by End of 2016
Transmission Charges
Market
Mechanisms

Evolving Grid Edge Technologies
DER Management Systems (DERMS)

Evolving Grid Edge Technologies: DER Management Systems (DERMS)
Edge DERMSCentral DERMS
Fleet
DERMS
Wholesale Market
Fleet DERMS
Current Reality of DERMS Offering: Siloed, Incomplete, and Point-Application
Management
Key Findings from GTM Research on DERMS Market
1. DERMS: Better understood as set of functionalities than product
2. Defining elements
◦ Software platform • diverse DERs •
monitor, forecast, optimize, dispatch • multiple objectives
3. DERMS offering fall into three categories
◦ central, edge and fleet
4. Enterprise DERMS solution yet to be seen
5. DERMS vendors target utilities and non-utilities
47%
21%
32%
Fleet
Edge
Central
Half of DERMS Projects Focus on Fleet Applications

U.S. DERMS Deployments: Early Interest Spans Wide Ranges of Geography and Utility Size
• DERMS projects now extend into nearly half of all U.S. states
◦ Significant concentrations of projects in California, Hawaii and New York
◦ Investments in States with high/lower DER penetration
DERMS Projects Cross U.S. With Concentrations in CA, HI, NY
Midsize Utilities Lead in DERMS Project Count
Key
7 projects
5 projects
3 projects
2 projects
1 project
• Utilities of all sizes (not just largest) are investing in emerging DERMS functionalities
◦ Midsize utilities are driving DERMS market development

Adoption Wave of At-Scale DERMS in North America Expected in 2020-2021
Key Findings from GTM Research on DERMS Market
4. Utilities still view DERMS technology as immature
5. Utility DERMS activity driven by
◦ PV adoption
◦ Storage mandates
◦ Regulatory reform
6. Spending on DERMS: Estimated at $380 million over 5 years (2017-2021)
◦ Half spending on pilots
7. Adoption wave of at-scale utility DERMS expected in 2020-2021
Forecasted Spending on DERMS in U.S. and Canada, 2011-2021E
Source: <Insert source>
Cumulative Spending on DERMS by Segment, 2017-2021
$0
$50
$100
$150
2011 2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E 2021E
Annual Value (Millions USD)
Prior Pipeline (approximate) Future Spending (forecasted)
50%
19%
15%
10%
6%
Pilots, all
Full Deployments, small & midsize
utilities
Full Deployments, large utilities
Full Deployments, non-utilities
Deployments, New York
$381 million

Evolving Grid Edge Business Models
Non-Wires Alternatives
2.

0%
20%
40%
60%
80%
100%
0
100
200
300
400
500
1% 10% 20% 29% 38% 48% 57% 67% 76% 85% 95%
Share of Capacity
Capacity (MW)
Total Capacity (MW) Accumulated Capacity (%)
NWA Projects Increased Rapidly in 2015 Driven by Regulatory Initiatives
Evolving Grid Edge Business Models: Non-Wires Alternatives (NWAs)
0
200
400
600
800
1,000
1,200
2008 2009 2011 2012 2013 2014 2015 2016 2017
Capacity (MW)
Identified Implementation in progress
Implemented Not pursued
Solicitation in progress
Source: <Insert source>
10% of NWA Projects Represent Nearly 80% of NWA Capacity
Defining Elements
• Collection of non-infrastructure solutions
◦ Examples: DERs and operational practices (CVR)
• Defer, mitigate or eliminate specific network infrastructure needs
NWAs as a Utility Business Model
• A step towards utility as a services platform
• Formalizes monetization of T&D deferral value
• Can implement market-informed, least-cost distribution planning
• Recent wave of NWA projects in 2015-2017 driven by NY, OR, CA
Vermont
New
York
CA, OR
Average 14 MW / Median 2 MW

65%
16% 5%
5%
3%
2%
1%
1% 1% 1% 0% 0% 0% 0%
19%
TBD
Energy Efficiency
Wind
Storage
Demand Response
DG (TBD type)
Natural Gas
Solar PV
Diesel
CVR
CHP
Biofuel
30%
21% 20%
15%
14%
Implementation in progress
Not pursued
Identified
Implemented
Solicitation in progress
NWA is Emerging in the U.S. as Business Model with a Promising Pipeline
NWA Capacity by Project StatusKey Findings from GTM Research on NWAs
• Current pipeline is 1.4 GW of NWA capacity from 105 projects
◦ Identified or in progress (solicitation/implementation)
• Energy efficiency measures historically dominate the resource mix
◦ Question is whether mix will change in coming years
NWA Capacity by Technology
2,2 GW
(155 Projects)
1,7 GW
(142 Projects)

Regulatory Initiatives Unlock the NWA Business Model in the U.S.
NWA Projects in 22 StatesKey Findings from GTM Research on NWAs (continued)
• NWA projects historically driven by regulatory compliance
◦ Project waves come after large regulatory initiatives
• Recent NWA regulatory initiatives driven by
◦ Cost reduction/competitiveness of DERs
◦ Improvements in DER supporting services/analytics
• NWA programs characterized by 4 components
◦ Regulatory drivers, revenue streams, sourcing
mechanisms, planning
92% of NWA Capacity Comes From 4 States
58%
19%
9%
6%
2%
1%
1%
1%
1%
0%
0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
8%
New York
Oregon
Vermont
California
Indiana
Michigan
Massachusetts
Washington
Ohio
Nevada
Maryland
Connecticut
1,7 GW
(142 Projects)
Proceeding/IRP where NWA raised
Proceeding/IRP with NWA Screening criteria
In-Progress Comprehensive NWA Proceeding
Comprehensive NWA Proceeding
NWA Legislative or Regulatory Policy in 17 States
DC

Emerging Grid Edge Technologies
Intelligence Layer: Data Platforms and Analytics Applications
3.

Data Platforms and Network & Customer Analytics Applications
0
20
40
60
80
100
120
140
160
180
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Deployment Count
Grid Edge Customer Analytics Grid Edge Network Analytics
Utility Back Office
0
100
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Deployment Count
Data Management Visualization Enterprise Analytics
0
50
100
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Deployment Count
Energy Efficiency Engagement Outage Communications
Segmentation & Targeting Revenue assurance
Rate & Pricing Optimization
0
50
100
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Deployment Count
Distribution O&M Predictive Outage & Reliability
Forecasting DER Planning and Simulation
EV Analytics
Irene Tropical
Storm
October Nor’easter
Hurricane Sandy

• Last decade: Investments on technology enabling layer
◦ VVC systems and DERMS
• Last five years: Designing business models for the utility of the future
◦ Non-wires alternatives
• Last few years: Developing intelligence layer
◦ Data platforms and analytics applications
Existing & Emerging Grid Edge Technologies: Key Takeaways

Track 1: Existing & Emerging Grid Edge Technologies
Building Innovation Teams for the Future - What Power Companies Need to Know
How utilities are building "utility of the future" teams and investing in new capabilities?
2:30 pm — 3 pm
3 pm — 3:30 pm
Data Mining - How Utilities are Investing in Data, Digital Analytics & Computer Science
Teams
Experts discuss to extract value from new and existing data and the emerging role of the utility data scientist
4 pm — 4:30 pm
Adapting Business Models - Uncovering Future Revenue Opportunities for Utilities
How utilities are moving from a volumetric business to a services based business?
4:30 pm — 5:15 pm

Interested in other GTM Research products and services? Please visit www.gtmresearch.com or contact sales@greentechmedia.com
June 2018

Juan Manuel
Alzate
Celsia
Chief Innovation
Officer
Debra
Roepke
NRECA
SUNDA Project
Manager, Business &
Technology Strategies
Division
Lisa
Salley
American
PetroleumInstitute
President, Energy
Systems & Safety
Institute
David
Groarke
IndigoAdvisory
Group
Managing Director
M
Building Innovation Teams for the Future:
What Power Companies Need to Know

Michael
Carlson
Siemens Digital
Grid US
President
Ben
Kellison
GTM Research
M

Cassie
Bowe
Energy Impact
Partners
Associate Vice
President
Christophe
Defert
Ventures
Vice President,
Centrica Innovations
Kyle
Garton
AutoGrid Systems
Director, Product
Development
Jeff St.
John
Greentech Media
Senior Editor
Data Mining: How Utilities are Investing in Data,
Digital Analytics & Computer ScienceTeams
M

Sonia
Aggarwal
EnergyInnovation
Vice President
Doug
McMahon
New YorkPower
Authority
Vice President,
Strategy
Jim
Taylor
Siemens Energy
Management,
Digital Grid
Vice President,
Energy Solutions
Jon
Wellinghoff
Grid Policy Inc.
CEO & Founder
Daniel
Munoz-
Alvarez
Greentech Media
Analyst, Grid Edge
M
Adapting Business Models: Uncovering Future
Revenue Opportunities for Utilities

Day 1 june 20 morning and track 1

Day 1 june 20 morning and track 1

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