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Preparing for a post carbon future
1. 25th Annual
Global Power Markets
Conference
Brave New World
Preparing for a Post-Carbon Future
April 11 – 13, 2010
Las Vegas, Nevada
Peter Maloney
Chief Editor, Platts Global Power Report
2. Global Power Markets 2010: CEO Round Table
US Climate change/energy bills
Bill Number Sponsor(s) Cap & trade Status Comment
American Clean
Energy and
passed out of
Security Act H.B. 2454 Waxman-Markey yes
House June 26
Clean Energy Jobs
and American
Power Act S. 1733 Kerry-Boxer yes
passed out of Env.
& Pub. Works
Comit. Nov. 5
Dept. of Ag.
Handles offsets
American Clean
Energy Leadership S. 1462 Bingaman no
passed by Energy
& Nat. Res. Comit.
June 17 energy only
Clean Energy
Partnerships Act S. 2729 Stabebnow no
referred to Sen.
Env. & Pub. Works
Comit. outline for offsets
Clean Energy Act S. 2776 Alexander-Webb no
introduced Nov. 1,
2009
nuclear power,
loan guarantees
Carbon Limits and
Energy for
American's
Renewal Act S. 2877 Cantwell-Collins no
introduced Dec.1,
2009; referred to
finance committee cap and dividend
draft na
Kerry-Graham-
Liebermann unknown draft
3. Global Power Markets 2010: CEO Round Table
Climate Hot Air Index
250
200
150
100
50
0
105th
(1997-98)
106th
(1999-00)
107th
(2001-02)
108th
(2003-04)
109th
(2005-06)
110th
(2007-08)
Congress
legislative initiatives
4. Global Power Markets 2010: CEO Round Table
Electricity demand
three year rolling average % growth
12
10
8
6
4
2
0
-2
1950
1960
1970
1980
1990
2000
2010
2020
2030
Source: Energy Information Administration
Period Annual growth
1950s 9.8
1960s 7.3
1970s 4.7
1980s 2.9
1990s 2.4
2000-2008 0.9
2008-2035 1.0
5. Global Power Markets 2010: CEO Round Table
Spot on-peak power prices
300
250
200
150
100
50
0
3/3/2008
5/3/2008
7/3/2008
9/3/2008
1/3/2009
3/3/2009
5/3/2009
7/3/2009
9/3/2009
11/3/2008
11/3/2009
1/3/2010
$/MW-month
Mass Hub
PJM Western Hub
NI Hub
Into Southern
SP15
Spot natural gas prices
18
16
14
12
10
8
6
4
2
0
3/3/2008
5/3/2008
7/3/2008
9/3/2008
1/3/2009
3/3/2009
5/3/2009
7/3/2009
9/3/2009
11/3/2008
11/3/2009
1/3/2010
$MMBtu
Algonquin
Columbia Gas App
SoCal Gas
Chicago
Transco Zone-3
A double whammy on pricing
6. Global Power Markets 2010: CEO Round Table
Recipients of cash grants in lieu of PTCs under the ARRA
total awards as of April 2010, $3 billion
• Acciona
• AES Corp.
• Cannon Power
• enXco
• E.ON
• Eurus
• EverPower
• First Wind
• Heritage Sustainable Energy
• Horizon Wind Energy
• Iberdrola
• Invenergy
• John Deere
• NaturEner
• Next Era Energy Resources
• Puget Sound Energy
• Valero
7. Global Power Markets 2010: CEO Round Table
Federal loan guarantee commitments
• Kahuku Wind Power, $117 million, wind farm
• SAGE Electrochromics, $72 million, energy efficient window factory
• BrightSource Energy, $1.4 billion, solar power project
• Vogtle (Georgia Power, Oglethorpe Power, Municipal Electric Authority of Georgia,
Dalton, Ga. ), $8.3 billion, two nuclear power units
• Solyndra, $535 million, cylindrical solar PV panel factory
• Beacon Power, $43 million, flywheel energy storage plant
• Nordic Windpower, $16 million, wind turbine assembly factory
• Red River Environmental Products, $245 million, activated carbon factory
• Ford Motor, $5.9 billion, more fuel efficient cars
• Nissan, $1.4 billion, electric cars and battery packs
• Tesla Motors, $465 million, battery packs and electric drive trains
• Fisker Automotive, $528.7 million, plug-in hybrid vehicles
8. Global Power Markets 2010: CEO Round Table
Power plants under construction in the US, by fuel
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2009 2010 2011 2012 2013
MW
COAL
Natural Gas
Nuclear
Solar
WIND
9. Global Power Markets 2010: CEO Round Table
Power plants in development, by fuel
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
MW
COAL
Natural Gas
Nuclear
SOLAR
WIND
10. Global Power Markets 2010: CEO Round Table
Brave new technologies
• Smart grid technologies
• Demand side management and energy efficiency
• New solar panels and solar cells
• Carbon capture and storage
• Flywheel storage
• Battery storage
• Electric vehicles
• Hybrid vehicles
11. Global Power Markets 2010: CEO Round Table
David Crane,
President, Chief Executive Officer
12. Global Power Markets 2010: CEO Round Table
12
South Central
Western
Northeast
Texas
Combined Scale1
Gas
2,130MW
99%
Oil
3,715 MW
53%
Gas
1,430 MW
20%
Coal
1,870 MW
27%
Coal
7,560 MW
32%
Oil
3,715 MW
16%
Nuclear
1,175 MW
5%
4,180 MW
Wind
345 MW
3%
Nuclear
1,175 MW
10%
Coal
Gas 37%
5,640 MW
50%
1 Includes 115 MW as part of NRG’s Thermal assets. For combined scale, approximately 2,095 MW is
dual-fuel capable. Reflects only domestic generation capacity as of December 31, 2009
Gas
10,660 MW
Renewables 45%
365 MW
2%
Solar
20 MW
<1%
Coal
1,495
MW
52%
Gas
1,355 MW
48%
13. Global Power Markets 2010: CEO Round Table
13
Platt’s 2007 Recipient of Energy Company and Industry Leader of the Year
Fuel
Supply
Fortune 500– Ranked 12th Fastest Growing Company (2009)
Fortune 500– Ranked in top 10% for “Best Investment” (2008)
NRG: The center of the power industry value chain.
Fuel
Transportation
NRG
Power
Generation
Reliant Energy
Transmission Distribution Retail
(Customer)
• Oil, gas, coal
companies
• Common carriers:
Pipelines, Trains,
Ships
• Investor and
Government Owned
Utilities
• Merchant Generator
(NRG, etc.)
• From Generator
to Distribution
substation
• From Distribution
substation to
home or business
• Residential,
commercial, and
industrial
NRG US Wholesale generation
totaling 23,475 MW (1)
• 10,660 MW gas
• 7,560 MW coal
• 3,715 MW oil
• 1,175 MW nuclear
• 365 MW renewables
(1) MW data as of December 31, 2009
Listed: NYSE (NRG)
Market Cap.: ~$6 billion; Employees: ~4,300
Generating Assets: ~23,500 MW, primarily in four domestic regions
14. Global Power Markets 2010: CEO Round Table
14
Fossil fuels go to the customer, customers need to go to Renewables
Resource
Dark=Higher
Light=Lower
Renewables are:
• Smaller
• Broader
• More local
• Situationally dependent
Wind
Wind, Solar
Distributed
MAB1
Biomass CHP
Plasma
Biomass
Corridor
Regional
Centers of
Excellence
Solar
PV
Solar
CSP
15. Global Power Markets 2010: CEO Round Table
Jack A. Fusco ,
Pre side nt, Chie f Exe cutive Office r
16. Global Power Markets 2010: CEO Round Table
Southeast
6,104 MW
25%
North
3,350 MW
14%
West
7,854 MW
31% Texas
7,487 MW
30%
Baseload
4,080 MW
16%
Peaking
5,145 MW
21%
Intermediate
15,570 MW
63%
National Portfolio of nearly 25,000 MW
17. Global Power Markets 2010: CEO Round Table
Calpine is the nation’s largest baseload renewable, natural gas
Calpine is the nation’s largest baseload renewable, natural gas
and cogeneration power provider
and cogeneration power provider
Modern
-
50
40
30
20
10
CPN DYN RRI NRG MIR
Age (Years)
Efficient
Source: Energy Velocity (2008). Not adjusted for steam, and excluding non-fossil
fuel generation.
2,500
2,000
1,500
1,000
500
-
100,000
80,000
60,000
40,000
20,000
14,000
12,000
10,000
8,000
Note: All DYN figures are shown pro forma, adjusted to reflect estimated impact of the sale of certain assets to LS Power during 2009.
CPN DYN MIR NRG RRI
CO2 lbs. / MWh
Clean
-
CPN NRG DYN RRI MIR
2008 Generation (MWh)
Scale
Source: Energy Source: Energy Velocity (2008). Velocity (2008).
Source: 2008 SEC filings, Energy Velocity.
6,000
CPN DYN RRI NRG MIR
Heat Rate (btu/KWh)
Our steam-adjusted heat
rate is 7,231
18. Global Power Markets 2010: CEO Round Table
Trend Impact on
CCTG Fleet
Calpine: Calpine: P Poossititioionneedd f foorr t thhee F Fuuttuurree
Impact on
Coal Fleet
19. Global Power Markets 2010: CEO Round Table
Michael G. Morris,
Chairman, President and CEO
20. Global Power Markets 2010: CEO Round Table
Serving 5.2 million
customers in 11 states
2009 Earnings Contribution
Columbus
Southern
Power
20%
Appalachian
Power
13%
All Others
6%
Indiana &
Michigan
16%
Public
Service of
Oklahoma
5%
Southwestern
Electric
Power
9%
Texas
7%
Kentucky
Power
2%
2009 Retail Load Fuel Mix**
Residential
32%
Commercial
27%
Wholesale *
11%
Nuclear
6%
Natural Gas
22%
Hydro/Wind
6%
** Based on Capacity
AEP’s Regulated Utility Platform
Ohio
Power
22%
Industrial
30%
* Wholesale includes sales to municipal
and cooperative power systems, other
wholesale, and other retail sales
Coal 66%
21. Global Power Markets 2010: CEO Round Table
SSPPPP EERRCCOOTT PPJJMM PPJJMM//MMIISSOO
Prairie Wind COD: 2013-14
110 miles of 765 kV
Partners: Westar (50%) & Electric
Transmission America (50%)
Estimated Cost: $400 million
ROE: 12.8%
Tallgrass COD: 2013-14
AACCTTIIVVEE
PPRROOJJEECCTTSS
Pioneer COD: 2015
FFUUTTUURREE
DDEEVVEELLOOPPMMEENNTT
ETT COD: 2010-2017
345 kV ERCOT Expansion
Partner: MidAmerican Energy (50%)
Estimated Cost: $1.4 billion
ROE: 9.96%
170 miles of 765 kV
Partners: OG&E (50%) & Electric
Transmission America (50%)
Estimated Cost: $500 million
ROE: 12.8%
PATH-WV COD: 2014
275 miles of 765 kV
Partner: Allegheny Energy (50%)
Estimated Cost: $1.2 billion
ROE: 14.3%
240 miles of 765 kV
Partner: Duke Energy (50%)
Estimated Cost: $1 billion
ROE: 12.54%
SPP EHV Overlay
Regional Expansion of 765 kV Backbone
SMARTransmission Study
Interregional EHV & Wind Integration
Study
Partners: ATC, Exelon, MidAmerican
Energy, Northwestern Energy, Xcel
Energy
ETT COD: various
Additional CREZ spend of ~ $1.1 billion (COD
2012-2013, subject to a 6-month routing
approval)
Other Projects Pending Transfer of ~ $600
million (COD 2010-2013)
PJM Expansion
Regional Expansion of 765 kV, 500 kV
and 345 kV systems
EHV Michigan/Ohio
700 miles of Proposed 765 kV
SSPPPP EERRCCOOTT PPJJMM PPJJMM//MMIISSOO
23. Global Power Markets 2010: CEO Round Table
Zin Smati,
President, Chief Executive Officer
24. Global Power Markets 2010: CEO Round Table
24
EE uu rr oo pp ee
RReevveennuuee:: €€6688..66 bbnn
118811,,992200 eemmpp..
Leader in Electricity
World’s largest IPP
#5 power producer in Europe
Committed to renewables: 13GW of
renewable production at present
NN oo rr tt hh
AA mm ee rr ii cc aa
RReevveennuuee:: €€44..66 bbnn
55,,330000 eemmpp..
Leader in Natural Gas
#1 purchaser in Europe
#1 transporter and distributor in Europe
#2 operator of European storage
Leader in LNG
Trans-Atlantic leader in LNG industry,
largest LNG tanker fleet
#1 importer & buyer in Europe
#1 importer into the U.S.
SS oo uu tt hh
AA mm ee rr ii cc aa
RReevveennuuee:: €€22..66
bbnn 33,,005500 eemmpp..
AA ff rr ii cc aa
RReevveennuuee:: €€00..99
bbnn
33,,553300 eemmpp..
AA ss ii aa &&
PP aa cc ii ff ii cc
RReevveennuuee:: €€33..22 bbnn
66,,220000 eemmpp..
2009 revenues: €€7799..99 bbiilllliioonn 2009 EBITDA: €€1144..00 bbiilllliioonn
Global workforce: 220000,,000000 eemmppllooyyeeeess Worldwide Generating Capacity: 7722,,666633 MMWW
25. Global Power Markets 2010: CEO Round Table
25
Current Fuel Mix
Power Generation
Coal
12%
Gas
67%
Renewable
21%
Northeast
•Power Generation
•LNG Importation
•Gas Sales
•Retail Sales
Canada
•Power
Generation
•Operate 2 of
the largest wind
farms in eastern
Canada
Texas •RECs
•North American
HQ
•Power
Generation
•Gas Storage
•Retail Sales
Current Geographic Mix
Power Generation
TX
14%
Southeast
Others
12%
Northeast 28%
46%
Mexico
•Gas LDCs
•Gas Pipelines
•Gas Sales
•Power
Generation
One of the largest IPP’s
#3 biomass generator in U.S.
#1 private gas transmission
company and #2 LDC in Mexico
#1 importer of LNG in U.S.
#2 C&I electricity retailer in U.S.
Office
Power Plant
Renewable
LNG Regas
E & P Region
26. Global Power Markets 2010: CEO Round Table
26
How Is GDF SUEZ Positioning Itself
in North America for the Future?
Buy vs. Build
Based on current economic circumstances – Buy more than Build to deepen and
diversify
•There are a number of good opportunities in the energy sector.
Natural Gas
Natural gas is the energy of choice to drive transition to a low-carbon economy.
• Solidify our LNG and natural gas stronghold positions in New England and
Mexico through existing and new gas supply and sales opportunities.
• Continue growing in natural gas-fired generation (recent GDF SUEZ example:
Astoria Energy I and II).
Renewables
Renewable energy is a strategic commitment of GDF SUEZ. We will develop both
greenfield and acquisition opportunities to increase our renewable energy presence.
• Further improve the carbon position of our fleet.
• Avail ourselves to stimulus funding in U.S. and RFPs in Canada and Mexico.
27. Global Power Markets 2010: CEO Round Table
27
25th Annual
Global Power Markets Conference
Questions?
Brave New World
Preparing for a Post-Carbon Future
April 11 – 13, 2010, Las Vegas, Nevada