The document discusses the evolution of the utility industry towards a more diversified and distributed energy future, emphasizing the growth of distributed solar and the integration of technologies such as combined heat and power (CHP) and microgrids. It highlights customer demand for renewable energy choices, the importance of policymakers in supporting distributed energy resources (DERs), and the potential of electric vehicles and energy storage to enhance grid reliability. The document concludes with insights on regulatory environments and market competition in the DER sector.

1. Interruption in the Utility Industry?
PUCO EnergyTech Conference
November 30, 2015

2. A More Diversified and Increasingly Distributed Energy Future
Distributed resources will co-exist with central station
generation. An integrated grid will be required for system
optimization.
Technology development is advancing at unprecedented
rate. Innovations in telecom, IT and energy storage will
drive further evolution.
Our customer’s desire for more choices - and their
expectations - are growing.
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3. Solar is a distributed resource that is rapidly changing our business
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4. Rapid Growth Expected for Distributed Solar PV in the U.S.
Drivers: Declining PV costs, increasing utility rates, state renewable
energy policies, federal tax credits, innovative financing options for
customers, NEM. 4
Distributed PV rises steadily
despite ITC stepdown

5. State policies continue to influence solar development
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6. Beyond Solar: A Diversified Portfolio of Distributed Energy Resources
Large Solar Microgrids PEV
Combined
Heat &
Power (CHP)
Energy
Storage
Demand Side
Management
Wind
Charging
Stations
Rooftop
Solar
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Supply Side
Resources
Integrating
Resources
Demand Side
Resources

7. Combined Heat and Power (CHP)
Natural gas generation is something utilities understand well. Combined-heat and-
power (CHP) is a smaller natural gas turbine where waste heat is used to make steam
for a host (same technology as a combined cycle plant).
 Customers want it
 Potential to be the lowest cost generation asset on the grid
 Significant reduction in CO2 emissions
 Improved reliability
 Much faster development cycles
 Reduces T&D losses
 Customer retention for industrials
 Economic development
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8. Microgrids
 CHP is a complementary product for microgrid and distributed energy resource
offerings
 A microgrid is a localized energy system that comprises local generation, storage,
distribution, and consumption that can operate with - or independently from - the
broader system.
 District energy is a microgrid that also provides steam and/or cooling, in addition to
electricity, to the end customers
 CHP is a growing product that can offer customers additional benefits around
reliability, resiliency, and sustainability
 Duke-owned CHP developments will enable greater participation in microgrid
services
 Customers benefit from coordinated site development
 Company benefits from increased revenue channels
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9. Electric Vehicles
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 Provide safe, reliable, affordable and clean electricity to power the movement of
people and goods
 Advance the infrastructure and technology to facilitate transportation electrification
 Support our customers as the new fuel provider
Focus Areas:
Utility Readiness Customer Support Fleet Integration Education, Outreach
& Collaboration

10. Potentially transformative to a utility:
 Potential to manage short term grid variations more
efficiently
 Support increased grid reliability
 Support reliable distributed grid concepts (e.g.,
microgrid)
 May avoid or defer construction of new peaking plants
 Reduce power system demand peaks and valleys to
reduce system costs
Storage is accomplished by devices or systems that manage
the availability of energy across time
Energy Storage
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11. Key Takeaways for Transitioning to a Distributed Energy Future
Public policy positions should be proactive, collaborative, and comprehensive
Traditional regulatory system planning does not resonate with increasing
numbers of customers; they want more choices for renewable energy; and the
option to use renewable energy themselves.
The DER market is becoming increasingly competitive and utilities need an
opportunity to participate.
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Questions?

13. * States implementing regulations to support planning and deployment of DERs; others will follow
5 STATES ∙ 26 IOUS ∙ 10% OF U.S. ELECTRICITY SALES
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State Regulations on DER Planning

14. ACT 236 and SC Distributed Energy Resource Program
ACT 236 Vision and DER Program Objectives
(1) Work collaboratively to provide access to solar to a wide variety of customers
(2) Successfully integrate solar into SC communities
(3) Reach capacity goals of Act 236 (DE to grow footprint from less than 2 MW up to
170 MW)
Large Scale Solar
Solar PV Procurement
through Requests for
Proposals
Solar Rebate for
rooftop or ground
mounted up to 1MW
$1/per watt-dc
residential and business
Shared Solar
Multiple customers
share in benefits of a
single solar facility

15. Policy case study: Germany
Residential electricity rates are very high relative to U.S.
Net cost is somewhat mitigated by lower usage relative to the U.S.
Low income households are struggling to pay the bills
Incumbent utilities are struggling financially
Continued dependency on coal following state decision to shut down
nuclear
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