Creating The 21 st Century Grid

Creating The 21st Century Grid Global Energy Management Institute Power Conference C. John Wilder Chief Executive Officer June 29, 2006

Global electricity • 20th century’s greatest achievement • Global electrification challenge 21st century power needs • Digitization of advanced economies • Historic lack of investment • Economic cost of outages Grid technology advances Customer benefits of a smart grid • Evolving technology opportunities • Investment requirements • TXU technology examples • Lifestyle improvement • Innovative products and services Today’s Discussion

Electrification Changed The World In The 20th Century, But Faces Significant Challenges In The 21st Century The world’s population is expected to reach 9 billion by 2050; electricity’s global impact must be even greater in the 21st century to meet the world’s growing energy needs

Universal Electrification Could Drive Step Changes In Productivity… Lights out: World population without power 05; Percent (100%=6.5 billion) In demand: Cost required for universal electrification 05; $ trillion Without electricity 12.0 12.2 12.4 With electricity Cost to build 10TW EU GDP 05E U.S. GDP 05E Small price to pay: Cost to modernize grid vs. average electric bill 05; $/month per household Productivity pays: Est. annual GDP increase 25E-50E; $ trillions Avg. bill Cost to modernize grid Source: EPRI Electricity Technology Roadmap

…And Improve Quality Of Life Around The Globe Lower infant mortality… Average infant mortality rate 03; Mortalities per 1000 births …and stronger economic output Average GDP per capita 03; $ per person 80% 829% • Abundant power supply drives better health care and stronger economies Source: EIA, CIA Factbook

The Emerging Digital Economy Is Testing The Limits Of The Current System… • Growing demand: U.S. Electricity consumption 40-03; % of total energy use • Stressed system: Congestion loading relief requests 97-03; Number • Need for technology: “Digital quality” electrical load 80-20; Percent 300% 1,500% 400% • 1,600 • 50 • 40 • 70 • 03 • 80 • 00 • 20E • 97 • 03 • Without greater investment, the existing U.S. system will not reliably support the increasing demand for energy

…Compounded By A Historical Lack Of Investment In R&D And Infrastructure… U.S. investment in energy R&D 90-00; $ billions Private sector R&D investment 95; % of net sales 50% Medi-cine Comm. equip. Svcs. Trans. equip. Chem-icals Energy U.S. federal R&D support for energy is only about 4% of total federal energy R&D outlays Source: EPRI

…Causing Outages That Cost Customers Billions Annually U.S. economic cost of outages $ billions/year • Today, outage costs represent 1% of GDP • This loss represents a cost of $0.50 for every $1 spent on electricity • Technology investments could reduce outage costs by 50-80% • If no investment is made to transform the grid system, the annual cost of outages could reach $300 billion Source: EPRI

A Slate Of Breakthrough Technologies Are On The Horizon… • Stage 3: • Potential future technology • Stage 2: • Near-term technology • Stage 1: • Current technology • Automated switching • Digital fault analysis • Broadband over Power Line • Smart appliances • Power quality monitoring services • Customized power service packages • Advanced load management with smart appliances • AC/DC microgrids • Advanced distributed energy solutions TXU Electric Delivery is investing in today’s leading-edge technology, but more will be required as new “game changers” become commercially available

…Requiring Significant Investment To Realize The Full Benefits Transmission investment needs 05-25E; $ billions Distribution investment needs 05-25E; $ billions Load growth Correcting deficiencies Transformed delivery system Load growth Correcting deficiencies Transformed delivery system To achieve this grid transformation, annual transmission and distribution investment would have to increase by 65% and the 20-year total is over $850 billion

3 Old Way 2 2 1 New Way 3 “Self-Healing” Technologies Will Change The Way We Manage And Respond To Outages… Dispatcher notifies field technician who inspects entire feeder for outage source; average restoration time of 40 mins. Customer calls outage in and Operations Center receives notification Tree limb falls on line causing a feeder outage Automated switches reconfigure system to restore service to majority of customers within 1 min. Disruption location pinpointed and service restored to remaining customers within 24 mins. Where deployed, automation technology enhances customer serviceby eliminating sustained interruptions for 2/3 of the customers and reducing restoration time up to 40% for the remaining 1/3 of the customers

…And Digital Fault Analysis Could Prevent Disruptions… • A tree limb was hanging over a line, causing 17 poletop recloser operations over 23 hours • There were no substation breaker trips, so Operations did not recognize a problem • The tree limb burned down the line, locking out the recloser and interrupting 140 customers for 62 mins. Source: TAMU/EPRI study

…Resulting In Industry-Leading Reliability Performance U.S. electric delivery company performance 05; SAIDI1 • Top quartile cost • Top quartile SAIDI TXU ED’s target • TXU • Distribution O&M and capital cost ($/customer) • TXU Electric Delivery has achieved top quartile cost and reliability 1 Excluding major events and planned outages

TXU Is Redefining Utility Service Enabled By BPL

Advanced Grid Technologies Are Enhancing The Quality Of Life In The Communities We Serve…

…And Unleashing The Potential For Innovative New Products And Services For Customers Yesterday Today Tomorrow (06+) On-site load mgmt Bundled svcs. (data, video) PTB Discount Simple Savings One regulated price Rewards+ Energy efficiency Indexed Savings Term savings Power quality mgmt Surge Protection Renewable Freedom Plan Time of use Market Tracker+ Smart homes Future products will give customers greater choice and control over their energy consumption and costs

Advancements And Investments In Technology Can Provide The Solution To The World’s Energy Needs • The world is facing bigger energy challenges than ever before • Digital economy • World population will increase more than 33% by 2050 • 25% of the world has little or no access to power (and growing) • Investments in technology and infrastructure can provide universal electrification • In the U.S. alone, GDP could increase by $3 trillion • In the world, GDP could increase by $11 trillion • Technology advances will drive benefits for society • Better reliability and power quality • Innovative products and services allowing customer choice and control over energy usage • Improved safety and security of the system

Creating The 21st Century Grid Global Energy Management Institute Power Conference C. John Wilder Chief Executive Officer June 29, 2006

Creating The 21 st Century Grid

Creating The 21 st Century Grid

Presentation Transcript

Creating Schools for the 21 st Century

21 st Century = Biotech Century

21 st Century Teaching for 21 st Century Students

The 21 st Century Learner

Smart Grid Utility Challenges in the 21 st Century

Creating a 21 st Century Electricity System

Creating a 21 st Century Library

Energising the 21 st Century

21 st Century

Creating 21 st Century Colleges for 21 st Century Students

A 21 st Century Resource for the 21 st Century Librarian

The 21 st Century Classroom

Creating a 21 st Century School

THE 21 ST CENTURY SCHOOL

21 st Century?

The 21 st Century Classroom

Creating the Future of CDC for the 21 st Century

The 21 st Century Skills Teacher Supporting the 21 st Century Learner

21 st century

Smart Grid Utility Challenges in the 21 st Century

Creating Church for the 21 st Century

21 st CENTURY