GO15 Reliable & Sustainable Power Grids

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1 Travis Rouillard Markets & Distributed Resources GE Grid Solutions GO15 Reliable & Sustainable Power Grids April 13, 2016 Corporate Enterprise February

2 2040 GLOBAL POPULATION: 9 billion INCREASED RENEWABLES MIX CLEAN RENEWABLES 54 % will account for of the GLOBAL POWER GENERATION CAPACITY AFFORDABLE & EFFICIENT POWER SOLAR COST WILL FALL BY 48% TO POWER COUNTRIE developing S IMPROVED GRID RELIABILITY OF DISTRIBUTED POWER to be installed globally FOR IMPROVED RELIABILITY 438GW WORLD ENERGY DEMAND set to GROW BY 78% BY 2040 Source: NASA/DMSP/DNI with GE forecasted industry data, IEA, Bloomberg New Energy Finance, Platts, Deloitte

3 Grid Solutions A GE and Alstom joint venture, to provide utility solutions that bring power reliably and efficiently from the point of generation to the end consumers. Helping to meet growing energy demands Improving grid resiliency and energy efficiency Upgrading and digitizing aging infrastructure Enabling renewables and a diversified energy mix Over 200 yrs combined experience

4 Grid Solutions Serving 90% of power utilities worldwide North America $1,300M (21%) Latin America $600M (10%) Western Europe & Africa $900M (15%) Central Europe $450M (7%) India $550M (9%) Middle East & Central Asia $1,000M (16%) Global HVDC $700M (11%) China, East Asia & Pacific $700M (11%) Global $6.2B* business with over 20,000 employees with a winning combination of talents in around 80 * Does not include Countries unconsolidated JV

5 Grid Software Solutions GE is the market leader in grid operations and control room software solutions N 1 Energy Management Systems N 1 Market Management Systems N 1 Distribution Management Systems N 1 Geospatial & Mobile Systems N 1 Wholesale Demand Response N 1 Phasor-based Grid Stability Solutions N 2 Utility Communications 5

6 Our software is helping to transform the electricity value chain into a two-way grid Increase network carrying capacity for renewables Run legacy assets more reliably and profitably Use storage for peak shifting, reserves, and regulation Run the grid closer to true real-time limits Support prosumer energy exchange at the grid edges Leverage prosumer flexibility for local ancillary services

7 Software for Wholesale Electricity Markets Network Model Management Energy Management System Market Management System Industrial Residential Commercial Day-Ahead Market Real-time Balancing Market Aggregator Look Ahead UC/Dispatch DSO Marketer Retailer Forward Capacity Market Financial Transmission Rights TSO RTO / ISO Exchange Study and Training Tools DR/DER Management Performance and Settlements Operational and Market Analytics GENCO Marketer kwh info contract

8 Market Software Axes of Change Vertical Alignment Gas/fuel coordination Outage planning Retail price signaling Regional Coupling Reduce seams Network model coordination Improve reserve sharing Operations Reduce market intervention Operate closer to dynamic limits Ensure regulatory compliance Improve transparency New Resources Enhanced combined cycle Grid scale storage Distributed energy resources Product Variation Capacity reserve options Unbundled ancillary services Volatility hedging products Multiple regulation classes

9 DR & DER in Wholesale Energy Markets Opening markets to direct participation can incentivize investment Wholesale Capacity, Energy, and Ancillary Service Markets Offers Aggregator Offers Lower marginal prices Lower capacity reserves Defer capacity investments Enhance reliability Clean energy shift Offers Bulk Generation

10 DER Integration Challenges Traditional markets not designed to handle direct retail integration Traditional Generation Distributed Resources =? Resource volumes and change Forecasting and residual intermittency Dispatching constraints and granularity Automation and telemetry Performance M&V and penalties

11 DER Market Operation Processes Lessons learned from wholesale demand response markets Multiple programs, products, & regional rules Resource qualification, provisioning, and testing Aggregate into virtual power plants; grouped by location, capability, counterparty Commercial and network modeling of VPPs Track available flexibility ie, virtual nameplates Telemetry and dispatch communications to each counterparty and resource outside of SCADA Monitor per-resource and aggregate VPP response Collect actual meter data for each resource Calculate historical baselines, subtract load, and estimate the virtual power plant generation Adjust schedule imbalances of other counterparties Reconstitute avoided or phantom system load

12 Software for Transactive Energy Markets Central Markets Local Markets Price responsive load Peak/valley shifting Emergency capacity Interruptible generation Local ancillary services Demand response Backup generation Smart PV inverters Energy storage Microgrids Grid Edge Intelligence

13 Key Complexity: Tri-Party Relationships Aggregator only represents part of the load or resource Balancing Response VPP Offers Aggregator Transmission Supply Offers Market Demand Bids Retailer Generation Distributor

14 Issues with the current Tri-Party System Aggregator/Retailer/Distributor sharing the same resource Logistical challenges communicating and reconciling how the behavior of one party affects others multi representation of same kw Missing money problem not enough revenue in energy arbitrage hence capacity payments and economic full-lmp incentives Conceptual challenges how does an aggregator sell energy at full LMP without buying it (from the Retailer) or moving it (via Distributor) Competitive conflicts each party is expanding into other businesses, especially Retailer-Aggregator convergence, and DSOs seeking new revenue streams to replace load Collaborative use emergence of DSO markets that desire the same kw flexibility, but at different grouping and performance levels

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