creating the 21 st century grid global energy management institute power conference c. john wilder...

Creating The 21st Century Grid

Global Energy Management Institute Power Conference

C. John WilderChief Executive Officer

June 29, 2006

2

Today’s Discussion

Global electricity Global electricity 20th century’s greatest achievement Global electrification challenge

21st century power needs21st century power needs

Digitization of advanced economies Historic lack of investment Economic cost of outages

Grid technology advances


Evolving technology opportunities Investment requirements TXU technology examples

Customer benefits of a smart grid


Lifestyle improvement Innovative products and services

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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

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

4

Universal Electrification Could Drive Step Changes In Productivity…

Lights out: World population without power05; Percent (100%=6.5 billion)

150

5

Small price to pay: Cost to modernize grid vs. average electric bill05; $/month per household

In demand: Cost required for universal electrification05; $ trillion

3

11

U.S. in 2025 World in 2050

Productivity pays: Est. annual GDP increase 25E-50E; $ trillions

Source: EPRI Electricity Technology Roadmap

25

75With electricity

Without electricity

12.0

Avg. bill Cost to modernize grid

12.2 12.4

Cost to build 10TW

U.S. GDP 05E

EU GDP 05E

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…And Improve Quality Of Life Around The Globe

Lower infant mortality…

Average infant mortality rate

03; Mortalities per 1000 births

Source: EIA, CIA Factbook

Abundant power supply drives better health care and stronger economiesAbundant power supply drives better health care and stronger economies

51

10

< 4 MWh/personconsumption

> 4 MWh/personconsumption

…and stronger economic output

Average GDP per capita

03; $ per person

210

1,950

< 4 MWh/personconsumption

> 4 MWh/personconsumption

80%80%

829%829%

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7

The Emerging Digital Economy Is Testing The Limits Of The Current System…

Without greater investment, the existing U.S. system will not reliably support the increasing demand for energy

Without greater investment, the existing U.S. system will not reliably support the increasing demand for energy

Growing demand: U.S. Electricity consumption 40-03; % of total energy use

97 03

50

1,6001,500%1,500%

Stressed system: Congestion loading relief requests 97-03; Number

40 70 03

300%300%

Need for technology: “Digital quality” electrical load 80-20; Percent

80 00 20E

400%400%

8

10.510.0

7.5

6.0

4.5

0.5

Private sector R&D investment95; % of net sales

…Compounded By A Historical Lack Of Investment In R&D And Infrastructure…

6

4

90 00

U.S. investment in energy R&D90-00; $ billions

U.S. federal R&D support for energy is only about 4% of total federal energy R&D outlays

U.S. federal R&D support for energy is only about 4% of total federal energy R&D outlays

Source: EPRI

Medi-cine

Comm.equip.

Svcs. Chem-icals

Trans. equip.

Energy

50%50%

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…Causing Outages That Cost Customers Billions Annually

100

300

Current est. loss Future expectedloss

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

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

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11

A Slate Of Breakthrough Technologies Are On The Horizon…

Stage 1:

Current technology

Stage 2:

Near-term technology

Stage 3:

Potential future technology

Automated switching

Digital fault analysis

Broadband over Power Line

Advanced load management with smart appliances

AC/DC microgrids

Advanced distributed energy solutions

Smart appliances

Power quality monitoring services

Customized power service packages

TXU Electric Delivery is investing in today’s leading-edge technology, but more will be required as new “game changers” become commercially available

TXU Electric Delivery is investing in today’s leading-edge technology, but more will be required as new “game changers” become commercially available

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…Requiring Significant Investment To Realize The Full Benefits

100

50

110

Transmission investment needs05-25E; $ billions

Load growth

Correcting deficiencies

Transformed delivery system

330

5

260

Distribution investment needs05-25E; $ billions

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

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

Load growth

Correcting deficiencies

Transformed delivery system

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“Self-Healing” Technologies Will Change The Way We Manage And Respond To Outages…

Tree limb falls on line causing a feeder outage

1

2

Automated switches reconfigure system to restore service to majority of customers within 1 min.

3 Dispatcher notifies field technician who inspects entire feeder for outage source; average restoration time of 40 mins.

3 Disruption location pinpointed and service restored to remaining customers within 24 mins.

Old

Way

New Way

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

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

2

Customer calls outage in and Operations Center receives notification

14

…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.

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

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…Resulting In Industry-Leading Reliability Performance

U.S. electric delivery company performance

05; SAIDI1

TXU Electric Delivery has achieved top quartile cost and reliability TXU Electric Delivery has achieved top quartile cost and reliability

0

75

150

225

300

50 100 150 200 250

Distribution O&M and capital cost ($/customer)

1 Excluding major events and planned outages

TXU

Top quartile SAIDI

Top quartile cost

TXU ED’s target

16

TXU Is Redefining Utility Service Enabled By BPL

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

Lifestyle Area Benefits of Electricity

1 Basic needs

Lighting Medicine storage Food preparation and preservation

2 Comfort Heating/Hot water Air conditioning

3 Security Well maintained electric infrastructure Video surveillance

4 Productivity

Enabling digital devices, e.g. PCs Enhanced reliability Power quality

5 Conservation/ Environment

Remote monitoring and meter reading Smart home applications

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Bundled svcs. (data, video)

…And Unleashing The Potential For Innovative New Products And Services For Customers

99 00 01 02 03 04 05 06 07 08 09 10

One regulated price

Rewards+Term savings

Simple Savings

RenewableFreedom Plan

Yesterday Tomorrow (06+)Today

Indexed Savings

PTB Discount

Surge Protection

Market Tracker+ Smart

homes

Time of use

Power quality mgmt

On-site load mgmt

Energy efficiency

Future products will give customers greater choice and control over their energy consumption and costs

Future products will give customers greater choice and control over their energy consumption and costs

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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 WilderChief Executive Officer

June 29, 2006

creating the 21 st century grid global energy management institute power conference c. john wilder...

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