The Role of Efficient Electrification in the Future Energy System Deana Dennis Sr. Manager, Government & External Relations ddennis@epri.com NASUCA Mid-Year Meeting Minneapolis, Minnesota June 26, 2018

Three Key Aspects of EPRI Independent Objective, scientifically based results address reliability, efficiency, affordability, health, safety, and the environment Nonprofit Chartered to serve the public benefit Collaborative Bring together scientists, engineers, academic researchers, and industry experts

Efficient Electrification R&D at EPRI Transportation Buildings & Industry New Applications

EPRI’s Focus – Going Forward ANALYTICS Conduct national level electrification potential analysis Conduct state and local level electrification potential analyses Identify Early Stage Efficient Electrification Technologies Accelerate Adoption Through Expanded EPRI Lab Capabilities and Field Demonstrations Develop Electrification Roadmap Develop Cost-Benefit Analysis Framework Convene Efficient Electrification International Conference   TECHNOLOGY PIPELINE R&D COLLABORATION INFORM INDUSTRY STAKEHOLDERS, POLICYMAKERS, REGULATORS AND CUSTOMERS

U.S. National Electrification Assessment: Scenarios Examined CONSERVATIVE Slower Technology Change AEO 2017 growth path for GDP and service demands, and primary fuel prices EPRI assumptions for cost and performance of technologies and energy efficiency over time Existing state-level policies and targets REFERENCE Reference Technology PROGRESSIVE Reference Technology + Moderate Carbon Price TRANSFORMATION Reference Technology + Stringent Carbon Price

U.S. National Electrification Assessment (USNEA) - Findings SCENARIO Electricity Portion of Final Energy (2015 - 2050) Total Final Energy Economy Wide Electric Load CONSERVATIVE (21%- 32%) 20% 19% 24% REFERENCE (21%- 36%) 22% 20% 32% PROGRESSIVE (21%- 39%) 27% 57% 35% TRANSFORMATION (21%- 47%) 32% 67% 52%

Efficient Electrification: Reference Scenario GDP Growth (AEO) 6000 +32% Growth 2015  2050 120 Structural Change (AEO) 5000 100 Vehicles Electrification 4000 Buildings 80 Industry Quad Btus Final Energy Efficiency Improvements TWh Electricity Demand 3000 60 Electrification Buildings (before electrification) Other Non-Electric Energy 2000 40 EPRI thinks that there will be greater efficiency improvements overall compared to AEO. We see that some of this efficiency will come through electrification. Natural Gas 20 1000 Industry (before electrification) Electric Share Increased Electricity Electricity 21% 36% 2015 2020 2025 2030 2035 2040 2045 2050 2015 2020 2025 2030 2035 2040 2045 2050

Efficient Electrification: Transformation GDP Growth (AEO) 1000 2000 3000 4000 5000 6000 2015 2020 2025 2030 2035 2040 2045 2050 +52% Growth 2015  2050 Tight Carbon Target 120 Vehicles Structural Change (AEO) Electrification 100 Buildings Industry 80 Quad Btus Final Energy Efficiency Improvements TWh Electricity Demand 60 Buildings (before electrification) Electrification 40 Other Non-Electric Energy Natural Gas 20 Industry (before electrification) Electric Share Increased Electricity Electricity 21% 47% 2015 2020 2025 2030 2035 2040 2045 2050

Electric Generation Mix and Total CO2 Emissions 2050 Transformation History Progressive Rooftop PV Reference Solar Conservative Conservative Wind Reference 2015 Hydro+ new Nuclear existing Progressive Nuclear NG CCS Transformation Coal 0.44 0.39 0.38 0.05 0.02 tCO2/MWh

Total and Electric Generation CO2 Emissions Total Energy-Related CO2 Increasing electrification leads to lower overall CO2 emissions, even as emissions from electric generation increase in the USNEA Reference USNEA Reference History USNEA projections USNEA Reference USNEA Transformation Electric Generation CO2 USNEA Transformation

Transportation: Looking Ahead at Economic Potential of EV (Reference) Battery costs continue to fall rapidly Car manufacturers develop wide range of EV models with ~300 mile range Economic Potential Adoption EV / PHEV are most economical choice for 75% of potential new vehicle decisions by 2030 EV / PHEV represent 40% of new vehicle market by 2030 Home or work charging is available for most drivers EV maintenance costs are lower NG prices remain low, moderate increase in oil price (90% by 2050) (75% by 2050) ICEV fuel economy continues to improve

Key Takeaways from National Electrification Assessment System Impacts Improved Environmental Outcomes Electric Sector Resource Planning Natural Gas Remains an important fuel for end-use and electric generation Energy Efficiency Efficient electrification + end-use efficiency lead to falling final energy use Electrification Trend Continues Driven by technological change and consumer choice, further bolstered by policy AND… Realizing the full potential will require deliberate and integrated decisions  

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Learn More about EPRI’s Efficient Electrification R&D Initiative: https://www.epri.com/#/pages/sa/efficientelectrification Download EPRI’s U.S. National Electrification Assessment: http://mydocs.epri.com/docs/PublicMeetingMaterials/ee/000000003002013582.pdf