Efficient Electrification Enabling Efficient, Affordable and Sustainable Solutions Mid-West Consumers Association Annual Meeting December 12, 2018 Rob Chapman Vice President EPRI

What If… ELECTRIC LOAD ENERGY USAGE CARBON NATURAL GAS 32% 22% 20% 40%

U.S. Power System Evolution… PRODUCE CLEAN ENERGY EVOLVE TO DYNAMIC GRID ADOPT ELECTRIC END-USES

U.S. Power System Evolution… PRODUCE CLEAN ENERGY EVOLVE TO DYNAMIC GRID ADOPT ELECTRIC END-USES 36%

Renewable & Battery Cost Trends: Unlocked Potential by 2025 2100 1650 1400 2010 2017 2025 Wind ($/kW) Universal Solar PV: ~$0.02/kWh in high solar region; almost half the cost of rooftop solar Wind LCOE: ~ $0.03/kWh in high wind region Electric vehicle (~300miles): ~$7,000 decrease Commercial building batteries: 2-year payback Solar/wind + 4-6 hour storage cost = natural gas power plant 4100 1350 850 2010 2017 2025 Solar ($/kW) 1000 200 100 2010 2017 2025 Battery ($/kWh) No breakthrough technology needed!

U.S. Power System Evolution… PRODUCE CLEAN ENERGY EVOLVE TO DYNAMIC GRID ADOPT ELECTRIC END-USES 88GW

Electrification and Load Shapes… Space Heating Space Heating Non-Seasonal Non-Seasonal Cooling Cooling Vehicle Charging

“Shared” Smart Appliance Enabled by an Integrated Grid Intelligent set point control to provide grid benefits Average energy draw profile of an electric water heater Intelligent set point control, charging and discharging decoupled kW Uncontrolled Water Heater (kWh) Controlled Water Heater (kWh) ~150GWh across 50 million U.S. homes Smart appliances will make it easier to engage customers in demand response programs… Hours

Example: Nest’s “Rush Hour Rewards” Program During a rush hour, Nest tweaks the temperature to save energy and keep you comfortable. You can always change the temperature. CRITICAL RUSH HOUR UNTIL 6:00 PM Your energy company is starting a rush hour. MORE INFO SWING MW OF LOAD AUTOMATICALLY; NEST, CUSTOMERS AND UTILITY BENEFITS Source: https://nest.com/support/article/What-is-Rush-Hour-Rewards

Power System Evolution… PRODUCE CLEAN ENERGY EVOLVE TO DYNAMIC GRID ADOPT ELECTRIC END-USES 21%

The Technology Driven Efficiency Trend Decoupling of Economy and Energy Use Consumer Electronics 1990s • 27” CRT 125W 2005 • 55” Plasma 500W 2010 • 56” LED 175W 2012 • 56” LED 100W 2013 • 55” Organic LED <30W Cathode Ray Tube Plasma LED Organic LED (OLED)

Establishing Potential…Varies by End-Use Application TRANSPORT BUILDINGS INDUSTRY 44% 30% 26% PERCENTAGE OF FINAL ENERGY PERCENTAGE OF FINAL ENERGY PERCENTAGE OF FINAL ENERGY 96% 56% 61% PERCENTAGE OF FINAL ENERGY PROVIDED BY FOSSIL FUEL PERCENTAGE OF FINAL ENERGY PROVIDED BY FOSSIL FUEL PERCENTAGE OF FINAL ENERGY PROVIDED BY FOSSIL FUEL

U.S. Electrification Assessment – Use of Energy 2015 - 2050 REFERENCE SCENARIO Quad BTUs Total NG ~37 Tcf Electricity ~4930 TWh End-use Electricity generation/upstream 32% 40% 40% Cars and Light Trucks Heavy-duty Trucks Bus / Transit / Rail Space Heating Cool / Light / Appl. / Elec. Buildings Other Industry Process Constr. / Ag. / Min. Industry Boilers Industry Other TRANSPORTATION BUILDINGS INDUSTRY * Final Energy, excludes upstream and midstream energy use, e.g., power generation, oil and gas extraction, refining, and pipelines

Critical Trends – Electric Vehicle 1 4 TRANSPORT MARKET PROFILE SIGNPOSTS POLICY & RREGULATION AUTONOMOUS VEHICLE INCREASE IN MODEL OPTIONS EXPANDING PUBLIC INFRASTRUCTURE INNOVATION IN FAST CHARGING LI-ION BATTERY COSTS 1 44% PERCENTAGE OF FINAL ENERGY 2 3 2 5 96% PERCENTAGE OF FINAL ENERGY PROVIDED BY FOSSIL FUEL 4 5 3 6 66% ENERGY CONSUMED BY LIGHT DUTY VEHICLES 6

Transportation Energy Efficient…Clean Air…Economic Benefits

Energy Efficient… Clean Air…Health Benefits Industry Applications Energy Efficient… Clean Air…Health Benefits

Less Water…Less Pesticide… More Yield Indoor Agriculture Less Water…Less Pesticide… More Yield

Efficient Electrification…Win…Win…Win 5.3 $36T 4.6 Gross Domestic Product (In 2015 $) 4.3 Billion Tons CO2 61 51 Energy-related CO2 Emissions 47 Quads $4,530 $3,940 Total Final Energy Use $18T $2,720 $9T Reference Scenario Total Energy Cost 1987 2015 2050