Energy Risk & the End of Coal?:What does the closing of coal fired power plants mean for baseload power?

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About Today’s Panel

Jim Pierobon is a career-long energy marketing communications pro who has created and managed marketing programs and campaigns for multi-national companies, trade associations, government agencies and non-profits at transformational stages of the growth. currently owns a networked marketing consultancy, Pierobon & Partners LLC, with colleagues in Houston, San Francisco and New York City. He blogs at TheEnergyFix.com.

Bradford Radimer is the Director, Risk Control at NRG Energy, Inc. with over 40 years of energy industry experience. At NRG, Brad is responsible for designing and managing enterprise wide risk policies, policy compliance and transaction confirmations. Brad is also Co-Leader of the team that wrote the CCRO Risk Management Standards for Energy Market Participants.

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Branko Terzic is currently Executive Director of Deloitte Center for EnergySolutions and the Regulatory Policy Leader in Energy & Resources for Deloitte Services LP. He is a member of the National Coal Council advisory body to the President. Commissioner on Federal Energy Regulatory Commission and State of Wisconsin Public Service Commission.

Projected Capacity Retirements

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2012 Long-Term Reliability AssessmentPreliminary HighlightsCourtesy ofDave NeviusSenior Vice President, NERC

Manitoba (W)2021

MAPP (S)2020

MISO-US (S)2021

SaskPower (W)2014, 2016, 2020

Ontario IESO (S)2017

NORW (S)2019

BASN (S)2019

CALN (S)2018

ROCK (S)2018

Year when each Assessment Area’s projected Anticipated Reserve Margin falls below the NERC Reference Margin Level

ERCOT (S)2013

MEXW (S)2021

PJM (S)2020

AESO (S)2020

BC (W)2020

NERC Preliminary

NERC Preliminary 2013-2022 Capacity Outlook

Preliminary Data

Future-Planned Net Peak Capacity Change (Does not include Conceptual resources)

-20

-10

0

10

20

30

40

50

60

70

80

90

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Gig

awatt

s (G

W)

28%

5%

37%

11%

0% 19%

2013 Capacity Mix

26%

5%

38%

11%

0%20%

2022 Future-Planned Capacity Mix

Capacity Type Capacity Share of Total Capacity Share of Total Capacity Share of Total Planned ConceptualCoal 307,201 28.22% 290,496 25.85% 294,641 23.74% -16,705 -12,560Petroleum 52,410 4.81% 52,410 4.66% 52,377 4.22% 0 -33Gas 409,045 37.57% 427,165 38.02% 493,924 39.80% 18,120 84,878Nuclear 117,151 10.76% 124,225 11.06% 127,357 10.26% 7,074 10,206Other/Unknown 411 0.04% 5,850 0.52% 6,229 0.50% 5,438 5,818Renewables 202,546 18.60% 223,516 19.89% 266,448 21.47% 20,971 63,903TOTAL 1,088,764 100.00% 1,123,663 100.00% 1,240,977 100.00% 34,899 152,213

2013 Existing and Planned 2022 Planned 2022 Conceptual 10-Year Change

Gas and Renewables make up bulk of additions

10-Year Change

Deloitte’s Sixteen Cases to Infer Answers

High Gas Price

Low Gas Price

RPS w/REC

RPS w/REC

No RPS

No RPS

SO2, NOx, Hg CapNo CO2

SO2, NOx, Hg Cap

SO2, NOx, Hg Cap

SO2, NOx, Hg Cap

No SO2, NOx, Hg

No SO2, NOx, Hg

No SO2, NOx, Hg

No SO2, NOx, Hg

CO2 Cap

CO2 Cap

CO2 Cap

CO2 Cap

CO2 Cap

CO2 Cap

CO2 Cap

CO2 Cap

No CO2

No CO2

No CO2

No CO2

No CO2

No CO2

No CO2

Case 1

Case 2

Case 3

Case 4

Case 5

Case 6

Case 7

Case 8

Case 9

Case 10

Case 11

Case 12

Case 13

Case 14

Case 15

Case 16Copyright © 2012 Deloitte Development LLC. All rights reserved

Annual Power Generation (MWh) —Case 1 (“All In” Regulation)

0

1E+09

2E+09

3E+09

4E+09

5E+09

6E+09

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Gen

erat

ion

(M

Wh

)

Year

ST

CT

CC

LS Coal

Nuclear

HS Coal

RN

FGD Coal

CCS

Copyright © 2012 Deloitte Development LLC. All rights reserved

Annual Average Wholesale Electricity Price

Copyright © 2012 Deloitte Development LLC. All rights reserved

Modeled with Deloitte MarketPoint Integrated Model Suite

Southwest / New Mexico

Central Appalachia

Illinois

Basin

Gulf Coast / TX

Fort Union

Green River Basin

Northwest

Southern Appalachia

Prairie Canada

Uinta Basin

SPRB

NPRB

Northern

Appalachia / Pittsburg #8

Central Interior

WECCPac NW

WECCCOB

WECCIdaho

WECCN Nevada

WECCMontana

WECCColorado

WECCWyoming

WECCUtah

WECCBrit Col WECCAlberta

MAPPCanada

WECC S Nevada

NewMexicoWECCArizona

WECCBay CA

WECCS CA

WECCCMB

WECN CA

WECCCtrl CA

MAPPUS -EastMAPPUS -West

MAPPUS -South

SPPNorth

ERCOTGulf

ERCOTSouth

ERCOTWest

SPPSouth

ERCOTCentral

ERCOTNorth

FRCCSouth

EntergyNorth

EntergyCentral

EntergySouth

MAINWUM

FRCCNorth

MAINNIL

MAINSOM

NEPOOLNortheast

NPCCCanada EastNPCCQuebec

NPCCOntario

NEPOOLSouthwest

NYPPNorth

NYPPWest NYPPSouthECARMichigan

ECAREastECARWest

MAACWestMAACEast

MAACSouth

VACARNorth

VACARCentral

VACARSouth

SouthernEast

SouthernWest

SouthernCentral

TVAWest

TVANorth/South

TVAEast

The four entitlement hubs

Western Canada

EOR

Pacific NW

PGE

SCGSDGE

Huntingdon

WNC+ Mtn

Kingsgate Monchy Emerson

ESCS. Atlantic

WSC

NE

E. Canada

Ontario

Mid Atlantic

Niagara

Iroquois

Off-Shore

Atlantic

Midwest

Permian Basin

Alberta

Gulf Coast

N. Great PlainsRocky

Mtns

Pac. NW

ENC

Mexico

Anadarko

North American Gas

World Gas

San JuanSo.Cal

Eastern Canada

Appalachia

N. Cal

Saskatchewan

British Columbia

British Columbia

North American Coal

NOx SOx CO2 Hg

NOx SOx CO2 Hg

North American Electric and Emissions

Latin America

AustraliaAfrica

Middle East Mainland

Asia

Pacific RimNorth

AmericaEurope

FSU

Copyright © 2012 Deloitte Development LLC. All rights reserved

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