Creating The 21st Century Grid
Global Energy Management Institute Power Conference
C. John Wilder
Chief Executive Officer
June 29, 2006
Today’s Discussion


20th century’s greatest achievement
Global electrification challenge
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


Lifestyle improvement
Innovative products and services
Global electricity
21st
Customer benefits
of a smart grid
2
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
3
Universal Electrification Could Drive Step Changes In
Productivity…
Lights out: World population without power
05; Percent (100%=6.5 billion)
Without
electricity
25
With
75
electricity
In demand: Cost required for universal
electrification
05; $ trillion
12.0
12.2
Cost to
EU GDP
build 10TW 05E
Small price to pay: Cost to modernize grid
vs. average electric bill
05; $/month per household
150
12.4
U.S. GDP
05E
Productivity pays: Est. annual GDP increase
25E-50E; $ trillions
11
3
5
Avg. bill
Cost to
modernize
grid
Source: EPRI Electricity Technology Roadmap
U.S. in 2025
World in 2050
4
…And Improve Quality Of Life Around The Globe
Lower infant mortality…
Average infant mortality rate
03; Mortalities per 1000 births
51
…and stronger economic output
Average GDP per capita
03; $ per person
1,950
80%
829%
10
< 4 MWh/person
consumption
> 4 MWh/person
consumption
210
< 4 MWh/person
consumption
> 4 MWh/person
consumption
Abundant power supply drives better health care and stronger economies
Source: EIA, CIA Factbook
5
Today’s Discussion


20th century’s greatest achievement
Global electrification challenge
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


Lifestyle improvement
Innovative products and services
Global electricity
21st
Customer benefits
of a smart grid
6
The Emerging Digital Economy Is Testing The Limits Of The
Current System…
Growing demand: U.S.
Electricity consumption
40-03; % of total energy use
300%
Stressed system: Congestion
loading relief requests
97-03; Number
1,500%
Need for technology: “Digital
quality” electrical load
80-20; Percent
1,600
400%
50
40
25
10
10
40
50
70
03
97
0
03
80
00
20E
Without greater investment, the existing U.S. system will not reliably support
the increasing demand for energy
7
…Compounded By A Historical Lack Of Investment In R&D
And Infrastructure…
U.S. investment in energy R&D
90-00; $ billions
Private sector R&D investment
95; % of net sales
10.5
6
10.0
50%
7.5
4
6.0
4.5
0.5
90
00
Medi- Comm. Svcs. Trans. Chem- Energy
cine equip.
equip. icals
U.S. federal R&D support for energy is only about 4% of total federal energy
R&D outlays
Source: EPRI
8
…Causing Outages That Cost Customers Billions Annually
U.S. economic cost of outages
$ billions/year
300
 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%
100
Current est. loss
Source: EPRI
Future expected
loss
 If no investment is made to
transform the grid system, the
annual cost of outages could reach
$300 billion
9
Today’s Discussion


20th century’s greatest achievement
Global electrification challenge
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


Lifestyle improvement
Innovative products and services
Global electricity
21st
Customer benefits
of a smart grid
10
A Slate Of Breakthrough Technologies Are On The
Horizon…
Stage 3:
Potential future
technology
Stage 2:
Near-term technology
Stage 1:
Current technology
 Automated switching
 Smart appliances
 Digital fault analysis
 Power quality
monitoring services
 Broadband over Power
Line
 Customized power
service packages
 Advanced load
management with smart
appliances
 AC/DC microgrids
 Advanced distributed
energy solutions
TXU Electric Delivery is investing in today’s leading-edge technology, but more
will be required as new “game changers” become commercially available
11
…Requiring Significant Investment To Realize The Full
Benefits
Transmission investment needs
05-25E; $ billions
Distribution investment needs
05-25E; $ billions
330
260
110
100
50
5
Load
growth
Correcting
deficiencies
Transformed
delivery
system
Load
growth
Correcting
deficiencies
Transformed
delivery
system
To achieve this grid transformation, annual transmission and distribution
investment would have to increase by 65% and the 20-year total is over $850
billion
12
“Self-Healing” Technologies Will Change The Way We
Manage And Respond To Outages…
2
Customer calls outage in
and Operations Center
receives notification
3 Dispatcher notifies field
technician who inspects entire
feeder for outage source; average
restoration time of 40 mins.
1 Tree limb falls on
line causing a
feeder outage
2 Automated switches
reconfigure system to
restore service to majority
of customers within 1 min.
3 Disruption location pinpointed
and service restored to remaining
customers within 24 mins.
Where deployed, automation technology enhances customer service
by eliminating sustained interruptions for 2/3 of the customers and reducing restoration
time up to 40% for the remaining 1/3 of the customers
13
…And Digital Fault Analysis Could Prevent Disruptions…
 A tree limb was hanging
over a line, causing 17
poletop recloser operations
over 23 hours
 There were no substation
breaker trips, so Operations
did not recognize a problem
 The tree limb burned down
the line, locking out the
recloser and interrupting
140 customers for 62 mins.
Source: TAMU/EPRI study
14
…Resulting In Industry-Leading Reliability Performance
U.S. electric delivery company performance
05; SAIDI1
Top quartile cost
300
225
150
TXU ED’s
target
Top quartile SAIDI
75
TXU
0
50
100
150
200
250
Distribution O&M and capital cost ($/customer)
TXU Electric Delivery has achieved top quartile cost and reliability
1 Excluding
major events and planned outages
15
TXU Is Redefining Utility Service Enabled By BPL
16
17
Today’s Discussion


20th century’s greatest achievement
Global electrification challenge
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


Lifestyle improvement
Innovative products and services
Global electricity
21st
Customer benefits
of a smart grid
18
Advanced Grid Technologies Are Enhancing The Quality Of
Life In The Communities We Serve…
Lifestyle Area
1 Basic needs
2
Comfort
3 Security
4 Productivity
5
Conservation/
Environment
Benefits of Electricity
 Lighting
 Medicine storage
 Food preparation and preservation
 Heating/Hot water
 Air conditioning
 Well maintained electric infrastructure
 Video surveillance
 Enabling digital devices, e.g. PCs
 Enhanced reliability
 Power quality
 Remote monitoring and meter reading
 Smart home applications
19
…And Unleashing The Potential For Innovative New
Products And Services For Customers
Yesterday
Today
Tomorrow (06+)
On-site load
mgmt
PTB Discount
Bundled svcs.
(data, video)
Simple
Savings
One
regulated
price
Rewards+
Indexed
Energy
efficiency
Term savings Savings
Power
quality mgmt
Surge Protection
Renewable
Freedom
Plan
Time of use
Market
Tracker+
99
00
01
02
03
04
05
06
Smart
homes
07
08
09
10
Future products will give customers greater choice and control over their energy
consumption and costs
20
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
21
Creating The 21st Century Grid
Global Energy Management Institute Power Conference
C. John Wilder
Chief Executive Officer
June 29, 2006