Envisioning Future Energy Technologies Aaron Melda Tennessee Valley Authority

Envisioning Future Energy Technologies Aaron Melda Tennessee Valley Authority

Where We Are Today GWh 200,000 Energy Forecast Plan CAGR FY11 Budget 1.4% 180,000 FY15 Budget 0.9% 160,000 FY17 Budget 0.3% Current Outlook Flat 140,000 Weather-Normalized Actual (Includes Incremental TVA EE) 120,000 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

Where We Are Going

What Could the Future Look Like? Flat Base Case Growth Case Steady Decline Case G R P Economic growth offset by efficiencies drives flat load outlook CAGR ~0.0% Economic growth drives additional industry and customer count growth CAGR +0.6% Technology enables incremental efficiencies and distributed solutions CAGR -1.0%

Impact of DOE Standards Continues to Grow 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 // 2036 Newly Modeled Standards Graphic depicts timing and magnitude of DOE standards. Timing indicates compliance year and size of bubble corresponds with relative savings.

Residential Use Impacted by Lighting Efficiencies Lighting percent of average use is forecasted to be more than cut in half, from What if every household replaced one light bulb with an LED bulb? 13% in 2005 to 6% in 2025, 60 Watts 9 Watts = 51 Watts 4 Hours a Day = 204 Watt hours 365 Days a Year = 75 kwh driven by codes and standards and economics 4,000,000 Residential Customers = 298 GWh Equates to 0.5% reduction in residential load Equates to 0.2% reduction in TVA s total load Equates to $30 million in annual revenue

Plug-In Electric Vehicles (PEV) TVA Snapshot PEV s were introduced in 2010/2011 and 7 PEV models are available from various OEMs in the Valley (Nissan, Chevy, Ford, Tesla, BMW) As of May 2016: About 5,400 PEVs have been registered in the TVA Service Territory PEVs = 0.2% of registrations and < 2% of market share 3.0% About 3MW diversified load at transformer representing about 16 GWh annually % of registrations PEVs 0.0% 3.0% About 550,000 PEVs needed for 1% of TVA sales (25% market share over 5 years)

Renewable Product Demand

Seasonal Wind and Solar Shapes SUMMER WINTER FALL / SPRING LOAD SHAPES 280 30,000 230 25,000 180 12AM 3AM 6AM 9AM 12PM 3PM 6PM 9PM 12AM 3AM 6AM 9AM 12PM 3PM 6PM 9PM 12AM 3AM 6AM 9AM 12PM 3PM 6PM 9PM 130 20,000 15,000 80 10,000 30 5,000 SOLAR -20 0 350 30,000 300 250 200 150 100 Maximum Daily Solar Energy Average Daily Solar Energy Minimum Daily Solar Energy Load 25,000 20,000 15,000 10,000 WIND 50 0 5,000 0 Maximum Daily Wind Energy Average Wind Energy Minimum Daily Wind Energy Load

Key Takeaways Current load outlook is flat to slightly declining Energy efficiency standards and technologies continue to evolve Substantial PEV adoption in the Valley is needed to impact load Meeting customer demand for renewables and attractive combination of low rates and carbon is a focus Future energy technologies needed to flatten loads and increase flexibility to optimize the future value proposition

Appendix (Other Slide Options)

Load Dispatch on Typical Summer Day MW 35,000 30,000 Daylight Peak 28,865 MW 25,000 CT 20,000 15,000 10,000 5,000 0 Demand 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour Purchases CC Wind Hydro RM Gen RM Pump Coal Nuclear

Load Dispatch on Typical Winter Day MW 35,000 30,000 Demand Peak 29,824 MW Daylight 25,000 CT 20,000 Purchases CC 15,000 Wind Hydro 10,000 RM Gen RM Pump 5,000 Coal 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour Nuclear