1. Don Von Dollen Program Manager, IntelliGrid October 6, 2009 Creating a Low-Carbon Future

4. The CO 2 Challenge Billion tons CO 2 Historical Emissions U.S. Electric Sector Remainder of U.S. Economy 83% Reduction in CO 2 emissions below 2005 Assumed Economy-wide CO 2 Reduction Target (with no international offsets) 2005 = 5982 mmT CO 2 2030 = 42% below 2005 (3470 mmT CO 2 ) 1017 mmT CO 2 0 1 2 3 4 5 6 7 8 1990 2000 2010 2020 2030 2040 2050

5. U. S. Electric Sector CO 2 Emissions U.S. Electric Sector CO 2 Emissions (million metric tons) 2009 EIA Base Case 0 500 1000 1500 2000 2500 3000 3500 1990 1995 2000 2005 2010 2015 2020 2025 2030 2007 2008

7. 2009 Prism U.S. Electric Sector CO 2 Emissions (million metric tons) Efficiency Renewables Nuclear 41% reduction in 2030 from 2005 level is technically feasible using a full portfolio of electric sector technologies 41% CCS Fossil Efficiency 0 500 1000 1500 2000 2500 3000 3500 1990 1995 2000 2005 2010 2015 2020 2025 2030 20% Reduction in T&D Losses by 2030 None T&D Efficiency +3% Efficiency for 75 GWe Existing Fleet 49% New Coal; 70% New NGCCs by 2030 40% New Coal, 54% New NGCCs by 2030 Fossil Efficiency 90% Capture for New Coal + NGCC After 2020 Retrofits for 60 GWe Existing Fleet None CCS No Retirements; 10 GWe New Build by 2020; 64 GWe New Build by 2030 12.5 GWe New Build by 2030 Nuclear 135 GWe by 2030 (15% of generation) 60 GWe by 2030 Renewables 8% Additional Consumption Reduction by 2030 Load Growth ~ +0.95%/yr Efficiency EPRI Prism Target EIA Base Case Technology

8. 2009 Prism – PEV and Electro-Technologies U.S. Electric Sector CO 2 Emissions (million metric tons) Efficiency Renewables Nuclear CCS Fossil Efficiency Low-carbon generation enables electrification and CO 2 reductions in other sectors of economy Electro-Technologies PEV 0 500 1000 1500 2000 2500 3000 3500 1990 1995 2000 2005 2010 2015 2020 2025 2030 PHEVs by 2010 40% New Vehicle Share by 2025 3x Current Non-Road Use by 2030 None Electric Transportation Replace ~4.5% Direct Fossil Use by 2030 None Electro- technologies EPRI Prism Target EIA AEO Base Case Technology

10. MERGE U.S. Electric Generation Mix Limited Portfolio Full Portfolio Coal Gas Wind Demand Reduction New Coal + CCS Coal Gas Wind Nuclear Demand Reduction Nuclear Solar Biomass Hydro CCS Retrofit Biomass Hydro

12. MERGE Wholesale Electricity Cost Results 2007 U.S. Average Wholesale Electricity Cost Limited Portfolio Full Portfolio $/Mwh (2007$) 2020 2030 2040 2050 Limited Portfolio Full Portfolio 210% 80% 2007 U.S. Average Wholesale Electricity Cost Substantial increases in the cost of electricity 2050 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220

13. Meeting the Challenge 2007 U.S. Average Wholesale Electricity Cost Limited Portfolio Full Portfolio $/Mwh (2007$) 2020 2030 2040 2050 2007 U.S. Average Wholesale Electricity Cost Limited Portfolio Full Portfolio $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220 Technology Actions Based on Meeting the Prism Technology Targets Technology Innovation to De-carbonize While Achieving a Cost of Electricity Near Today’s Level RD&D and Deployment Challenge Innovation Challenge

15. BACKUP SLIDES

16. MERGE De-carbonization Results Limited Portfolio Full Portfolio Wholesale Electricity Cost (2007 cents/kWh) Emissions Intensity (metric tons CO 2 /MWh) Cost of Electricity De-Carbonization 2020 2030 2040 2050 2020 2030 2040 2050 0 2 4 6 8 10 12 14 16 18 20 22 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 2007 MERGE Projections 2020-2050 2020 2030 2040 2050 2020 2030 2040 2050 Limited Portfolio Full Portfolio High Cost to meet 2050 Reduction Target with >80% Generation Mix Gas and Renewables

17. Conclusion Limited Portfolio Full Portfolio Wholesale Electricity Cost (2007 cents/kWh) Emissions Intensity (metric tons CO 2 /MWh) Cost of Electricity De-Carbonization 2020 2030 2040 2050 2020 2030 2040 2050 0 2 4 6 8 10 12 14 16 18 20 22 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 2007 MERGE Projections 2020-2050 2020 2030 2040 2050 2020 2030 2040 2050 Limited Portfolio Full Portfolio Electricity policy and technology actions over the next decade will to a great extent shape the electricity future of 2050

18. MERGE Wholesale Electricity Cost Results 2007 U.S. Average Wholesale Electricity Cost Limited Portfolio Full Portfolio $/Mwh (2007$) 2020 2030 2040 2050 Limited Portfolio Full Portfolio 173% Substantial increases in the cost of electricity 2050 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220

19. Impact on U.S. Economy of Policy: 80% Below 1990 by 2050 Value of R&D Investment Cost of Policy Reduction in Policy Cost with Advanced Technology Advanced technologies without CCS or new Nuclear