United States Energy Barry Nicholls Unrestricted Siemens Energy, Inc All rights reserved.

Transcription

1 International Press Briefing June 2014 United States Energy Barry Nicholls Unrestricted Siemens Energy, Inc All rights reserved.

2 Siemens Energy in the United States Anchorage, AK Ft. Madison, IA Pittsburgh, PA Trenton, NJ Hutchinson, KS Winston Salem, NC Charlotte, NC Americas Headquarters Manufacturing / Engineering / Factory Service Ft. Payne, AL Jackson, MS Alpharetta, GA Gas and Steam Turbines, Generators Charlotte, NC Generator components Ft. Payne, AL Instrumentation & Controls Alpharetta, GA Industrial turbine packaging and service Houston, TX Wind blades Fort Madison, IA Wind nacelles Hutchinson, KS High Voltage Switchgear Jackson, MS Factory Service Anchorage, AK; Trenton, NJ; Charlotte and Winston-Salem, NC; Houston, TX; Pittsburgh, PA Houston, TX Siemens Energy, Inc. Orlando, FL Supported by more than 40 sales and local service offices across the country

3 United States Energy Today s discussion U.S. energy revolution reshapes everything Somewhat offsetting market forces delay inevitable new power plant projects Siemens maintains leadership in serving evolving needs of its customers

4 The U.S. power industry is quite fragmented compared to other regions T & D Spend Number of Utilities Investor Owned 240 Utilities Companies Generating Power 100% Installed Thermal Capacity Electricity Generated 1,002 Power Cooperatives 319 GW 44% 73% 683 2,083 Public Power Entities 582 GW 56% 15% 12% 26 concentrated with the large, investorowned utilities. 3,325 utilities in the country Top 4% of generating companies 65% of installed capacity 56% of nonhydro electricity generated

5 United States has a large and complicated customer landscape

6 Unconventional Oil & Gas

7 Unconventional shale gas plays in United States Source: US Geological Survey

8 Snapshot of U.S. energy landscape America s new energy future Unconventional oil sources have increased oil production by 25% from Monthly crude oil production in the U.S. is expected to exceed the amount of crude oil imports later this year for the first time since February Twelve years ago shale gas production was only 2% of total U.S. natural gas production. today it represents 37%. The increase in U.S. natural gas production from shale gas and tight gas plays is making it possible that the U.S. will become a net exporter of gas by the end of this decade. CO 2 emissions in 2012 were at 1994 level.

9 Henry Hub Gulf Coast Natural Gas Spot Price ($ / mmbtu) $14 $12 $10 $8 $6 $4 $2 $0 Old sustainable price level Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 Dec-12

10 Henry Hub Gulf Coast Natural Gas Spot Price ($ / mmbtu) $14 Shale Production Era $12 $10 $8 $6 $4 $2 $0 Old sustainable price level Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 New sustainable price Unsustainable price Apr-12 Aug-12 Dec-12

11 Content removed at request of information owner. For further information contact Jeff Marn, Senior Manager Public Relations, IHS, at or

12 United States energy revolution CO 2 emissions at levels Annual Carbon Dioxide Emissions From Energy Consumption (Million Metric Tons) 6,000 5,800 5,600 5,400 5,200 5,

13 United States energy: Regulatory challenges and structural change External shocks Unconventional natural gas EPA regulations Renewable growth and efficiency standards Great recession Change in utility industry... STRUCTURE Fleet technology mix changing: Older coal units shut down Renewables added Gas turbine capacity required Need for increased transmission capability Utility mergers and acquisitions Change in OEM / supplier... CONDUCT Enhance local service capabilities for increased gas and wind Rapid deployment of technology solutions, wind and gas and steam Transmission and distribution system modernization Changes are creating waves of opportunities

14 United States Energy Today s discussion U.S. energy revolution reshapes everything Somewhat offsetting market forces delay inevitable new power plant projects Siemens maintains leadership in serving evolving needs of its customers

15 Content removed at request of information owner. For further information contact Jeff Marn, Senior Manager Public Relations, IHS, at or

16 US Power Generation Market by Technology (GW) Solar Coal Industrial Wind Nuclear Gas

17 United States Energy Today s discussion U.S. energy revolution reshapes everything Somewhat offsetting market forces delay inevitable new power plant projects Siemens maintains leadership in serving evolving needs of its customers

18 United States power market Key macro trends Slow economic growth kwhrs not growing Low revenue growth Low natural gas prices Low marginal prices High capital investment required O&M cost focus Downward pressure on ROE Mergers and acquisitions Shareholder growth aspirations

19 Service innovation highlights The operating fleet continues to be our #1 priority Program Business Customer-oriented solutions to maintain and operate new and existing power plants Generator Modernization Using Bonded Laminate Packs Leading-edge modernization reducing outage time from 122 to 44 days Gas Turbine Modernization/ Upgrades, Life Extension and Longer Inspection Intervals Innovative coatings, materials and components; technology transfer among different types of gas turbines Steam Turbine Modernization Compressed Outages and Longer Lifetime Increased customer economic value coupled with proven performance Leading-edge Non-destructive Examination and Diagnostic Services Technology, tooling and people providing timely assessment; predictive and lifetime management services

20 Operating plant service business remains steady through fleet changes North America Outage Activity Events (#) Event days 100,094 1,308 1,497 1,401 1,361 1,352 82,973 93,636 85,222 84,658

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22 Market drivers for gas turbines Wind Power Solar Power Lowest investment Highest efficiency Operational flexibility Dual fuel capability CO 2 Emission Reduction Gas Prices

23 SGT-8000H fleet Projected operating experience 50Hz (Germany) 60Hz (USA) 60Hz (Korea) 60Hz (Korea) 60Hz (USA) 60Hz (Korea) 60Hz (Korea) 60Hz (Korea) 50Hz (Turkey) 50Hz (Germany) 50Hz (Malaysia) 60Hz (USA) 50Hz (Turkey) 60Hz (USA) 60Hz (Philipines) 60Hz (USA) First Fire COD Units units under contract, 9 units in commercial operation 20,000 hours achieved on lead unit; 100,000 hours expected by mid-2014

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25 Expanded Charlotte Energy Hub World s most efficient Power Generation equipment manufacturing facility 1.2 million square feet $350 million invested 1,600 employees Full manufacturing and service capabilities across the steam and gas turbine and generator portfolio More than $600 million exported in last few years

26 New planning construct includes much greater peak-to-minimum variation Texas Example 80,000 70,000 Peak Load 60,000 50,000 40,000 3:1 5:1 30,000 Min Load 20,000 10,000 Wind Haircut Gas Turbine Technology <5 minute synchronization 10-minute start (150 MW) 30 MW / minute up / down Low turndown Steam Turbine Technology Fast start-up Plant Technology Fast start-up Low start-up emissions Duct firing

27 Recent Siemens Energy portfolio changes: Rolls-Royce Business action: Acquisition of aeroderivative business of Rolls-Royce Strategic rationale: Complementary portfolios and market segment participation (oil & gas vs. power) Synergies throughout business system: research & development, engineering, manufacturing, sales and service Process going forward: 100% ownership Siemens Energy sales channels

28 Renewables and system stability are key drivers of U.S. HVDC projects Significant U.S. HVDC projects (FY14-19) and key drivers Hydro New England Clean Power Link Hydro Northern Pass Hydro + Wind Northeast Energy Link System Support Wind Lake Erie Hydro West Point Green Line Wind SeaLink System Support San Francisco 2 Wind Wind System Support Poseidon Merchant Wind System Support Southern Meade Adelanto Wind Wind California Oahu Interconnect Imperial Valley Flow Controller System Support Wind Southern Cross

29 The Hudson Transmission Project commissioned 2013 Underground and underwater 8-mile, 660-MW power cable linking electric grids between Ridgefield, NJ, and West 49 th St. Substation in New York City Single back-to-back converter station (AC-DC-AC) located in Ridgefield, NJ

30 Siemens Energy businesses Strength through market leadership No. 1 No. 1 No. 1 Industrial steam turbines Offshore wind power plants Offshore grid connections No. 1 No. 1 No. 1 Advanced gas turbine series Power plant instrumentation & controls High Voltage Direct Current Transmission

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