GE s Perspective on the US Power Market Bob Prantil, North America Key Accounts Executive September 14, 2017
New York is powered by GE GE Installed Base in NY Microgrid projects in NY 8.3 GWs, 152 GT units 16.3 GWs, 106 ST units 3 GWs, 3 reactors, 50% of IB 899 MWs, 594 WTGs, 49% of IB NY Prize phase 1: 10 of 83 microgrid feasibility studies ( 15 16) NY Prize phase 2: 4 out of 11 detailed design studies (ongoing) NY REV: National Grid Potsdam demonstration project feasibility, design & build Independant Power Producers of New York September 14, 2017 2
GE in New York Employees Over 7,100 GE jobs, including: 2,300+ GE Power jobs 1,600+ GE Corporate jobs 630+ GE Aviation jobs 550 GE Healthcare jobs 510 GE Renewable Energy jobs 370+ GE Energy Connections jobs 370 GE Global Operations jobs 340+ GE Digital jobs 210+ GE Oil & Gas jobs 40+ GE Capital jobs Charitable Contributions $25.7M in 2016 13,833 Volunteer hours Locations GE Aviation Norwich, Bohemia GE Capital New York GE Corporate Niskayuna, Newburgh, Albany GE Digital - Schenectady GE Energy Connections Rochester, Schenectady GE Healthcare - Troy GE Oil & Gas - Skaneateles, Wellsville GE Power Schenectady GE Renewable Energy Schenectady GE Transportation - Latham Key Suppliers Advanced Atomization Technologies FADEC International LLC Hitachi America Limited New York Air Brake Corp. Users Machine & Tool Co. Inc. Independent Power Producers of New York September 14, 2017 3
A digital industrial company 295,000+ people ~180 countries $123.7B revenue (2016) POWER AVIATION RENEWABLE ENERGY BHGE HEALTHCARE TRANS. LIGHTING CAPITAL DIGITAL 4
The Power transformation Delivering on significant investment for portfolio repositioning Alstom integration on track above pro forma on profit, cash, synergies Combining generation (Power) and grid (Energy Connections) businesses Winning with the new HA best new product launch in last 20 years Services upgrade growth 4X over 2 years Power Digital Solutions industry leader Navigating a flat HDGT industry with some volatility Planning for continued softness in 17 4Q 16 softer than we thought GE Power #1 units position since 1980 industry leading value Global industry leader transforming to align with customers Alstom Digital FastWorks Adv. Mfg. Steam Services HA 5
Investment focus areas Thermal Generation Services Hybrid Systems Grid Wind Digital 6
Investing for gas leadership the HA Leading and delivering EDF Bouchain world record in efficiency 99.5% reliability Base load in 23 minutes 5,500+ hours & 130+ starts Exelon 4x7HA.02 June 2016 COD 10,000+ hours & 200+ starts Bhikki first HA in Pakistan 62%+ combined-cycle efficiency 17 months PO to power Sergipe LATAM s largest Gas Power Plant first HA turnkey selfimplement project $1B 2016 order Leading the industry with advanced technology 7
Investing for services leadership Upgrades growth 1,000+ 470 Upgrades 275 AGPs 104 145 155-165 15 16 17E Growth beyond AGPs Gas upgrades Alstom IB, combined technologies 2%+ efficiency, extended life Steam upgrades GE IB, combined technologies 2%+ efficiency, lower product cost Fleet360 total plant solutions Plant outcomes incl. GT/ST/Boiler Improved performance/economics Analytics: Lifing, M&D, Digital Advanced analytics for plant Improved productivity on full plant Broadening the service portfolio with new upgrades and Predix 8
Hybrid case study: Southern California Edison Results 1 st hybrid gas turbine/bess in the world 50 MW of rapid response contingency reserve without fuel burn Max power in 5 minutes 30% lower CAPEX than standalone BESS $1.7M additional annual revenue Existing LM6000 in Simple Cycle + 10MW/4.3 MW-hr Battery Energy Storage System (BESS) + Integrated Controls Awards Edison Electric Institute Energy Storage North America Extending simple cycle GT hybrid to combined cycle applications Visit www.gepower.com/hybrid Independant Power Producers of New York September 14, 2017 9
Digital transformation of electricity Reimagining electricity intersection of energy and digital More data than any other industry 2TB data per plant/day 2% of all data is being utilized 75% of plant downtimes are predictable $10 trillion by 2060 GE Power software orders + ~1.7x $533 $269 ($ in millions) 15 16 17E Distributed Energy Generation Market Operational Trading Transmission Distribution Behind the Meter 10
September 19, 2017 11 The First Digital Utility? @NYPAenergy @GQenergy Slide courtesy of the New York Power Authority
Evolution of the GE onshore wind portfolio GE units 1,000 th 5,000 th 10,000 th 20,000 th 25,000 th 30,000 th UNIT 96-00 01-04 05-08 09-12 13 14 15 FARM 16+ 1.5i (65m) 1.5s (70.5m) 1.5sle (77m) 1.5xle (82.5m) 1.6-100 1.6-82.5 1.7-100 1.85-87 1.85-82.5 1.7-103 GE acquires Alstom Model introduction 2.5s (88m) 2.5xl (100m) 2.75-103 2.75-100 2.85-103 2.5-120 2.75-120 3.2-103 3.2-130 3.4-130/137 3.8-130 3.6-137 Digital Wind Farm 2MW-116 2MW-107 GE s journey from the unit to the farm 12 12 *Since 2002
Haliade* 150-6MW offshore wind turbine A bankable wind turbine ensuring generation of electricity at any time, lowering LCOE Direct Drive Permanent Magnet Generator Pure Torque* High aerodynamic efficiency Individual electrical pitch Redundant sub-systems Tuned mass damper PROJECTS ~2 GW of order backlog * Trademark of General Electric Company. Units Block Island 5 Merkur 66 French Projects 238 Groix (floating) 4 Leucate (floating) 4 Xinghua Gulf 3 13
Grid in a changing energy landscape GE is enabling the creation of greener, more resilient and reliable power system HELPING TO MEET GROWING ENERGY DEMANDS HV equipment and turnkey solutions, automation and software, microgrids ENABLING RENEWABLES & A DIVERSIFIED ENERGY MIX Electrical balance of plant, HV direct current, DER and energy management systems UPGRADING AGING INFRASTRUCTURE Digital substations, turnkey solutions, equipment, refurbishment services, APM IMPROVING GRID RESILIENCE AND ENERGY EFFICIENCY HV direct current systems, flexible AC transmission systems, microgrids Independant Power Producers of New York September 14, 2017 14
US power industry outlook 10 year view Equipment orders, GW Generation, TWhs 40 35 30 25 20 15 10 5 0 Forecast 20 27 29 26 07 08 09 10 11 12 13 14 15 16e. 17-21 22-26 *year of NTP orders, excludes oil recip. engines + partial coverage of very small sizes of GT & ST E Storage PV Other REN Wind Offshore Wind Onshore Hydro Nuclear Steam Recip Gas GT Plant Source: GE MACA 2017 5,000 Historic 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 07 09 11 13 15 17 19 21 23 25 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Solar Wind Geothermal Biomass Hydro Nuclear Oil Gas Coal % Ren Source: GE MACA 2017 Thermal outlook Trump environmental policy not expected to revive coal New gas largely driven by gas price and coal/nuclear retirements Watch for expanded subsidies supporting existing nuclear Renewable outlook PTC & ITC drive strong short term wind & solar growth Offshore wind emerging driven by mandates Storage market to grow fast long term Age of gas but renewables go mainstream Source: GE Power Strategic Marketing Analysis 15
North America power industry Voice of Customer project Approach 30 Companies 23 Utilities & IPPs 68 Interviews 40% at CEO level 3 rd party interviews on GE s behalf Comissioner 9% Disruptions impacting the industry over the next 10-15 years Key strategic issues Innovation adoption Share results with study participants Regulator 9% IPP 28% Other 12% Utility 51% CCO, Chief Eng 8% Source: ECG Power Industry Executive Interviews & Analysis VP&GM 21% EVP, SVP, MD 24% Board, Chair, Pres, CEO 38% 16
Power industry disruptors Decarbonization, renewables growth, and gas availability are top of mind Disruptor Timeframes Unprompted Responses 0-5 Years 5-10 Years 10+ Years Other top disruptors based on total number of unprompted and prompted responses Number of Responses Source: ECG Power Industry Executive Interviews & Analysis 17
Power industry disruptors Interactive dialog elevates strategic discussions Disruptor Timeframes Unprompted Responses Prompted Responses 0-5 Years 5-10 Years 10+ Years Same timeframes as above Other top disruptors based on total number of unprompted and prompted responses Number of Responses Source: ECG Power Industry Executive Interviews & Analysis 18
Top 10 strategic issues customers are facing Regulatory, growth and cost issues prevail Source: ECG Power Industry Executive Interviews & Analysis 19