Introduction Executive Summary Vision & alignment High-level design Operational improvement CS Transformation KPIs People & culture

Is People & culture Next Steps Appendix

The energy market is evolving with the development of more

dynamic technologies

Energy journey over the last century .. Birth of a new distributed energy system – digitally driven
Power to gas

er
Solar cells

s um
Prosumer Utility scale Local solar

Co n
storage farms Electric
Electric vehicles vehicles

P2P
Large scale
Off-grid wind

a il
generation

Ret
Industry
Fast charging
2000-
1900 1960 1970
now
Microgrids Baseload power Offices
generation Dispatch
Tranmission
and distribution Balancing
automation Settlement
Blockchain
Solar Home
Local wind farm
Internet of Things generation
Smart grid
Demand response
Battery storage

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EY research has examined 10 core technologies impacting the global

market
The model is designed to incorporate both the reciprocal interactions of these technologies and their effect on the demand for electricity, and the cost of
generating, distributing and selling electricity

Solar PV Smart meters

Accelerating Enabling
Electric vehicles technologies Battery storage Artificial Technologies Grid edge
intelligence technologies

Home and building energy systems Microgrids Peer-2-peer energy exchange Cloud

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Timing of energy market disruption can be tied to three “tipping

points” in the energy market

Tipping point 1 (T1) The birth of the new

“Grid cost parity” of non-utility1 solar plus storage systems energy system

Tipping point 2 (T2)

Electricity and mobility
The price of battery electric vehicles reaches cost parity and industry convergence
performance parity with ICE2 vehicles

Tipping point 3 (T3)

The digital energy
The cost of transporting electricity exceeds the cost of market place
generating and storing it locally

Non utility: households and business customers producing electricity

1

CE: internal combustion engine

2

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California will reach tipping points first in the US due to investment

in renewables and lowering emissions

Birth of the new energy Electricity and mobility

The digital energy market place Illustrators1
system industry convergence

ENTITY Tipping Points Analysis

Tipping point 1 is 10 years
$800 away in California
Grid cost parity of
$700 Period of EV & ICE parity non utility solar plus T&D parity with
(cost + performance) storage systems non utility solar +
battery LCOE
$600
Fully delivered
cost of Tipping point 2 is 7 years
$500 electricity away in California
$/MWh

$400 Cost of transmission

2
1 and distribution
$300
3 Tipping point 3 is 18 years
$200 away in California
Non utility solar
$100 + battery LCOE

$0 1
Analysis is based on average profiles. In each geography,
1 6 11 16 21 26 31 36 there will be segments of the customer base for whom the
economics improve much sooner

Source: Utility impact model Central scenario California — EY Analysis

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California will reach tipping points before other regions in the US

Midwest (MIW)
West (WE)
T1 T2 T3
North East (NOE)
T1 T2 T3 WA
2036 2025-29 2044
MT NH T1 T2 T3
ND ME
2034 2025-29 2045 MN
VT

OR 2031 2025-29 2039

WI
ID MA
SD NY
WY MI
RI
CT
PA
California NV
NE
IA
OH MD
NJ
DE
(ENTITY) UT
IL
IN
WV
T1 T2 T3 CO
ENTI KS VA
TY MO KY
2028 2025-29 2036 NC
AZ
NM
OK
AR
TN
South East (SOE)
SC
MS AL GA T1 T2 T3

ERCOT* (ERCT) TX
LA 2042 2025-29 >2050
T1 T2 T3 FL

2038 2025-29 2045

*ERCOT: The Electric Reliability Council of Texas
Source: Utility impact model central scenario – EY analysis

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