Grid of the Future: Opportunities, Challenges, and Solutions

in Corporate Energy Procurement

October 5, 2016

Presented by American Council On Renewable Energy, Advanced Energy Economy, and Covington’s Energy Group

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Gary Guzy Senior Of Counsel Covington Mr. Guzy brings three decades of experience in environmental law, regulation, and public policy through his leadership in government, business, and academia. He is skilled at creating strategic partnerships and is known for bringing together diverse groups and resolving challenging public policy controversies through his close work with industry and environmental community leaders. Mr. Guzy recently served as Deputy Director and General Counsel of the White House Council on Environmental Quality. In this position, he helped develop and guide the Obama administration’s environmental, public health, and clean energy agenda, bringing business insights to government policy and coordinating policy across government agencies. In addition, Mr. Guzy was General Counsel of the U.S. Environmental Protection Agency and Counsel to the EPA administrator during the Clinton Administration.

Introduction and Overview

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Gregory Wetstone President & CEO American Council On Renewable Energy (ACORE) Gregory Wetstone is President and Chief Executive Officer of the American Council On Renewable Energy (ACORE). ACORE is a national nonprofit organization dedicated to advancing renewable energy through finance, policy, and market development. With member companies from across the spectrum of renewable energy technologies and close ties to the renewable energy finance sector, ACORE is the preeminent voice for the nation’s renewable energy industry. Prior to joining ACORE, Mr. Wetstone oversaw government affairs as Vice President for Terra-Gen Power LLC, a renewable energy company with utility-scale wind, solar and geothermal energy facilities. Prior to his six year term with Terra-Gen, he served as Senior Director for Government and Public Affairs at the American Wind Energy Association (AWEA) and Director of Programs at the Natural Resources Defense Council (NRDC), where he founded the legislative program. Earlier in his career, Mr. Wetstone was Senior Counsel to the House Energy and Commerce Committee, and played an important role in crafting a number of important laws including the 1990 Clean Air Act Amendments.

Keynote Luncheon

Corporate Procurement & the Renewable Energy Marketplace

October 5, 2016Covington & Burling

Leading the transition to a renewable energy economy

Gregory WetstonePresident and CEO American Council On Renewable Energy

Leading the Transition to a Renewable Energy Economy

About ACOREMembers

Non-profit, Membership Organization

Leading the transition to a renewable energy economy

The RE Transition has Truly Begun

Data courtesy of EIA and BNEF

• Since 2008, renewable energy projects have made up just over 50% of new capacity additions.

• In 2015, non-hydro renewables were the largest contributor for the second year in a row, providing over 16GW or 68% of total build.

Electric Generation Capacity Build by Fuel Type (2000 – 2015)

Domestic Investment Remains HighUS Total Renewable Energy Investment (2004 -2015)

Data courtesy of Fankfurt School – UNEP/BNEF

Technologies include all biomass waste-to-energy, geothermal, and wind projects greater than 1 MW; all hydropower between 1 MW and 50 MW; all wave and tidal projects; all biofuel projects with a

capacity of one million liters or greater per year; and all solar projects.

$5.6

$11.9

$29.1$33.2

$35.5

$23.9

$34.7

$49.1

$40.6

$35.3 $37.0

$44.1

$0

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$100

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U.S. Renewable Installations 2004-2015

New US Renewable Energy Generating CapacityImpressive Growth Despite Low Gas Prices and Flat Demand

17,456

16,382

Data Courtesy of AWEA, SEIA, GTM , FERC and NREL

The Growing Cost-Effectiveness of Wind and Solar Power

Charts courtesy of Lazard

82% Reduction in Solar LCOE since 2009 61% Reduction in Wind LCOE since 2009

Source: Lazard

Wind and Solar PV are Cost CompetitiveUnsubsidized Levelized Cost of Energy (2015)

Chart courtesy of Lazard

Renewable Energy Saves Consumers Money

Chart courtesy of DBL Investors

States with the most renewables are paying less for electricity

Average Retail Electricity Prices (2001 – 2013)

0

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Consumer Demand: Part 1Increasing Deployment of Distributed Solar

Annual Distributed Solar Installations 2010-2015

Data Courtesy of SEIA and GTM

Growing Consumer Demand: Part 2Commercial and Industrial PPAs

Corporate Demand for Renewable Energy: New Market Entrants US PPAs by Sector

Chart courtesy of BNEF

ACORE Corporate Procurement Working Group

Bi-annual Executive Meetings

Industry Insight Reports

Corporate Renewable Energy

Procurement Surveys

Guidance on Developing Successful

PPAs

Other Federal Policy and Finance

Guidance

Participating Members:

ACORE Corporate Procurement Working Group

First Annual Industry Insights Report for C&I End Users

Resource for Companies as they Develop Procurement Strategies

Intended to Help Simplify the Procurement Process

Offers Insights Into: Market Dynamics, Contracting, Policy and Legal Considerations, Financing, Integration, and Energy Storage

PwC, in collaboration with

ACORE’s Working Group,

developed a survey of 64

particularly active U.S.

companies to better

understand what is driving

corporate renewables

purchases, and what is

holding companies back

ACORE Corporate Procurement Working Group

PWC Corporate Renewables Procurement Survey Results, June 2016

Corporate Renewables Procurement Survey Results, June 2016

Corporate Renewables Procurement Survey Results, June 2016

Corporate Renewables Procurement Survey Results, June 2016

Corporate Renewables Procurement Survey Results, June 2016

Why corporate procurement is important

Looking Forward

Projected Impact of the Clean Power Plan on Renewable Deployment (Post 2020)

Solar Wind

Charts courtesy of EIA

The Paris AgreementCPP Alone Will Get Us Only Half Way

Gap of 375 to 475 MMT per year

Data basis: EIA MER, AEO2015, EIA CPP report, and INDC published targets.

Note: ‘AEO CPP Adjusted’ projection is based on fully implementing the CPP 32% reduction in Power Sector CO2 emissions by 2030, the HDV CAFE standard’s, and increased Residential/ Commercial/ Industrial Sectors’ energy efficiencies.

US Carbon Dioxide GHG Emissions (1990 – 2025)

Chart courtesy of the Energy Collective

Achieving the Paris AgreementThe Global Renewable Energy Investment Gap

$254 $246$270

$299 $317$346

$452

$562 $582

$485

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An Additional $5.2 Trillion is Needed to Achieve the 2 Degree Target

Source: Bloomberg New Energy Finance/CERES

Gregory WetstonePresident & Chief Executive Officer

American Council On Renewable Energy (ACORE)1600 K Street, NW; Suite 650Washington, DC 20006www.acore.org| www.uspref.org|www.energyfactcheck.org

Thank You

Leading the transition to a renewable energy economy

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Malcolm Woolf Senior Vice President, Policy and Government Affairs Advanced Energy Economy (AEE) Malcolm Woolf, Senior Vice President, Policy and Government Affairs at Advanced Energy Economy (AEE), leads AEE’s public policy efforts to promote the advanced energy industry, including federal, state legislative, and state regulatory initiatives, outside of California. These efforts include campaigns to expand corporate access to advanced energy, remove regulatory barriers in retail and wholesale markets, and inform policy makers about innovative, new technologies transforming the energy system. Before joining AEE, Mr. Woolf served as a Cabinet-level official with Governor Martin O'Malley. As head of the Maryland Energy Administration, he helped design, enact and implement an ambitious package of state laws to promote affordable, reliable, and clean energy. One of the programs launched to achieve the new standards was recognized by Harvard University’s John F. Kennedy School as one of the “top 25 innovations in American government.” An energy expert with experience at the national level and in the private sector, Mr. Woolf was chair of the National Association of State Energy Officials (NASEO), has testified before Congress on numerous occasions, and has been appointed to serve on several US DOE and EPA Advisory Committees.

Keynote Luncheon

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CORPORATE PROCUREMENT AND THE GRID OF THE FUTURE

Advanced Energy Economy Overview

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AEE Vision: We can build a prosperous world that runs on clean, secure, and affordable energy

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ip C

ounc

il Bu

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32 Source: Navigant Research for market sizes and BW Research for employment

Advanced Energy provides substantial economic benefits…

Economic Impacts

Florida AE industry is $6 billion, 140k jobs

Texas AE industry is $16 billion, 143k jobs

California AE industry supports 500k jobs

Iowa AE industry supports 23k jobs

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…And considerable employment opportunities.

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Companies are increasingly seeking advanced energy, but face barriers

On the demand side, interest is large and growing: 71% of Fortune 100 companies have set climate and/or clean energy targets, and 43% of Fortune 500

Among ICT companies, over 50% of Fortune 500 have set targets, and 20 ICT companies have announced a 100% RE goal

On the supply side, companies recognize the opportunity: 53% of wind PPAs in 2015 were signed by corporate purchasers

Corporate customers accounted for 3.2 GW of new RE in 2015

The problem is connecting supply and demand—in many states, companies simply cannot access advanced energy.

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Because of these barriers, only a few companies with goals have signed deals

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Rapid growth is driven by major companies and concentrated in restructured states

91% of 2015-16 deals are

in restructured

markets

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The opportunity: To create clear pathways for corporate advanced energy purchases

Today, some companies are able to navigate barriers and develop creative solutions to access advanced energy, but these are often complex and sometimes imperfect

Tomorrow, all companies should have a selection of clear, straightforward pathways to decide exactly how, when, and where they want to access advanced energy

Policy & regulatory change can unlock new options

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A few simple changes can increase corporate access to advanced energy

In states with market barriers, policy and regulatory changes provide the consumer with energy choice

Off-site Power

Purchase Agreements

Renewable Energy Tariffs

3rd Party On-site

Purchasing Community Renewables

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11 High Opportunity States (as identified by Meister Consulting Group)

40 www.aee.net / @aeenet / Washington DC San Francisco Boston / powersuite.aee.net

Questions?

Malcolm Woolf Senior Vice President, Policy and Government Affairs mwoolf@aee.net 202-380-1950

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Andy Jack Partner Covington W. Andrew Jack chairs the firm’s Clean Energy and Climate Industry Group and has a diverse corporate and securities practice with clients principally in the solar, advanced vehicles, industrial manufacturing, and sports and entertainment industries. He is ranked as a leading corporate lawyer by Chambers USA and he regularly advises corporations, board committees, and other forms of enterprises in mergers and acquisitions, strategic alliances, financing activities, Sarbanes-Oxley and 1934 Act compliance, corporate governance counseling, and executive compensation arrangements. Mr. Jack is a frequent speaker at clean energy conferences and he works closely as the firm’s membership liaison to SEIA and ACORE on a variety of matters to advance opportunities in clean energy, including as a founding member of the planning committee for SEIA’s Solar Finance Conferences and as a co-chair of ACORE’s Transportation Advisory Committee. Jon Fouts Managing Director, Global Power and Utility Group, Investment Banking Division Morgan Stanley Jon Fouts is a Managing Director in the Global Power & Utility Group within the Investment Banking Division at Morgan Stanley. In addition to covering a number of the corporate power clients, Mr. Fouts is responsible for the alternative investor, independent developer and wind / renewable business. Having joined Morgan Stanley in 1995, he has held numerous positions in the company and covered a number of the company’s important corporate and financial clients. Mr. Fouts has extensive experience in advising a wide variety of clients in landmark mergers and acquisitions, corporate finance and capital markets issues. Mr. Fouts’ academic background includes an M.B.A. from the Amos Tuck School of Business Administration at Dartmouth and an A.B. (Economics and Political Science) magna cum laude, Bowdoin College. Mark Perlis Of Counsel Covington Mark Perlis is a seasoned energy and environmental attorney with a broad-based federal regulatory and litigation practice encompassing all aspects of the electric utility industry. Mr. Perlis represents independent power producers, power marketers, traditional electric utilities, renewables developers and distributed resources. He specializes in regulatory and commercial matters associated with competitive electricity markets. Mr. Perlis also regularly represents energy trading companies in non-public FERC enforcement investigations. He also specializes in performing energy compliance audits and in advising Chief Compliance Officers and executive management on implementation of effective compliance programs.

Roundtable Discussion Moderator

Panelists

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Jackie Roberts Chief Sustainability Officer The Carlyle Group Jackie Roberts, The Carlyle Group’s Chief Sustainability Officer, is based in Washington, DC. Prior to joining Carlyle, Ms. Roberts spent 17 years at the Environmental Defense Fund where she launched and led the first-ever NGO-Business Corporate Partners, served as Director of Sustainable Technologies and Senior Director of the Climate and Energy Idea Bank. Previous jobs included a one-year faculty appointment at Harvard Business School and work as an engineer at EPA. Ms. Roberts holds a B.S. in chemical engineering from Yale University, an MBA from the Yale School of Management, and a Masters in environmental studies from the Yale School of Forestry and Environmental Studies. Jonathan Silver Managing Director Tax Equity Advisors Jonathan Silver, Managing Director at Tax Equity Advisors, is one of the nation’s leading clean energy investors. One of the country’s “Top 10 Green Tech Influencers”, Mr. Silver led the federal government’s $50 billion clean energy investment fund, the largest fund of its kind in the world. On track to make a $5 billion profit, it is among the most successful government investment programs ever. Mr. Silver’s team underwrote some of the largest, most innovative and most complex energy projects in the country, including solar, wind, geothermal, biofuels, advanced fossil, advanced nuclear, and advanced automotive technology projects. Several transactions were named “Deal of the Year” by leading investment trade publications. Mr. Silver regularly advises some of the largest institutional investors and companies in the sector. Earlier, he co-founded Core Capital Partners, a leading venture capital firm and was the COO of Tiger Management, one of the country’s largest and most successful hedge funds. He began his career at McKinsey & Company. Emily Williams Director of Energy Supply Altenex LLC Emily Williams, Altenex's Director of Energy Supply, builds and leads relationships with renewable energy developers. Working in concert with our analytics and technology teams, Ms. Williams matches renewable energy projects to available energy supplies based on strict criteria and Altenex's proprietary database. She supports Altenex clients with market intelligence, project and developer updates, and analytical assessments of the renewable energy projects available. Ms. Williams also leads state and federal policy initiatives, tracking the impact of policy changes on Altenex's customers.

Roundtable Discussion Panelists

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Thank you!

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