Vistra Analyst Day - Generation€¦ · Vistra Energy Analyst Day Presentation 2018 2,300 8,017...
Transcript of Vistra Analyst Day - Generation€¦ · Vistra Energy Analyst Day Presentation 2018 2,300 8,017...
Generation
Jim BurkeChief Operating Officer
Vistra Energy Analyst Day Presentat ion 2018
VISTRA GENERATION OVERVIEW
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Strong safety and
performance
focus with cost
and capital
discipline
Luminant and Dynegy
fleets organizationally
integrated and
operating as
one team
Expecting to deliver
$225mm incremental
run rate from OPI by end
of 2019; deeper
“in-the-money” asset position
We have repositioned the company, and are focused on integration
and delivering immediate and sustainable value creation
Safe, reliable,
low-cost generation
Running as
‘One Fleet’Delivering OPI value
Vistra Energy Analyst Day Presentat ion 2018
FLEET OVERVIEW
OPERATIONAL PERFORMANCE INITIATIVE (OPI)
KEY TAKEAWAYS
Vistra Energy Analyst Day Presentat ion 2018
Coal
Natural Gas (CCGT)
Natural Gas & Oil (Peakers)
Nuclear
Solar
FLEET OVERVIEW
• ~15% of Generation
Adjusted EBITDA
• 4,730 MW
• Efficient CCGT fleet in a
gas constrained region
• Capacity pricing remains
significant
• ~33% of Generation
Adjusted EBITDA
• 10,821 MW
• Efficient CCGT fleet with
coal diversification
• PJM market provides strong
capacity revenues
CAISO
ERCOT
ISO-NE
PJM
NYISO
MISO
ISO states
1 2019E Adjusted EBITDA.
Vistra’s gas-predominant portfolio is the leading fleet in the desirable competitive power
markets, with a low-cost structure and significant earnings diversification
• ~47% of Generation adjusted EBITDA
• ~47% of Generation Adjusted EBITDA
• 18,356 MW
• Diversified fuel mix
• Best-in-class operations
ERCOT GENERATION (~$1.2 billion EBITDA)1
NE/NYISO (~$400mm EBITDA)1
PJM (~$800mm EBITDA)1
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Vistra Energy Analyst Day Presentat ion 2018
2,300
8,017
4,042 3,455
0
17,814
2,3004,500
7,838
3,539
180
18,356
Nuclear Coal CCGT Gas CT/ST Solar Total
GENERATION FLEET – ERCOT
Solar
Natural Gas (Peakers)
Coal Natural Gas (CCGT)
Nuclear
Comanche Peak (2,300 MW):
Low-cost nuclear, young site
Oak Grove (1,600 MW):
Low-cost lignite, commercial
availability of 96%
Forney (1,912 MW):
Commercial availability of 97%
Midlothian (1,596 MW):
Recently upgraded
Martin Lake (2,250 MW):
Commercial availability of 97%
• 7 assets (Odessa, Midlothian, Forney, Lamar,
Martin Lake, Oak Grove, and Comanche Peak)
make up ~80% of projected ERCOT
Generation EBITDA
- CCGT commercial availability of 96%
- Coal commercial availability of 96%
- Comanche Peak runs at sub $25/MWh all-
in cost, with target of sub $23/MWh
• Basis of our OPI efforts across all fuel types,
with best practices shared across the fleet
April 2018December 2017
The ERCOT fleet has rotated primarily to gas, with remaining coal and nuclear advantaged
ERCOT FLEET SUMMARY
Fuel Diversification
Capacity, MW
5
Odessa (1,054 MW):
70%+ capacity factor
Lamar (1,076 MW):
Commercial availability of 98%
Vistra Energy Analyst Day Presentat ion 2018
96
46
Retail Generation
2
12
2
1
Retail Generation
ERCOT POSITIONING
The ERCOT portfolio is well-positioned to meet Retail demand
and take advantage of tight market conditions
Annual Net Energy Position
TWh – Projected 2019
Peak Hour Net Energy Position – P99 Weather1
GW
1 P99 weather represents extreme summer temperatures in DFW (108 degrees Fahrenheit in August). Generation position does not reflect any third-party hedges.
Load(includes
swing)
Peakers
Steamers
Coal / CCGT
Nuclear
43
142
11
18
6
Vistra Energy Analyst Day Presentat ion 2018
45%
55%
68%
32%
GENERATION FLEET – PJM
Coal
Natural Gas & Oil (Peakers)
Natural Gas (CCGT)
Capacity
paymentsGas
Coal
Kendall (1,288 MW):
Upgraded 7FA, strong
capacity revenue
Fayette (726 MW):
Upgraded 7FA with
80%+ capacity factor • Top 5 sites (Hanging Rock, Kendall, Fayette, Liberty, and
Washington) represent ~60% of projected PJM EBITDA
- CCGT commercial availability of 97%
- OPI opportunities for the gas fleet
• 1/3 of our PJM assets cleared above rest of RTO pricing,
yielding an average capacity price of ~$156/MW-day
• Miami Fort, Kincaid, Zimmer “in the money”; ~20% of
projected PJM EBITDA
– Coal commercial availability of 90%
– OPI opportunities at the coal fleet
PJM Fleet Summary
The PJM fleet is a predominant gas fleet, with a diversified revenue mix
and high commercial availability
Fuel Mix
% of Capacity
Revenue Mix
%
165
10077
140
18/19 19/20 20/21 21/22
Capacity Price
$/MW-day (PJM Rest of RTO)
Energy
margin
Hanging Rock (1,430 MW):
Upgraded 7FA with 75%+
capacity factor
7
Washington (711 MW):
Upgraded 7FA with
70%+ capacity factor
Liberty (607 MW):
Upgraded 7FA with
70%+ capacity factor
Vistra Energy Analyst Day Presentat ion 2018
35%
65%
GENERATION FLEET – NE/NY
Masspower
Bellingham NEA
8 CCGT sites – CT, MA, ME, and NY
• Commercial availability of 96%
• Two sites: Milford and Lake Road represent ~45% of
Adjusted EBITDA of the region
- Higher capacity payments, firm gas transport
- Higher capacity factors (“in-the-money”)
• Two sites: Bellingham and Blackstone represent ~30% of
Adjusted EBITDA
High-quality assets requiring low capital
• Key sites in the fleet have the latest upgrades installed,
improving unit performance
- Output, heat rate, durations between outages
- Improved cycling, with low unplanned outages
Positioned well in a tightening market:
• Expected retirement of ~30-35% of ISO-NE generating
capacity1
• Challenges acquiring permits for new generation,
transmission, and pipelines, coupled with uncertain
renewables build out
Lake Road (827 MW):
Recently upgraded,
strong capacity revenue
Bellingham (566 MW):
Recently upgraded,
good capacity revenue
Milford (600 MW):
Recently upgraded,
strong capacity revenue
Energy
Margin
Capacity
paymentsGas
1 Source: ISO-NE.
Independence (1,212 MW):
High energy margin, lower
capacity revenue
Blackstone (544 MW):
Recently upgraded,
good capacity revenue
Casco Bay (543MW):
Low energy margin,
good capacity revenue
NE/NYISO Fleet Summary
NE/NY assets generate high capacity payments and cash flow
100%
Fuel Mix
% of Capacity
Revenue Mix
%
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Vistra Energy Analyst Day Presentat ion 2018
FLEET OVERVIEW
OPERATIONAL PERFORMANCE INITIATIVE (OPI)
KEY TAKEAWAYS
Vistra Energy Analyst Day Presentat ion 2018
Min/Max/Ramp
Improved Generation
Outage Reduction
Heat Rate
O&M Procurement
Comanche Peak
Forney/Odessa/Lamar
Martin Lake
2018 2019 2020
OPI PROGRESS
Running OPI throughout Luminant and
legacy Dynegy plants
• OPI completed or underway across the
combined fleet
– Coal sites engaged site by site
– CCGT sites engaged lever by lever: current
focus on planned outage, with additional
levers1 following over the coming months
• Joppa: Optimizing load across units improves
heat rate by ~3% (~$900k); repurposing
unused dozers from elsewhere in the fleet
drives ~$600k annual savings
• Kendall: Improved heat rate through daily
performance management, better visibility into
key drivers for control room operators
($1.2mm annual savings)
• Procurement: Fleetwide sourcing for
scaffolding yielding 20%+ savings.
Consolidation of suppliers, scope definition, use
of alternatives (e.g. drones)
Projected OPI Value
Realizing OPI Potential ($mm)
$50
$225
$16051%
Legacy DYN - Coal
Legacy DYN - CCGT
Procurement
Luminant
1 Examples: spend control tower, heat rate.
OPI Progress
OPI is in full swing and already delivering value
$225mm
100%Percentage run
rate achieved by
year end
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Vistra Energy Analyst Day Presentat ion 2018
Context
and
Action
OPI DEEP DIVE #1
Impact
293
66
468
109
2nd workshop
opportunity
Current hours
1st workshop
opportunity
Potential hours
• An ISO-NE plant has a Fall 2018 hot gas path and
generator major inspection outage scheduled for
~19 days
• Group conducted two brown paper exercises (i.e.,
structured process to challenge scope and duration)
to optimize the outage schedule
- The first was at the CCGT OPI kickoff, with nearly
40 CCGT leaders – plant GMs, ops & maintenance
managers, and plant engineers – from across the fleet
- The second, at the subject plant, was attended by
20 personnel from the region and contractors
• Parallel processing activities
- Disassemble generator at both ends at the
same time
- Install connective piping in parallel with
installing turbine enclosure
• Streamlining the critical path
- Conduct employment screening and
verification pre-outage
• Leveraging new technologies
- More effective cleaning techniques (ice
blasting or dry steam) for combustion turbine
rotor and cases
CCGT team employed “brown paper process” to shorten planned outage duration by 37%
Brown paper exercise in action, May 2018
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Vistra Energy Analyst Day Presentat ion 2018
Context
• The POC provides centralized 24/7
real-time operations support
• Using IOT remote monitoring,
advanced modeling, and diagnostics,
the POC identifies and forecasts
emergent issues impacting power
production
• Emergent equipment issues are
addressed proactively by
communicating directly to plant control
room operators
Luminant’s Power Optimization Center partners with the plants for reliability/efficiency gains
OPI DEEP DIVE #2
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Application
• POC will enable OPI efforts across the fleet
• Will be monitoring more than 400K sensors
throughout the fleet – temperature, pressure, acoustics,
and vibration data
– ~5,000 to 6,000 sensors per CCGT block or coal unit
– Approx. 50% of sensors throughout balance of plant
equipment (HRSG, condenser, cooling tower, etc.)
• Identify opportunities and work directly with the sites on
emerging issues
• More efficient spend management as well as optimizing
plant output
Gas Turbine
(3X CT)
Compressor
Generator
GeneratorElectrical
output to grid
Cooling Tower
Condenser
Steam
Turbine
Heat recovery
steam generator
Exhaust
gases
Feedwater in
Steam out
Air in Natural gas in
Heat Rate
2,550
200
550
225
225
45
100
700
800
Data stream health 550
Auxiliaries 150
Cross-cutting sensors
~6,000
Number of
sensors
Vistra Energy Analyst Day Presentat ion 2018
FLEET OVERVIEW
OPERATIONAL PERFORMANCE INITIATIVE (OPI)
KEY TAKEAWAYS
Vistra Energy Analyst Day Presentat ion 2018
Safe, reliable, and low-cost generation
• Strong safety performance
• Cost and capital discipline
Running as “One Fleet”
Delivering OPI value
• Expecting to deliver $225mm of incremental run rate by end of 2019
• Deeper “in-the-money” asset position
KEY TAKEAWAYS
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