Enel X Electric Mobility Alberto Piglia: Copenhagen 22 March 2018 The evolution of the energy sector Decarbonization Decarbonization Electrification Digitalization New customer needs New customer needs lead to Digital electricity infrastructure Renewables penetration by By 2040, electricity will be the customized services investments: +45% between 2040: 60% first source of energy development with sustainable 2014 and 2016 consumption: share of 38% approaches The energy sector is experimenting a deep transformation Digitalization and customer centricity will change the paradigm Source: United Nations 2014; BNEF 2018, WEO 2017, IEA Electric Vehicles Market Result: Growth scenario Million cars per year 70 • 54% new sales will be electric by 2040 60 • US will be a major market in the next decade 50 • In EU, UK, Germany and France will lead the market 40 30 20 - Infrastructure gap - Customers TCOs 10 - Car Offerings must be addressed in order to develop the market 2015 2020 2025 2030 2035 2040 Rest of Europe France UK Germany Japan Rest of World China US 3 Source: Bloomberg, Long - Term Electric Vehicle Outlook, 2017 Electric Vehicles Market Driver: Falling battery prices Li-Ion Battery Prices drop as the technology driver of Falling battery prices are expected to undercut EVs mass market gasoline cars by mid-2020s 1.200 1.000 Observed price 800 18% learning rate 600 2017 implied price $209/kWh 2030 implied 400 2025 implied price $70/kWh price $96/kWh 200 0 2010 2015 2020 2025 2030 Source: Bloomberg New Energy Finance Source: Bloomberg New Energy Finance Note: Prices are an average of BEV and PHEV batteries and include both cell and pack costs. Cell costs 4 alone will be lower. Historical prices are nominal, future ones are in real U.S. dollars. Jaguar TeslaVW I.D.* Land Rover Toyota Trumpchi I-Pace pickup* VW I.D. CROZZ Defender RAV4 GS4 Mitsubishi eX BMW i5 Volvo 40.2* SUVs/Trucks Tesla Tesla M-B EQ Model X VW Model Y* Budd-e Chehejia Audi E-tron M-B B-Class BYD e6 NIO ES8* SUV* Quattro Porsche E-sport Renault DeZir Qianto Q50 Venturi Fetish Tesla Roadster Tesla Model S Sports cars M-B SLS eDrive Aston Martin Hyundai Ioniq GLM G4 NIO ES9 Audi R8 E-tron Tesla Roadster* RapidE Exagon Furtive Mahindra eVerito Geely Emgrand NIO EVE ChangAn SAIC E-Lavida LeEco LeSEE Eado Tesla Model 3 Mullen 700e Lucid Air Sedans CODA EV Audi E-tron Sportback BAIC EU260 Faraday Honda Clarity FF91 JAC iEV4 Renault Fluence BYD e5 Kia Ray BMW i3 Hyundai BlueOn M-B E-Cell VW e-Golf Chevy Bolt VW I.D. BEV model Hatchbacks Chevy Spark Honda Fit availability Renault Zoe ZE Nissan Leaf 2* Ford Focus Nissan Leaf BMW mini e 2008-20 Fiat 500e VW Mitsubishi i-MiEV Runabouts e-UpSeat Mii* Mahindra e2o Kandi Panda Smart ForTwo Bollore Renault Twizy Bluesummer Ford Transit VW e-Bulli 2020200820092010201120122013201420152016201720182019 BYD T3 Nissan NV200 TataSmith Edison Small vans IRIS ChangAn EM80 Peugeot Partner VW I.D. BUZZ M-B Vito Renault Kangoo + 0 50 100 150 200 250 300 350 e-Mobility Revolution Why it matters for Energy Industry Renewables Infrastructure & Networks Retail RES are irregular and intermittent I&N are affected by power congestion Commodities price are decreasing, Retail strategy is product oriented e-Mobility can contribute to stabilize the e-Mobility can avoid power congestion by e-Mobility can drive the retail in the energy system and provide flexibility balancing the grid, sharing transition, enabling the breaking of the infrastructures with many users connected boundaries among sectors thanks to new to multiple networks and decentralizing ancillary services to the grid such as supplying control and management energy if needed in change of remuneration. e-Mobility can drive the whole Enel value chain toward the new energy ecosystem 6 Enel Group today Evolution and achievements since 20141 #1 private network operator globally #1 renewable operator 65 mn end users and 44 mn digital meters ~40GW managed capacity2 +6 GW +4.5 mn end users +80% +8.4 mn smart meters3 additional capacity 20 mn free retail customers 47 GW thermal capacity #1 in Italy, Iberia and top 3 in Latam Highly flexible and efficient assets +5 mn free customers 10 GW +20% electricity sold in capacity closure free market Enel X +5.7 GW demand response 4 1. 2014-2017 delivery. As of 2017E Countries of presence 2. Consolidated capacity equal to 37 GW (including 25 GW of large hydro) 7 3. Including replacement of smart meters 2.0 in Italy equal to 1.4 mn. Enel global market share equal to 24% (BNEF 3Q17 Energy Smart technologies market Outlook) 4. Presence with operating assets Enel X Our portfolio of solutions in the 4 Global Product Lines e-Industries e-City e-Home e-Mobility Consulting and auditing Charging infrastructure Smart lighting Installation, maintenance service and repair services (public & private) Distributed generation Fiber optic wholesale Automated home Maintenance and other on/off site network management services Distributed generation & Energy efficiency Financial services OEM back-end integration energy services Demand response and Demand response and Home 2 Grid Vehicle Grid Integration Flexibility demand side management demand side management Addressing new customer needs with innovative technologies 8 Shaping the right business model… Overview of the possible business models that utilities can execute By perceiving Evs as a «fleet of Mobility batteries» on wheels, control Potential their charging and de-charghing provider to balance load or provide ancillary services Sell energy to EV Load owners, and try to balancer maximize revenues by Provide Mobility as a Service fixed or flexible tarrifs through aggregation of customers to let them partecipate to the Infrastructure energy market provider Provide charging Energy points, with different provider levels of infrastructure management Source: Arthur D. Little analysis Complexity Each utility should evaluate the different options, possibly combine some of them, and strategically decide on the future direction 9 …Based on a set of ancillary services Energy 2 Grid Car manufacturers Return of energy from the car Ancillary services battery to the electricity grid can through Vehicle 2 Grid allow the supply of portions of the network in emergency Return of power from car battery conditions or participate in the Ancillary services to the network; it is used for wholesale energy markets. through Vehicle 1 Grid frequency regulation. Each car contributes with the power that the Modulation of a charging session bidirectional charging station in order to provide frequency makes available. regulation services. It increases Demand Response the flexibility of the network and helps mitigate overload risks or Interruption of a charging session increase the capacity of Product developments in progress or deferred startup of renewables. the charging session; aggregation of each single start and stop is equivalent to the contribution of an interruptible heavy energy consumer. 10 Enel X e-Mobility ecosystem Open system, which ensures interoperability EVSE EVSE back-end JuiceBox JuiceBox AC DC Customers Aggregation Platform JuicePole EU / US Juice2Grid AC DCFC EVs OEM back-end Energy Front Office & Markets Interaction 11 Thank you.