1. Technical devices, economic signals and customer attitude impact on Demand Response October 15, 2012 Colette Lewiner

2. 2 Copyright © Capgemini 2012. All Rights Reserved Presentation Title | Date Status on the EU energy efficiency 2020 objectives Source: BP statistical report 2012, European Environment Agency, EurObserver – Capgemini analysis, EEMO14 EU-27 primary energy consumption June 13, 2012 new Energy Efficiency Directive: 17% decrease of EUs primary energy consumption by 2020 instead of 20% Requirement for Utilities to make energy savings equivalent to 1.5% of their annual sales each year from 2014 to 2020

3. 3 Copyright © Capgemini 2012. All Rights Reserved Presentation Title | Date In countries as France and Japan, peak shaving is a key issue during extreme weather conditions 3 A holistic approach to manage the peak load needs to be implemented. It should encompass: Generation capacities development (including incentives for peak power) Demand response: tariffs or other types of demand response programs Incentives for energy savings Grids reinforcement A holistic approach to manage the peak load needs to be implemented. It should encompass: Generation capacities development (including incentives for peak power) Demand response: tariffs or other types of demand response programs Incentives for energy savings Grids reinforcement Source: RTE Generation mix on February 8, 2012 at 19:00 The French electricity peak load reached 102,100 MW at 19:00 Nuclear plants availability largely contributed: 59,165 MW (55 reactors out of the 58 were in operation) France imported 7,845 MW from all its neighboring countries (max 9,000 MW) On EPEX Spot, day-ahead electricity prices jumped to 1,938/MWh RTE activated it EcoWatt demand response program in Brittany and PACA regions which resulted in a consumption reduction of respectively 2% and 3% EnergyPool curtailed 20 MW of industrial consumption which have been used for Brittany region In 2011, net new generation capacities have been added: 850 MW of CCGT 1,250 MW of renewable energies 450 MW of fossil-fired plant have been decommissioned New housing heating gas is regaining market share: close to 60% compared to less than 40% for electricity in 2011 (2008 electrical heating market share was 70%). This has decreased the potential electricity demand at peak hours by 450 MW But tariff-related demand response capacities have decreased from 6,000 MW in 2004 to 3,000 MW in 2011

4. 4 Copyright © Capgemini 2012. All Rights Reserved Presentation Title | Date Pilot programs results on peak shaving % peak shaving observed in various pilots worldwide Peak shaving: the use of displays helps but the customers behavior is key Several means exist for peak shaving and energy savings, that can be combined or not: Dynamic tariffs (that should be further developed with the mass roll-out of smart meters) Automation such as smart thermostat, smart appliances, in-home displays or web-based consumer portal Demand management programs such as customers alerts, social networks communication or feedbacks through bills, web, SMS, smart phones % peak shaving Range of peak shaving Source: Capgemini Consulting

5. 5 Copyright © Capgemini 2012. All Rights Reserved Presentation Title | Date Demand response potential for EU-27 by 2020 Demand Response study 2012 results snapshot Our study shows that peak shaving potential is significant while electricity savings potential is more limited In Capgemini Consultings Demand Response (DR) study*, the potential of peak shaving and energy savings is modeled on the basis of a baseline scenario: GDP growth 2010-20: 1.8% in average CAGR electricity consumption 2010-20: 0.7% Some existing energy efficiency programs such as Grenelle de lEnvironnement or White Certificates Assumptions are made on: Regulation (norms and standards, energy efficiency objectives, tariffs and incentive policies) Market design (possibility to monetize DR on wholesale markets, contracts optimization, capacity markets) Smart meters penetration and functionalities (for the households segment) And typical DR offerings are modeled with hypothesis on their adoption by customers *Demand Response study 2012 - Capgemini Consulting, VaasaETT and Enerdata 1 Normative hypothesis: 1 kWh saves 700g CO 2 (average European value considering avoided peak capacity is mainly gas-fired plants) 2 Expressed in equivalent of avoided consumption of large size cities (2 mio inhabitants and 150,000 commercials, average consumption of 8.2 TWh/year) 3 Expressed in equivalent of avoided construction of power plants (500 MW) Source: Capgemini Consulting Forecast scenario (dark bars) Dynamic scenario (light bars) Dynamic scenario % peak shaving % energy saving CO 2 emissions saving (in Mt) 14% 2% 7.6

6. 6 Copyright © Capgemini 2012. All Rights Reserved Presentation Title | Date Clients marketing and segmentation is key for successful Demand Response Customers awareness-raising is key for a sustained customers behaviors change New customer segmentation enabling Demand Response SEGMENTATION Better customer knowledge to adapt relationship strategy (feedback, advice, Demand Response, diagnosis, …) and channel management (paper, internet, …) CUSTOMER KNOWLEDGE Implementation of a media strategy and related KPIs to measure efficiency of each customer segment, each type of message, each channel and each media COMMUNICATION Build specific offerings adapted to the customer segmentation and relationship strategy (ex: advice on internet, in-house displays, electrical appliances remotely switched in/off, …) OFFERINGS Set up a pilots objectives and expectations, implement a system to monitor and analyze the results, set up customers recruitment campaigns, build on lessons learned ROADMAP EXAMPLES OF SEGMENTATION CRITERIA Sociological (behaviors…) Psychological (awareness to technology …) Economical (power purchase, energy bill …) Technical (type of heating system, of housing, …)

7. 7 Copyright © Capgemini 2012. All Rights Reserved Presentation Title | Date Mass roll-out finalized Mass roll-out by 2020 well-engaged Mass roll-out probably not completed by 2020 IE NL CH SE DK NO FI EE LT LV PL SK RO SI UK PT ES IT GR FR BE HU DE AT BG CZ LU Smart meters could be a Demand Response enabler 80% of electricity customers in EU Member States should have smart meters by 2020. All countries required to perform cost benefit analysis by September 2012 In September 2011, France has decided the mass roll out of 35 million meters from 2013 to 2020 but the starting date will be delayed. 4 technologies experimented for gas smart meters (18,500 meters) in France. Final mass roll-out decision should be taken in 2013 In Europe the Value Chain unbundling regulation, impacts negatively the return on smart meters investment and slows down decisions Source: ESMA, GEODE – Capgemini analysis, EEMO12, updated March 2012 Norway EDraft regulation issued in Feb. 2011 80% roll-out by 2016, 100% by 2018 Finland ELegislation into effect. At least 80% roll-out by end 2013 Estonia EMandatory nationwide roll-out under discussion Sweden E100% smart meters implemented in 2009 Denmark EDeployment by several DNOs. No national plan Germany E50 trials from 10 to 115,000 meters Nationwide roll out under discussion Customers can opt in or out GSimilar to electricity Poland ELegislation should be ready in 2012 Pilots run by all Utilities GSimilar to electricity Czech Republic ENational roll-out under discussion Several pilots under way Austria ELegislation adopted in 2010. Pilots from 10,000 to 240,000 meters GLegislation under discussion Belgium ENo legislation yet Several business case studies under way GSimilar to electricity France EDecision for roll-out of 35 million smart meters by 2020 taken in 2011. GGreenLys pilot, decision for mass roll-out by 2013 Greece ERoll-out under way GPlans for extending the electricity system to water and gas meters Italy E100% smart meters implemented in 2009 G80% smart meters to be installed by 2016 Hungary ELegislation adopted in 2011 GLegislation under discussion UK E27 million smart meters should be implemented by 2020 GSimilar to electricity Netherlands ELegal framework for voluntary installation adopted Several pilots under way Portugal ESmart meter substitution plan presented by the regulator Several pilots (30,000 to 50,000 meters) run Spain E100% smart meters should be implemented by end 2018 Ireland ENational roll-out planned for 2014-17 GStudies under way for gas Electricity and gas smart metering projects in Europe

8. 8 Copyright © Capgemini 2012. All Rights Reserved Presentation Title | Date Time-of-Use tariffs are important DR triggers: Ontario example 2.4% peak shaving (on a 6-hour period, from 11:00 until 17:00) 5.7% peak shifting (on a 3 or 4-hour period) Off-peak consumption shifting hardly quantifiable 6% consumption reduction Some peak consumption reductions havent been reported (notably lighting) during off-peak periods This dynamic tariff has an indirect effect on consumption patterns 3% savings on bills under the dynamic tariff (compared with the standard tariff) 75% customers have made bills savings The dynamic tariff is promoted as a tool allowing customers to analyze their consumption and control their bills This program resulted in peak shaving as well as peak shifting The dynamic tariff is promoted as a tool allowing customers to analyze their consumption and control their bills This program resulted in peak shaving as well as peak shifting Regulated Time-of-Use tariffs (c$/kWh) SUMMER WINTER WEEKEND HOLIDAYS Lessons learned

9. 9 Copyright © Capgemini 2012. All Rights Reserved Presentation Title | Date Visual tariff signal has also a significant impact on DR: Energy Orb example Energy Orb from PG&E (Pacific Gas and Electricity) is a visual indications to clients involved in energy demand management programs The device alerts business customers before and during an energy consumption reduction period Many technical devices exist to trigger consumption reduction. They are often expensive and their profitability remains to be established. Customers are reluctant to invest in these equipments and services and consumption reductions are not always fitting their expectations

10. The information contained in this presentation is proprietary. © 2012 Capgemini. All rights reserved. www.capgemini.com About Capgemini With more than 120,000 people in 40 countries, Capgemini is one of the world's foremost providers of consulting, technology and outsourcing services. The Group reported 2011 global revenues of EUR 9.7 billion. Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business Experience TM, and draws on Rightshore ®, its worldwide delivery model. Rightshore ® is a trademark belonging to Capgemini