Item 11- Staff Briefing: Austin Energy’s Resource, Generation and Climate Protection Plan to 2035 — original pdf

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Austin Energy Resource, Generation and Climate Protection Plan to 2035 Semi-Annual Update Lisa Martin Deputy General Manager & Chief Operating Officer January 2026 © Austin Energy Item 11Agenda Progress We’ve Made • Progress to Key Goals • Key Implementation Wins Changes We’re Seeing • Key Risks • Technology Readiness Actions Needed 2 Progress We’ve Made Goal Progress Progress to Carbon-Free Goal 100% Carbon-Free Generation as a Percentage of Load by 2035 77% 72% 70% 65% 65% 63% 63% 66% 60% 54% 49% d a o L f o % Reaching the 2035 Goal • • Local solar & batteries Import capacity increase • Wind & solar additions • Continue culture of innovation 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Fiscal Year Stack Emissions and Carbon Intensity Carbon Dioxide Stack Emissions Carbon Dioxide Intensity – All Generation 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 s n o T c i r t e M - h W M / 2 O C b l 800 600 400 200 - 2021 2022 2023 2024 2025 2021 2022 2023 2024 2025 lb/MWh Intensity Guardrail Nitrogen Oxides Stack Emissions Carbon Dioxide Intensity – Local Generation 3,000 2,500 s n o T c i r t e M 2,000 1,500 1,000 500 - h W M / 2 O C b l 1000 900 800 700 600 2021 2022 2023 2024 2025 2025 data is preliminary 2021 2022 lb/MWh 2023 2024 2025 Intensity Guardrail 60% Reduction in Carbon Dioxide Stack Emissions 2005 – 2025 6,000,000 5,000,000 4,000,000 3,000,000 2 O C s n o T c i r t e M 2,000,000 * * preliminary 6 Goals Progress Energy Efficiency Thermal Energy Storage Demand Response 89% 2027 Goal 75% 2030 Goal 73% 2027 Goal Local Solar Local Battery Storage 92% 2027 Goal 92% 2027 Goal 7 Progress We’ve Made Key Implementation Wins Since 2035 Plan Adoption Prioritize Customer Energy Solutions  Solar program reaches a new annual high for  Hired an Evaluation, Measurement & installed capacity in FY25 @ 18 MW  Energy Efficiency programs saved an additional 24 MW in FY25  Demand Response launches managed EV charging, prepares for residential battery program launch Valuation consultant in initial step to move to greenhouse gas avoidance goals  Adopted 2024 International Energy Conservation Code  Streamlined customer interconnection experience, especially considering expiring residential federal tax credits Develop Local Solutions  6.4 MW of City facilities enrolled in Demand  100MW, 4-hour battery contract signed for Response programs $288 million over 20-years  Solar on City facilities RFQ launched  Major transmission project work continues  Solar Landfill RFP launched  2nd battery storage contract under negotiation  Peaker Feasibility phase completed  All Resource RFP launched  Workforce Security Agreement included in all RFPs and contracts Continue Our Commitment to Decarbonization  Renewed 165 MW wind Power Purchase Agreement for 9 years  Wind RFP launched seeking shovel-ready projects to benefit from federal tax credits  Total stack emissions remain at record lows  Continuing efforts to exit coal  Assessing emissions reduction measures for existing local generation Further Our Culture of Innovation  Research and development partnerships with EPRI, University of Texas, and eSource  Engagement with nuclear researchers and manufacturers  Distributed Energy Resource Management System (DERMS) requirements developed  Solar Standard Offer launched first commercial project for 370 kW  Geothermal pilot revived after regulatory and financial uncertainties Changes We’re Seeing Key Risks Key Risks in 2035 Plan Have Increased or Remained Steady Growth in Energy Consumption Extreme Weather / Climate Risk ERCOT Market Changes Financial Risk Transmission Congestion Local Reliability Risk Local Air Quality & Non-Attainment Emissions from Fayette Power Project 14 Additional Risks Have Emerged Since 2035 Plan Adoption Federal Changes Large Customer Loads More State Oversight • Renewables tax credits expiring • • Federal grants withdrawn Federal uncertainty complicates long-term planning and infrastructure decisions • Uncertainty in demand forecasting • Raises risk of stranded investments • Creates volatility requiring sufficient ride-through capability • Raises expectations for rapid service delivery New legislative requirements • Redirect resources • Increase compliance workload • Create budgetary impacts 15 Changes We’re Seeing Technology Readiness Technology Readiness Monitoring • Advanced Nuclear • Carbon Capture Fuel Cells • • Hydrogen-Capable Peakers • Linear Generators Piloting • Geothermal Market Testing • Distributed Energy Resource Management System (DERMS) • Local Utility-Scale Solar Deploying • Customer-Sited Batteries Local Utility-Scale Batteries • • Demand Response • Emissions Reduction • Gas Turbines • Local Rooftop Solar The Resource Generation Plan calls for an all-of-the-above approach to generation resources with a priority on clean energy and continuing a culture of innovation. Austin Energy is continuously assessing technology updates that could help us reach our 2035 goals. 17 Actions Needed To Further Reliability, Affordability and Environmental Sustainability 2026 Implementation Priorities Near-Term Mid-Year Long-Term (beyond 2026) • Launch Updated Demand Response Program for Batteries • Seek new ways to grow Customer • Shift to Greenhouse Gas Energy Solutions programs Avoidance Tracking and Goals • Complete Battery Contract • Submit Transmission Projects to • Establish Full Suite of Beneficial Negotiations ERCOT for Approvals Electrification Incentives • Initiate Solar Landfill Contract Negotiations • Review Wind RFP Proposals • Receive and Analyze All-Resource RFP Proposals • Break Ground on Geothermal Pilot • Assess Existing Generation Enhancements for Added Capacity and Emissions Reductions • Submit to ERCOT Black Start RFP • Complete Pre-Development Phase for Battery Project, Solar Landfill Project, Wind Projects, and New, More Efficient Peakers • Set Up a Distributed Energy Resource Management System (DERMS) • Increase Transmission Import Capacity • Explore Advanced Nuclear • Reduce Reliance on Fossil Fuel Over Time 19 Utility-Scale Generation Implementation Phases • Landfill Solar • Wind Project • All Resource RFP • More Efficient Peakers 2nd Battery Storage Project 100 MW Battery Storage 9.9 MW Geothermal Pilot Phase 1 Feasibility Phase 2 Pre-Development Phase 3 Development Phase 4 Construction Exploratory phase to assess range of options available Refinement phase to narrow options and develop recommendation for Council Administrative and legal phase prior to construction Building phase leading to commercial operation Provide Council updates throughout all phases Upcoming Activities 2026 All Resource RFP Proposals Due Potential Recommendations to Council: • Battery Agreement • Solar Landfill PPA • Wind PPA Earliest Anticipated Recommendation for Council Action from All Resource RFP and Peaker Pre-Development Proposal Analysis Contract Pre-Positioning Community Engagement January March May *Months are approximate and subject to change based on offers received, resource availability and progress made 21 Customer Driven. Community Focused. ©Austin Energy. All rights reserved. Austin Energy and the Austin Energy logo and combinations thereof are trademarks of Austin Energy, the electric department of the City of Austin, Texas. Other names are for informational purposes only and may be trademarks of their respective owners. Backup Materials for Reference Progress to Energy Efficiency Goals Reaching the 2027 Energy Efficiency Goal Reaching the 2030 Thermal Storage Goal MWs 1000 900 800 700 600 500 400 300 200 100 0 2027 Goal: 975 MW 110 MW to Goal 865 MW* as of FY25 Energy Efficiency • Continue weatherization and other programs • Acknowledge market potential challenges • Shift to greenhouse gas avoidance measures MWs 100 90 80 70 60 50 40 30 20 10 0 2030 Goal: 40 MW 197 MW 10 MW as of to Goal FYTD 2025 30 MW* as of FY25 Thermal Storage • Assess future options to maximize District Energy & Cooling output • Continue programs for customer-sited thermal energy storage systems *Preliminary estimates Progress to Demand Response Goals 300 250 200 150 100 50 0 Goal: 270 MW 213 MW to Goal Reaching the 2035 Goal • Continue adding demand response capacity yearly • Two new programs: • Customer-Sited Batteries • Managed Electric Vehicle Charging 57 MW* as of FY25 • Continue culture of innovation Estimated: ~57 MW Goal: 78 MW 57 MW* as of FY25 21 MW to Goal FY 2025 Demand Response 2027 Demand Response 2035 Demand Response *Preliminary estimates Progress to Local Solar Goals MWs 400 350 300 250 200 150 100 50 0 Installed: 189 MW +18 MW FY25 +16 MW FY24 155 MW as of FY23 16 MW to Goal Goal: 205 MW 189 MW as of FY25 Goal: 405 MW 216 MW to Goal 189 MW as of FYTD 2025 Reaching the 2035 Local Solar Goal • Continue adding solar capacity yearly • Continue culture of innovation to expand access to solar and benefits of local solar generation • Improve customer interconnection experience Solar Capacity FYTD 2025 2027 Local Solar Goal 2035 Local Solar Goal Progress to Local Battery Storage Goal MWs 150 125 100 75 50 25 0 Goal: 125 MW 9.5 MW to Goal Installed: 15.5 MW FYTD 2025 Local Battery Storage +100 MW in development 100 MW pending approval and final negotiations 15.5 MW as of FY24 2027 Local Battery Storage Reaching the 2027 Goal • Finalize negotiation and execute second contract • Seek additional opportunities