How the Energy Efficiency sector can embrace Exponential Leadership principles to spark meaningful change for the environment. Oct 2019 Keynote presentation at The Power of Collaboration conference hosted by ESG / Direct Technology.

1. EXPONENTIAL ENERGY
Market Research & Trends that will Spark Change

2. SHERYL TULLIS
Direct Technology Partner
stullis@directtechnology.com
linkedin.com/in/sheryl
▪ West Point/Captain, U.S. Army Info. Systems
▪ P&G Brand Manager – New Ventures
▪ Microsoft .NET / MSN / Chief of Staff
▪ SVP for IoT / connected experiences
▪ Head of Department of Why
▪ Exponential Leadership Consultant1997

3. ▪ Why are we here?
▪ Why do our customers care?
▪ Why do partners work with us?
▪ Why do employees want to work here?
▪ What do we want to be known for?
▪ How can we energize change?

4. MAPMODELSMARKET

5. MAPMODELSMARKET

6. Why do we need exponential change?
Source: netburner.com

7. Utility Ecosystem
3808Utilities (G&Ts / Munis/ Coops, etc) 1
Includes ~2550 Munis 1
1055 Cooperatives 2
~200 IOUs 3
4 RTOs
3 ISOs
132.58 M
Residential Customers
19.2 M
C&I Customers
+
Sources in Notes

8. Utility Spend By
State (Millions)
Utility Market Overview
▪ Surveyed: Utilities, Cooperatives, G&Ts,
Municipal & State Utilities
▪ 2016: Federal government spent a total of
$1,654,528,284 on utilities (10,789
contracts to 1,986 companies, average
value of $833,096)
Metrics 2012 2013 2014 2015 2016 2017 2018
Market Size (Billions) $532.68 $551.10 $587.78 $561.02 $545.91 $559.65 $567.29
Total Firms 5,893 5,967 6,023 6,056 6,119 6,214 6,329
Total Locations (HQ & Branch) 17,595 17,814 17,891 18,082 18,268 18,552 18,896
Total Employees 651,234 649,014 650,419 655,978 655,174 653,904 653,614
Average Revenue Per Firm (Millions) $90.4 $92.4 $97.6 $92.6 $89.2 $90.1 $89.6
Average Employees Per Firm 111 109 108 108 107 105 103
Source: Consortium for Energy Efficiency

9. Spending Forecast
$532.7
$551.1
$587.8
$561.0
$545.9
$559.7
$567.3
$558.9
$548.5
$537.7
$526.9
$516.1
$505.3
Utility Spend, Actual and Forecast (Billions)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Source: Consortium for Energy Efficiency

10. Market Change
“We face competition from various entities and other forms
of energy sources available to customers, including self-
generation by large industrial customers and alternative
energy sources. We compete with other utilities for sales to
municipalities and cooperatives as well as with other
utilities and marketers for wholesale electric business.”
--WEC Energy Group

11. DSM Market Mix is Changing
▪ Spending on C&I mixed offering programs on the rise
▪ As of 2016: Residential home retrofit programs fell off the list (-9%)
Customer Class Program Type 2016 Expenditures
Commercial & Industrial Mixed Offerings $560.032,277
Low Income - $331,144,219
Residential Consumer Product Rebate for Lighting $244,220,441
Commercial & Industrial Custom $214,962,376
Commercial & Industrial Prescriptive $200,723,641
Commercial Small Commercial Prescriptive $193,282,914
Commercial Government, Nonprofit, MUSH $175,101,546
Most Common US Energy Efficiency Program Types by Expenditures
Source: Consortium for Energy Efficiency

12. EE & Demand Response are Growing
▪ Demand response: 16% of US electric DSM expenditures in 2016
(increased by 11% compared to 2015)
▪ All regions saw increases—NE experienced greatest relative growth,
increasing by 73 percent and $33 million additional spend
Source: energy.gov

13. EE & Demand Response Sectors
Region Residential Low Income C&I Other No Breakout Total
Northeast 317 15 491 0 21 843
Midwest 613 11 609 54 31 1,319
South 574 51 697 12 98 1,432
West 400 11 547 211 371 1,540
Total 1,903 89 2,344 277 521 5,134
2016 US EE Gross Incremental Capacity Savings (MW)

14. © 2017 General Electric Company - All rights reserved
DECARBONIZATION ELECTRIFICATION 2.0
ELECTRIFICATIONOFENERGY-
INTENSIVEUSES
By2026, RENEWABLESwill
represent 40% of global installed
generationcapacity*
DECENTRALIZATION
GROWING PENETRATIONof
Distributed EnergyResources
IMPACT
• Endusersbecome activeactors
of thepower system (‘pro-sumer’)
…growing gridcomplexity
IMPACT
• Step increase in electricity
consumption…accelerating
Decentralization
IMPACT
• Growing share of renewables
an increasing challenge to the
traditionalpower system model
DIGITIZATION
EXPONENTIALGROWTH
of connecteddevices
& smartsensors
IMPACT
• Realtime decision making
becomes possible …new
software solutions open
breakthroughoptimization
Powerful trends areshapingthe nature of energy
2
Source: GE

15. Hot Spots
Software
▪ Analytics
▪ Management & Control
▪ Virtual Power Plant
Technology
▪ Solar PV
▪ Energy Storage
▪ Wind
▪ Combined Heat &
Power
▪ Others
End Users
▪ Industrial
▪ Government &
Municipalities
▪ Commercial
▪ Residential
▪ Military
Source: marketresearchfuture.com

16. Hot
Spots
End Users
▪ Industrial
▪ Government &
Municipalities
▪ Commercial
▪ Residential
▪ Military
Software
▪ Analytics
▪ Management &
Control
▪ Virtual Power
Plant
Technology
▪ Solar PV
▪ Energy Storage
▪ Wind
▪ Combined Heat
& Power
▪ Others

17. Market
Insights
Traditional DSM
evolving to demand
response and consumer-
generated grid
Installed DER capacity,
including distributed
generation, energy storage,
microgrids, EVs, and DR,
will increase significantly
over the next decade
Global electric power
industry is undergoing a
transformation from
centralized generation
toward the Energy Cloud: a
multidirectional combination
of DER/smart grid solutions
While utility customers
motivated by cost and
environmental benefits rapidly
adopt DER, grid operators are
beginning to encounter
numerous challenges
associated with the variability
and changing demand
patterns of renewables.
Rising demand for vendor-
based energy business
model disruptors that can
provide turnkey energy as
a service (EaaS) solutions.
Opportunities in new or
expanded government
pilots

18. Source: GE
Market Foresights
➢Navigant Research anticipates that
integrated demand management - a
mix of energy efficiency and DER -
will create a competitive advantage
PORTFOLIO
ADVISORY
SERVICES
EE AND
BUILDING
OPTIMIZATION
OFFSITE
ENERGY
SUPPLY
• Strategic portfolio guidance
• Portfolio benchmarking
• DER technology feasibility, real-time EM&V
• DER financing models
• Lighting
• Energy savings performance contracting
• C&I energy efficiency retrofits
• Building optimization and retrocommissioning
• Retail choice procurement
• Offsite LFGE procurement
Traditional Efficiency Solutions
EE AND
BUILDING
OPTIMIZATION
PORTFOLIO
ADVISORY
SERVICES
OFFSITE ENERGY
SUPPLY
ONSITE ENERGY
SUPPLY
LOAD
MANAGEMENT/
OPTIMIZATION
• Project energy auditing
• Project ECM feasibility, manual EM&V
• ESCO financing model
• Lighting
• Energy savings performance contracting
• C&I energy efficiency retrofits
• Building optimization and retrocommissioning
• Retail choice procurement
• Offsite LFGE procurement
• Large offsite wind/solar procurement
• Onsite solar PV
• Combined heat and power
• Onsite diesel and natural gas geosets
• Microturbines, fuel cells
• DR capacity market participation
• Energy storage, microgrids, EV charging
• Intelligent BEMs and BACs
New DER Solutions
Source: Forbes.com / Pike Research

19. MARKETMARKET MAPMODELS MAP

20. Rise of DERMS & Demand Response
Moving forward
with large-scale
deployment
11%
Moving forward
with pilot testing
31%
Approving
budgets
12%
In planning/
investigatory stage
35%
No strategy
11%
DERMS DEPLOYMENT STATUS
Shift from centralized to
distributed power generation
Increasing share of renewable
power generation
Growing mandates and
updated policies
Source: marketresearchfuture.com

21. Integrating DERMS
NO STRATEGY (19%)
OTHER (3%)
UPGRADE EXISTING SOFTWARE
SYSTEMS TO SUPPORT DERS (10%)
STRATEGY FOR BUILDING DERMS
BETTER INTEGRATE LEGACY & NEW SYSTEMS TO
SUPPORT DERS (48%)
BUILD NEW STANDALONE SYSTEM TO
INTEGRATE WITH DIFFERENT SYSTEMS (21%)
Source: utilitydive.com

22. Grid
Optimization
Grid Management
Grid Analytics
Microgrid
DER Aggregation
Integrated Distribution Planning (IDP)
Case Studies:
HECO IDP | Alectra/Enbala Microgrid

23. ▪ Outsourcing to energy business model disruptors who can
provide turnkey energy as a service (EaaS) solutions are on
the rise.
▪ EaaS is the management of one or more aspects of an
energy portfolio—including strategy, program
management, energy supply, energy use, and asset
management—by applying new products, services,
financing instruments, and technology solutions.
▪ Annual global market for deployment of C&I EaaS is
expected to reach $221.1 billion by 2026.
Energy as a
Service (EaaS)
Source: Forbes / Navigant Research

24. The electric power industry is facing a
fundamental shift from centralized
generation toward a more decentralized
grid known as the Energy Cloud.
Energy Cloud
Source: Forbes / Navigant Research

25. Energy Cloud Increased opportunities for data sharing, AI, & ML
Source: Forbes / Navigant Research

26. Energy Storage
Modeling
▪ Utilities should develop “new modeling tools and
new planning frameworks that allow for a more
complete evaluation of flexible resources, such as
energy storage."
▪ State-of-the-art modeling requires three critical
criteria to incorporate and solve for the complexities
of a renewables-focused electricity market:
1) sub-hourly dynamics consistent with observed and
forecast real-time prices, loads and renewable
production;
2) impacts of weather on renewable generation, load and
market prices;
3) imperfect foresight included in unit commitment
optimization.
The National Association
of Regulatory Utility
Commissioners (NARUC)
Resolution 11/14/18 :
Source: greentechmedia.com

27. Outcomes
Resource Planning
▪ Predictive analysis for resource prioritization & optimization
▪ Dashboards for resource capacity & demand
▪ Visibility of resource allocation across entire portfolio
▪ Accurate resource forecasting for identifying gaps
Resource Execution & Change
▪ Workflows for instilling resource governance
▪ Standardized resource approvals and allocations
▪ Increased agility with what-If scenario planners to adjust
resources when plans or priorities change
Resource Tracking & Measurement
▪ ROI of your deployed resources
▪ Mobile time tracking
▪ Tracking and tracing budgets versus actuals
▪ Capitalization of labor cost

28. EXPONENTIAL
ENERGY
LEADERSHIP
MODEL

29. EXPONENTIAL
ENERGY
LEADERSHIP
MODEL

30. Proprietary and confidential. ©Direct Technology, 2019
“Incremental is satisfied with 10%.
Exponential is out for 10X.”
--Mark Boncheck (Harvard Business Review)

31. Proprietary and confidential. ©Direct Technology, 2019
Exponential Organizations
▪ Incremental mindset: making something better
▪ Exponential mindset: making something different
▪ Entrepreneur and author Salim Ismail: “An exponential organization is one
whose impact (or output) is disproportionately large—at least 10 times
larger—than its peers because of the use of new organizational techniques
that leverage accelerating technologies."

32. cc c
Source:PaulW. Taylor&Dustin Haisler
Exponential Change

33. Exponential Energy: 4 Levers
▪ Third-Party Data Integration
▪ Performance and Innovation Metrics
▪ Predictive/Contextual Customer Experience
▪ Energy Cloud

34. Third-Party Data Integration
http://bit.ly/HoosierESG

35. Performance and Innovation Metrics
ENERGY.GOV KPIs
▪ Controlling energy costs and energy
consumption
▪ Minimizing environmental impacts
▪ Enhancing the image through
marketing
▪ Improving load forecasting, energy
management, and reliability
2019 State EE Scorecard:
https://aceee.org/research-report/u1908

36. Performance and Innovation Metrics
The Commercial Buildings
Integration Program
defined different tiers of performance
metrics to address the needs of
various users.
TIER 1 METRICS
Yields general monthly and annual results
TIER 2 METRICS
Yields seasonal, daily, hourly, or subhourly results;
itemized by type of end use
INDICATORS
ID trends, often used to set policy and demonstrate
progress toward goals.
Source:energy.gov

37. Contextual & Predictive
Experiences
Sense installs in your home’s
electrical panel and provides insight
into your energy use and home
activity through iOS, Android, and
web apps.
Source:sense.com

38. 6 Characteristics Of
Exponential Organizations:
1. Visionary Customer Advocacy
2. Data-Driven Experimentalism
3. Optimistic Realism
4. Extreme Adaptability
5. Radical Openness
6. Hyper-Confidence

39. “If customers see their needs and
desires being attended to at the
highest levels, they are much more
willing to persevere through the
chaos and experimentation that
often happens with exponential
growth.”
1. Visionary Customer Advocacy
2. Data-Driven Experimentalism
3. Optimistic Realism
6 Characteristics Of
Exponential Organizations:

40. “To create order out of high-speed
chaos requires a process-oriented
approach that is ultimately nimble
and scalable.”
1. Visionary Customer Advocacy
2. Data-Driven Experimentalism
3. Optimistic Realism
6 Characteristics Of
Exponential Organizations:

41. “Leaders who are able to articulate
a positive outcome through any
scenario, even downside scenarios,
will be able to help maintain
objectivity within their teams.”
1. Visionary Customer Advocacy
2. Data-Driven Experimentalism
3. Optimistic Realism
6 Characteristics Of
Exponential Organizations:

42. “As a business scales and its activities
morph, so too must its management.
…. Constant learning is critical to
staying on the exponential curve.”
4. Extreme Adaptability
5. Radical Openness
6. Hyper-Confidence
6 Characteristics Of
Exponential Organizations:

43. 4. Extreme Adaptability
5. Radical Openness
6. Hyper-Confidence
“While many leaders and their
organizations ignore most of the
criticism and suggestions [from within
and beyond], creating an open
channel to the crowd and the
mechanisms to determine signal from
noise can provide new perspectives
and solutions, allowing access to
whole new layers of innovation.”
6 Characteristics Of
Exponential Organizations:

44. 4. Extreme Adaptability
5. Radical Openness
6. Hyper-Confidence“Two of the most important
personality traits for an exponential
leader to have are the courage and
perseverance to learn, adapt and
ultimately, disrupt the given
business.”
6 Characteristics Of
Exponential Organizations:

45. “But even more important,
exponential change begins
with leaders who believe in
its possibility.”
--Davood Ghods,
Former Head of Office of Technology
State of California

46. Proprietary and confidential. ©Direct Technology, 2019
Source: Atomic Habits by James Clear
Exponential Leadership

47. Map systems and
theories of change
Empower sustainable
business models & orgs
Catalyze levers of impact
Connect networks across
sector, industry, and geos
Promote diversity of
ideas and engagement
Understand S and
exponential curves
Embrace and model
convergence
Identify levers of
disruption
Engage early adopters
Build uncommon
partners
Seek the big picture
Explore external trends
See and connect patterns
Span time horizons
Shape stories and
roadmaps
Observe and question
openly
Reframe opportunities
Visualize possibilities
Iterate to learn
Promote radical candor
Exponential
Leadership
Combining the mindsets, skillsets, and
networks of futurists, innovators,
technologists, and humanitarians to
create abundant futures.
Humanist
You make
choices that
positively
impact people
& communities
Technologist
You accelerate
possibilities
with
technology
Futurist
You imagine
bold ideas
Innovator
You bring
ideas to life
Optimistic
Bold
Imaginative
Ambitious
Visionary
Optimistic
Bold
Imaginative
Ambitious
Visionary
Optimistic
Bold
Imaginative
Ambitious
Visionary
Optimistic
Bold
Imaginative
Ambitious
Visionary

48. MARKETMARKET MAPMODELS MAPMODELS

49. 5 Keys to Leading Exponential Programs
1. Internal Assessment: Understand the business challenges facing your utility today and what
customer expectations will dictate over the next 3-5 years.
2. Roadmap Development: Create a strategic plan that addresses the business cases and
conditions your utility needs to solve for.
3. Partnerships: Identify the internal departments and external solution partners necessary to effectively
deploy your initiatives.
4. Customer Focus: Build roadmaps to design systems that give customers choice. Successful utilities
will increasingly act as service providers managing a grid designed to optimize energy flows with the customer
in mind.
5. Integration & Optimization: Based on the strategic roadmap, integrate technology into the
grid to forecast and optimize grid operations.

50. Mapping
Your
Customer
Journey
http://bit.ly/30PI4vq

51. Customer
Journey
Thought
Starters

52. SPARK
EXPONENTIAL
CHANGE!
http://exponential.energy