Natural Gas in the German Residential & Commercial Market

Natural Gas in the GermanResidential & Commercial Market

Gas Industry mCHP WorkshopParis, 29 – 30 May 2008

Stephan Ramesohl (Dr.-Ing.)E.ON Ruhrgas AG

2

Key Questions

What is the current situation?

How does the framework change?

Which are the consequences from using natural gas in

the residential & commercial market?

Which are the strategic answers of the gas industry?

Which opportunities does mCHP offer?

3

0

100.000

200.000

300.000

400.000

500.000

600.000

700.000

1979 1985 1990 1995 2000 2006

Gas Electricity District heat

Heat Pum p Others Oilapartment

s

Source: state officies of statistics inclusing federal states from 1991

New Buildings – Overall Downward Trend With Declining

Market Share

2006: 140,000 homes

w/natural gas

Forecast for 2030: -50%;

of which 50% w/natural gas

2030

4

Loss in Market Shares as a Result of Upcoming Competition

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

1/05 2/05 3/05 4/05 1/06 2/06 3/06 4/06 1/07 2/07 3/07

Nat gas Electric heat pumps Wood pellet boilers Fuel oil Others

Mark

et

sh

are

s s

pace h

eati

ng

/hot

wate

r ab

solu

te

Source: E.ON Ruhrgas

5

High energy requirements of existing homes in the long

term

But: Existing Homes Remaining Core Market with High Energy Requirements

Share of homes [%]

Heat

dem

an

d

6

11,1 Mio (62,8 %)

Wohngebäude mit 1

Wohnung

(11,1 Mio Wohnungen)3,5 Mio (20,0 %)

Wohngebäude mit 2

Wohnungen

(7,1 Mio Wohnungen)

3,1 Mio (17,2 %)

Wohngebäude mit 3 oder

mehr Wohnungen

(20,7 Mio Wohnungen)

Existing Residential Buildings in Germany

31 Dec 2006, Federal Office of Statistics

Total residential buildings: 17.7 millionTotal apartments: 39.0 million

Large potential for technologies involving renewable energies

7

The Gas Customer‘s Voice: Rising Demand for Renewable Energies in Existing Homes

0%

5%

10%

15%

20%

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Natural gas users increasinglyshifting their focus torenewable energies

58 %

60 %

78 %

58 %

60 %

61 %

64 %

59 %

87 %

Source: E.ON Ruhrgas

Risk of losingapprox. 5.7 bn m³/a

8

Key Questions







9

50%

100%

150%

200%

250%

1990 1995 2000 2005 2010

En

erg

iep

reis

en

twic

klu

ng

fü

r H

au

sh

alt

sku

nd

en

in

%

bez.

au

f 1991

Driver 1: Uncertain Trend in Energy Prices

Natural gas

Extra-light

fuel oil

Electricity

?

?

Source: Federal Ministry of Economics

Dynamic developmentin particular for gas/oil

10

(10) EnEV (11) Betriebskosten Mietwohnungen (12) CO2-Gebäude- Sanierungsprg. (13) Energetische Modernisierung v. soz. Infrastruktur (14) EEWärmeG (15) Energetische Sanierung v. Bundesgebäuden

(6) Einführung moderner Energie- management- systeme (14) EEWärmeG

(1) KWK (2) Ausbau EE-Strom (3) CO2-arme KW-Technologien

(18) Umstellung Kfz-St. auf CO2-Basis

Driver 2: Energy and Climate Policy (Meseberg Package):

power: 14%R & C: 46%

(7) Förderprogramme für Klimaschutz und Energieeffizienz …(9) Einspeiseregelung für Biogas in Erdgasnetze (25) Energieforschung und Innovation

Industry: 25%

others: 15%

Affecting allsectors

Sector-specific

Share 2006 [%]

14 out of 29 measures relevant to natural gas, residential and

commercial (R & C) premium markets strongly affected

11

Most Important Consequences of Meseberg Package in Residential & Commercial Market (Date: Jan 2008)

Amended EnEV* (new buildings) 2009 (and possibly 2012)More stringent limit values for primaryenergy requirements -30% each

2009: knock-out criterion for gas condensing boiler2012: knock-out criterion for gas condensing boiler + solar

Renewable Energies Heat Act (currently only new buildings)

Compliance options Solar (4% collector area/m2 useful area) Gas condensing boiler

+ solar Electric heat pump (>50%, min 3.3/4.0) Problematic for some EHPs. Gas heat pump (>50%, COPmin 1.2) OK, achievable with

gas heat pump Bio oil (>50%, in condensing appliance)

. Biomethane (>50%, only CHP) Discrimination against

biomethane µCHP Possibly incentive for µCHP . (Mandatory) connection to group/district heat Discrimination against

gas (w/renewable energies/CHP) .

Additional efficiency (-15% vs. EnEV*) .

12

Key Questions







13

Consequences Gas condensing technology alone no option in future for new

buildings

Take proactive steps to secure position of natural gas in new buildings as a trend market

Goal: Defend nationwide gas supplies – object to extreme political stance (no natural gas in new buildings from 2020)

Establish new technology options

Existing buildings continue to be mass market with (so far) relatively free choice of technology

Condensing boilers to be developed further as the basic technology with a focus on existing homes(costs , condensing boiler/solar, biomethane)

Sales lost as a result of improved efficiencies/renewable energies to be compensated for by substitution of fuel oilFocus: customers with service connection as target group

14

Key Questions







15

Bio-methane

Strategic Answer, Part 1:Expand Technology Portfolio - Combine Natural Gas and Renewable Energies

Highly efficientcondensing heatingsystems (existing)

Gas heat pumpto use ambient heat

Naturalgas

Solar & gascondensing boiler

16

Strategic Answer, Part 2:Expand Technology Portfolio - Combine Heat and Power

hocheffizienteBrennwertheizungen

(Bestand)

Umweltwärme durchGaswärmepumpe

Solarthermie &Gas-Brennwertkessel

(Micro) CHP

Bio-methane

Naturalgas

Highly efficientcondensing heatingsystems (existing)

Gas heat pumpto use ambient heat

Solar & gascondensing boiler

17

Key Questions







18

Natural Gas-Based CHP to Curb CO2 EmissionsExisting single-family home as an example (annual heat + power balance)

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

district heat

coal

gas condensing

power mix D

gas condensing

power with combined-cycle

packaged CHP(group heat)

micro CHP micro CHP(optimised)

CO

2 em

issi

on

s in

t/a

e = 40% e = 32% e = 38%

boiler boiler

19

Opportunity: mCHP to Increase Gas Sales

BW

Grid electricity

Gas µKWK

- 2,900 kWh

EFH EFH

+ 5,000 kWh+ 25%

Gas: 21,000 kWh

Electricity: 4,400 kWh

Supplies

Gas: 26,000 kWh

Electricity: 1.500 kWh

Supplies

BW

Grid electricity

Gas µKWK+ 28,000 kWh+ 40%

MFH MFHGas: 69,000 kWh


Gas: 97,000 kWh


Supplies Supplies

- 22,000 kWh

20

0,00,10,20,30,40,50,60,70,80,91,01,11,21,31,41,51,61,71,8

60 70 80 90 100 110

Gesamtwirkungsgrad [%]

Str

om

ken

nza

hl [

-]

Brennstoffzellen

Stirling

Gasmotoren + weiter

100% Deckung

60% Deckung

Requirements for mCHP under Renewable Energies Heat Act Stirling concepts on the edge?

Threshold value:15% primary energy savingscompared to grid electricity and condensing boiler

EWärmeG(BaWü)

EEWärmeG(Bund)

total efficiency [%]

ele

ctr

. p

ow

er

rati

o [

-]

21

There is a future for natural gas in the domestic sector –but not this one …

DIE ZEIT, 11 Oct 2007

No solar panel,no wall insulation –

let‘s go …. !

Documents

Natural Gas in the German Residential & Commercial Market