Offshore Wind in Germany

One important (and challenging)

element of the Energy Transition

(Energiewende)

Discussion on September 28th, 2015

Dr. Georg Maue, Counselor Climate and Energy Policy Embassy of the Federal Republic of Germany 4645 Reservoir Road, Washington, DC 20007

Tel: +1 (202) 298 4355 Fax: +1 (202) 298 4391 E-mail: wi-6@wash.diplo.de

Three target areas of the Energiewende

Affordability, reliability and environmental protection are interlinked.

2

Motivation for the German Energy Transition (Energiewende):

Previous energy business as usual was not sustainable, would

cause huge economic and ecologic damage, therefore:

Two pillars of the Energiewende

The energy transition’s foundation are renewables and reduced energy consumption.

3

Renewable Energy

• Steady growth

• Environmentally friendly

Market and system

integration

Energy research and

development

Supporting fields of action

European energy and

climate policy

• Reduce energy consumption

• Cost-efficient

Energy Efficiency

Key legislation:

Energy Saving Ordinance

Heating Cost Ordinance

Key legislation:

Renewable Energy Sources Act

Renewable Energy Heat Act

Integrated policy package for the Energiewende

The German energy system is being transformed in all sectors.

15-09-28 Speaker 4

Electricity

• Priority access for

renewable energies

• Nuclear phase-out

• Support scheme for

renewable energies

Heating

• Renewable Energies

Heat Act

• Market Incentive

Programme (MAP)

Transport

• Emission reduction quota

for biofuels in transport

• Governmental plan on

e-mobility

Research & Development

• (Sixth) Energy Research

Programme (Federal

Government)

• Public research funding

> €150 million in 2012

2050 Energiewende targets

Renewables are on track. Additional measures will bring climate and energy efficiency on track.

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Speaker

Climate

Renewable

Energies

Energy

Efficiency

% final energy

consumption

% gross electricity

consumption

% primary energy

consumption (vs. 2008)

final energy productivity

building renovation

% greenhouse gas

reduction (vs. 1990)

2020 2025 2030 2035 2040 2050

+2.1% p.a.

doubling of renovation rate: 1% 2%

-40-55

-70-80 to -95

35 40 to 4550 65

8055 to 60

1830

4560

-20

-50

12%*

27.3%

- 8.9%

0.2%* p.a.

~1%* p.a.

-22.6%*

Achieved

2014

5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

EU 2030 /ETS

Efficiency Strategy

Buildings Strategy

Transmission Grids

Distribution Grids

Monitoring

Evaluation of Incentive Regulation OrdinanceRevision of Incentive

Regulation Ordinance

Progress report Monitoring Report 2015 Monitoring Report 2016

Design of Electricity

Market

Drafting of renovation road

mapDrafting of holistic buildings strategy

Energy Saving Ordinance Process and Renewable

Energies Heat Act

Scenario framework 2015 Grid development plan 2015 Amendement to the Federal Requirements Plan Act

Expert report Green paper White paperMarket Design Act (Energy Industry Act

revision)

Energy Efficiency Action Plan Implementation of Energy Efficiency Action Plan incl. EED implementation

Renewable Energy

Resources Act

EU 2030 targets Deployment of 2030 governance

Reform of ETS (market stability reserve) and post-2020Negotiation of new EU legal framework (RE, ETS, etc.)

2014 2015 2016

Pilot auction

rulesRES Act 2.2 Pilot auctions & construction

Report on

effectsRES Act 3.0 (auctions)

5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

EU 2030 /ETS

Efficiency Strategy

Buildings Strategy

Transmission Grids

Distribution Grids

Monitoring

Evaluation of Incentive Regulation OrdinanceRevision of Incentive

Regulation Ordinance

Progress report Monitoring Report 2015 Monitoring Report 2016

Design of Electricity

Market

Drafting of renovation road

mapDrafting of holistic buildings strategy

Energy Saving Ordinance Process and Renewable

Energies Heat Act

Scenario framework 2015 Grid development plan 2015 Amendement to the Federal Requirements Plan Act

Expert report Green paper White paperMarket Design Act (Energy Industry Act

revision)

Energy Efficiency Action Plan Implementation of Energy Efficiency Action Plan incl. EED implementation

Renewable Energy

Resources Act

EU 2030 targets Deployment of 2030 governance

Reform of ETS (market stability reserve) and post-2020Negotiation of new EU legal framework (RE, ETS, etc.)

2014 2015 2016

Pilot auction

rulesRES Act 2.2 Pilot auctions & construction

Report on

effectsRES Act 3.0 (auctions)

Implementation of the most important projects

6

Energiewende is planned and implementation is on track.

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92%

71%

56%

89%

82%

68%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

The increased development of renewable energyis "important" or "extremely important"

Phasing out nuclear energy by 2022 is the right decision

The energy transition - moving towards a predominantenergy supply from renewable sources - is right

The energy trasition is "important" or "very important"

The aims and targets of the energy transition are right

Aggregated index for acceptance of the energy transition(for businesses and the general public)

Percentage of people that agree or strongly agree with the given statement

Public acceptance of the Energiewende

The energy transition enjoys a high level of approval among the German public.

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German gross electricity production

Renewables have become the second biggest electricity source in just ten years.

15-09-28 Speaker 8

10.2% gas

lignite 25.6%

nuclear 27.1%

22.8% hard coal

5.2% others

4.1% wind

1.3% biomass

3.3% hydro

0.1% solar

0.4% waste

9.2%

2004

9.6% gaslignite 25.6%

nuclear 15.9%

hard coal 18%5.2% others

8.6% wind

7% biomass

3.4% hydro

5.8% solar

1% waste

25.8%

2014 total: 610 TWh

renewables share: ~157.4 TWh

total: 617.5 TWh

renewables share: 56.6 TWh

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27.8

0

5

10

15

20

25

30

35

40

45

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2000 2005 2010 2015 2020 2025

Re

ne

wa

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ssh

are

in %

45.0

40.0

Overall target corridor

In 2025: between 40% and 45% RES-E

In 2035: between 55% and 60% RES-E

Capacity additions

Onshore wind and PV2 500 MW (2.5 GW) per year each

Bioenergy 100 MW per year

Offshore wind 6.5 GW by 2020, 15 GW by 2030

Focus on Wind and PV as most cost-effective solutions

(1) Renewables share in gross electricity consumption

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Renewable power capacities worldwide

After hydropower, wind is the leading renewable source. Its main market is China.

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Wind market development worldwide

The German wind market has grown steadily, while other European markets have experienced highs and lows.

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10000

20000

30000

40000

50000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

annually installed capacity

(MW)

Rest of the world

Rest of EU-28

Poland

Sweden

France

Italy

United Kingdom

Spain

Germany

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Electricity generation per federal state in 2023

Generation capacity in the North will cover demand in the South.

Lignite

Hard coal

Natural gas

Oil

Pump storage generation

CHP

Other conventional

Wind onshore

Wind offshore

PV

Biomass

Hydro power

Other renewable

Demand

Pump storage consumption

Offshore wind potential

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Figures for Germany Capacity (MW)

In operation (as of June 2014) 628.3

Under construction approx. 2,300

Electricity generation offshore wind 2012: 675 MWh(June 2014 estimate: 2.5 TWh)

Target 6.5 GW by 2020, 15 GW by 2030

Large offshore wind will support the system as baseload power plants.

Corridor Remuneration in ct/kWh Degression

Hydropower - 3,50 – 12,52 -0.5 %/a from 2016

Landfill, sewage

and mine gas

- 3.80 – 8.42 -1.5 %/a from 2016

Biomass 100 MW (gross) 5.85 – 23.73

(dependent on fuel and size)

-0.5 % every three months

from 2016

Geothermal 25.20 - 5.0 %/a from 2018

Wind energy

onshore

2,400 – 2,600 MW

(net)

Standard tariff: 8.90,

for at least 5 years;

Minimum 4.95

-0.4% every quarter from

2016

Wind energy

offshore

- Initial tariff: 15.40 for min.12

years;

Option: 19.40 for min. 8 years if

installed before 2020

Minimum 3.90

Standard tariff: - 0, 5

ct/kWh in 2018, 1 ct/kWh in

2020

- 0,5 ct/kWh/a 2021;

Option: - 1 ct/kWh in 2018

Solar energy

(PV)

2400 – 2600 MW

(gross)

9.05 – 12.89 (and tenders for

ground-mounted PV)

-0.5 % per month from

09/2014

Technology specific support levels EEG 2014

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Main Support Instrument: Feed-In Tarif

• Largest city on the German North Sea coast –population: 112,982.

• Situated at the Weser River estuary and is part of the Federal State of Bremen.

• Port and maritime industry (shipbuilding, engineering, steel and plant construction). Germany’s leading fish processing location.

• 5.92 Mio. TEU containers processed in 2011.

• Europe‘s biggest shipment center for cars: 2.13 Mio. in 2011.

• A nucleus for renewable energy sources with a focus on offshore wind, marine science and industry logistics.

• Tourism.

Seaport City Bremerhaven

Bremen

Bremerhaven

Slides on Bremerhafen provided by Dr. Joachim Lohse, Senator for Environment, Urban Development and Mobility, Free Hanseatic City of Bremen

A brief history…

• 1945: Ports of Bremen and Bremerhaven in American zone of occupation

• During the Cold War, Bremerhaven served as key supply harbor for the U.S. Armystationed in Western Europe.

• With growing competition from other Asian and Eastern European ports, theregion experienced a severe economic downturn.

– Structural change in the fisheries industry, – Loss of purchasing power due to withdrawal of American troops– downclosure of shipyards leading to a sharp rise in unemployment and a

dramatic population decrease (from 147,000 to 113,000).

• In 1998: unemployment at 22.3% (i.e. highest peak in West Germany).

Südlicher Fischereihafen, Labradorhafen 1999

Development of Industrial Real Estate

18

Development of Industrial Real Estate

Südlicher Fischereihafen, Industriegebiet Luneort 2012

Fraunhofer Institut

PowerBlades GmbH

REpower Systems AG

AREVA Wind GmbH

WeserWind GmbH

Offshore-wind industry in the south of Bremerhaven in 2012

Heavy Load Terminal Labradorhafen

Offshore Transition Kaiserhafen – ABC-Halbinsel

22

Offshore Terminal: Technical Data

• PURPOSE– Handling, pre-assembly, and storage of offshore wind turbines, exporting of components – Logistics center for the transportation/shipment of large industrial components

• OPERATING TIME– 24 hours a day, 365 days a year

• QUAY LENGTH– 500 m

• BERTHS– 2 to 3

• NAVIGABLE DEPTH– 14,10 m NN (-11,50m LAT)

• HEAVY-DUTY SLAB AT THE QUAY– 70 m wide, 500 m long

• TERMINAL DEPTH– 498 m

• AREA– Approx. 25 ha

• CAPACITY– 160 units per season

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Thank you for your interest!

Growth of market volume in the green markets of the future (in billion EUR)

Energy imports and domestic

production in Germany

Renewables reduce Germany’s energy dependence.

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0

10

20

30

40

50

60

70

80

90

100

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

renewables

lignite

hard coal

gas

oil

oil imports

gas imports

hard coal imports

nuclear

total imports

% of primary energy

consumption

domestic production

import dependence

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Net feed-in payment trends in Germany

The main share of payments for renewable electricity goes to existing

plants. New installations account for a much smaller share.

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2010 2011 2012 2013 2014 2015 2016 2017

bill. €

liquidity reserve + accountbalancesolar

offshore wind

onshore wind

biomass*

solar (old)

offshore wind (old)

onshore wind (old)

biomass (old)

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Feed-in tariff

Quota obligation

Feed-in premium

Support scheme

currently suspended

Policy

uncertainty

Mixed models

Norway

Sweden

FranceAustria

Bulgaria

Romania

Hungary

Croatia

Finland

Estonia

Lithuania

PolandUK

Italy

Malta

Ireland

Greece

Cyprus

Denmark

ItalySpainPortugal

Latvia

Slovakia

Belgium

Slovenia

Renewable electricity support

mechanisms in Europe

Tendering

* support scheme was cut significantly

** Germany will starttendering ground-mounted PV in 2015

Netherlands

Czech Republic*

Germany**

Free Hanseatic City of Bremen

• One of 16 Federal States of Germany

• Area: 158 sq. mi (408 km²)

• Population: 661,301

• Main industries:

– Maritime and trade economies

– Automotive industry (Daimler AG)

– Aerospace

– Food and beverage industry

– Logistics

• Consists of two cities: Bremen & Bremerhaven

Bremen