Renewable Energy Development in Germany (Status and Outlook)

Rainer Hinrichs-Rahlwes, Board MemberBEE - German Renewable Energy Federation

Berlin, 3rd of December 2012

BEE - the German Renewable Energy Federation is the umbrella organization of renewable energy in Germany, with 25 member associations and organizations representing 30,000 members, including 5,000 enterprises. Our target: 100 % of renewable energy.

3

• Provide significant contribution to Security of Energy Supply Wide range of RE technologies are proven and mature A mix of different technologies and resources is available

• Renewables reduce Dependency on Energy Imports RES are domestic energy sources

• Renewables mitigate the risks of Price Volatility of Fossil Fuels Wind, solar and geothermal energy are free RE-technologies have high cost decreases

• Renewables are reliable technologies against Climate Change RES are (nearly) carbon free or carbon neutral

Renewable Energies – mature and beneficial

4

Total Greenhouse gas emissions avoided via the use of renewable energy sources in Germany 2011

15.5 34.2

35.4

24.7 12.9

0.5

1.3

4.8

0 10 20 30 40 50 60 70 80 90 100

Biofuels

Heat

Electricity

GHG avoidance [million t CO2 equiv.]

Hydropower Wind energy Biomass Photovoltaics Geothermal energy Solar thermal energy Biofuels

87.3 million t

4.8 million t

37.2 million t

GHG: Greenhouse gas; deviations in the totals are due to rounding; geothermal energy not presented due to negligible quantities of electricity produced;source: Federal Environment Agency (UBA) according to Working Group on Renewable Energy-Statistics (AGEE-Stat); image: H.G. Oed; as at: March 2012; all figures provisional

Total GHG emissions avoided 2011 (electricity/heat/transport):

approx. 129 million t CO2 equiv.,incl. GHG emissions avoided due to electricity paid for under the EEG: approx. 70 million t CO2 equiv.

GHG-Reduction from Renewables in Germany (2011)

5

Jobs in the renewable energy sources sector in Germany

3,400

9,500

56,800

63,900

4,500

8,100

119,500

85,700

6,500

14,500

7,800

102,100

7,500

13,300

7,600

120,900

122,000

96,100

1,800

25,100

10,300

49,20080,600

128,000

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000

Geothermal energy

Hydropower

Solar energy

Biomass

Wind energy

Increase: approx. 129 %

Figures for 2009 and 2010 are provisional estimate; deviations in totals are due to rounding;Source: O’Sullivan/Edler/van Mark/Nieder/Lehr: "Bruttobeschäftigung durch erneuerbare Energien im Jahr 20010 – eine erste Abschätzung", as at: March 2011; interim report of research project „Kurz-

und langfristige Auswirkungen des Ausbaus erneuerbarer Energien auf den deutschen Arbeitsmarkt“; image: BMU / Christoph Busse / transit

Publicly funded research /

administration 2004 2007 2009 2010

160,500 jobs

277,300jobs

367,400 jobs

339,500jobs

Further increasing, problems for PV manufacturers

Industry: > 500,000 jobs in 2020

6

Investments in the construction of renewable energy facilities in Germany since 2004

8.8

10.6

12.9

16.7

20.1

27.8

22.9

14.0

20.1

25.0

16.5

12.8

6.88.4

10.89.2

0

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009 2010 2011

Inve

stm

ents

[Bill

. Eur

o]

Investments in RES

Investments in the electricity sector (RES)

Source: BMU-KI III 1 according to the Centre for Solar Energy and Hydrogen Research Baden-Wuerttemberg (ZSW); 2004 and 2005 estimated; image: BMU / Dieter Böhme; as at: March 2012; all figures provisional

2011: 36 billion Euro Turnover from RES

RES investment predominantly for electricity

plus 13.1 for O&M

7

• Energy prices do not tell the truth New technologies were always heavily subsidised Globally, fossil & nuclear receive 6 times the subsidies of RE Grid costs are not properly attributed to fossil & nuclear energy

• Most externalities are not included in energy prices Impact of fossil on environment, health, society not included Nuclear risks (incl. Waste!) are largely borne by public money No realistic price of carbon (despite ETS)

• There are various competitive disadvantages for Renewables Still: Costs for Renewables are decreasing rapidly Wind is already competitive (even in disturbed markets) Solar PV is reaching grid parityAND: Costs for fossil & nuclear are increasing

Are Renewables expensive?

Avoided Fossil Fuel Imports due to Renewable Energy

billion Euro

Forecastelectricity

heating

transport

Source:

9

pricemarginal generation cost

Electricity produced

RE substitute most expensive power plant

RE

low

er e

lect

ricity

pric

esPublic benefit: Merit order effect

10

High (upfront) capital costs but close to zero operating costs (Wind, PV ...) Distributed production and consumption: different grid structure

Flexible system needed: smart grids, system services, storage ....For development and deployment of a broad range of renewable

Need to bridge the gap between today’s and tomorrow’s energy• remove remaining economic and administrative barriers,• compensate for structural and competitive disadvantages• accelerate market penetration and up-scaling of various RE,• foster technology development and increased deployment, • trigger economies of scale and resulting cost reduction.

Different cost structure of REand the need for support

Increase of EEG surcharge

Development of EEG surcharge and of increasing factors 2012 - 2013

Real support costs

Costs of market premium Compensation for last year

Industry privilege

Liquidity reserve

Reduction stock market price

Real costs of EEG are lower

Compensation 2012 40%

Real support costs 11%

Reduction stock market price 21%

Industry privilege 16%

Market premium 5%

Liquidity reserve 7%

Percentages of Increase from 2012 to 2013

Distribution of pure EEG costs among the different technologies

The German Government’s Energy Concept 2010: Targets

• Greenhouse Gas Reduction: minus 40% by 2020, 55% by 2030, 70% by 2040, 80-95% by 2050 (compared to 1990 levels)

• Share of Renewable Energy in Gross Final Energy Consumption: 18% by 2020, 30% by 2030, 45% by 2040, 60% by 2050

• Share of Renewables in Electricity Consumption: 35% by 2020, 50% by 2030, 65% by 2040, 80% by 2050

After Fukushima – complete Phase-out of Nuclear Energy by 2022

Renewables Support: The German Policy MixElectricity Main tool: Renewable Energy Law – EEG – (since 2000 [1991]):

- Priority grid access and dispatch for RE- Fixed feed-in tariffs, guaranteed for 20 years- Differentiation according to technology, size and [only wind] site- Annual degression and regular revision

Heating Market Incentive Programme – MAP -- Investment support- cheap loans for larger installations For new buildings: Renewable Heating Law (since 2009)

Transport - Tax exemption for biodiesel (since 1992) and all biofuels (2004)- Since August 2006: increasing taxation on biofuels Main instrument since 2007: quota obligation, including E10

The Renewable Energy Act – EEG –• Priority grid access for Renewables

installations• Each kWh must be purchased and

remunerated by the utility / grid operator (with defined exceptions)

• Fixed feed-in tariff paid for 20 years• Annual (monthly for PV) degression for

new installations (a fixed percentage or a defined mechanism)

• Differentiated support according to technology, size and site quality

• Costs are passed on to all electricity consumers (specific exceptions for energy intensive industry)

• Regular evaluation and amendments

- EEG -

Utility / TSO

Electricity consumer

RES-E Producer

+ FIT surcharge

Electricity rates

renewableelectricity

Feed-in tariff

Provides for grid access, sets FIT

conventionalelectricity

Regulation / Law

Money

Power

Renewable Energy installations owned by citizens

Renewables in Germany (2011)

Renewable energy sources as a share of energy supply in Germany

3.24.5

0.9

4.3

7.8

10.912.2

5.6

10.4

20.018.0 1)

10.0 1,2)

14.0 1)

minimum 35.0 1)

0

5

10

15

20

25

30

35

40

Share of RES in total grosselectricity consumption

Share of RES in totalenergy consumption for

heat

Share of RES in fuelconsumption for road traffic

in transport sector (2)

Share of RES in total finalenergy consumption

(electricity, heat, fuels)

Share of RES in totalprimary energyconsumption (3)

Shar

e in

[%]

2002 2004 2006 2007 2008

2009 2010 2011 2020

1) Sources: Targets of the German Government, Renewable Energy Sources Act (EEG); Renewable Energy Sources Heat Act (EEWärmeG), EU-Directive 2009/28/EC;2) total consumption of engine fuels, excluding fuel in air traffic; 3) calculated using efficiency method; source: Working Group on Energy Balances e.V. (AGEB); RES: Renewable Energy Sources;

source: BMU-KI III 1 according to Working Group on Renewable Energy-Statistics (AGEE-Stat); image: BMU / Brigitte Hiss; as at: March 2012; all figures provisional

Targets:

Gross final energy

consumption

Transport sector

19

Development of renewables-based fuel supply in Germany since 1991

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

[GW

h]

Bioethanol

Vegetable oil

Biodiesel

Vegetable oil as a part of biogenic fuels used since 1992, Bioethanol since 2004; 1 GWh = 1 Mill. kWh;source: BMU-KI III 1 according to Working Group on Renewable Energy-Statistics (AGEE-Stat); image: BMU / Dieter Böhme; as at: March 2012; all figures provisional

RE for Transport in Germany

Significant growth 2004 – 2007 / stagnation since then

New and focused policies needed

20

Contribution of renewable energy sources to heat supply in Germany since 1997

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

[GW

h]

Biomass * Solar thermal energy Geothermal energy

* Solid and liquid biomass, biogas, sewage and landfill gas, biogenic share of waste; 1 GWh = 1 Mill. kWh; RES: Renewable Energy Sources;source: BMU-KI III 1 according to Working Group on Renewable Energy-Statistics (AGEE-Stat); image: BMU / Brigitte Hiss; as at: March 2012; all figures provisional

Biomass share of RES - heat: 91 %

RE Heating & Cooling in Germany

2011: 10.4% RES

Stable Framework missing Future growth uncertain

21

Development of collector area and energy supply of solar thermal installations for heat supply in Germany

355

440

549

690

848

1,02

6

1,26

1

1,58

7

1,88

4

2,14

4

2,44

3

2,77

8

3,21

8

3,63

8

4,13

4

4,73

3

5,20

0

5,60

0

280

221

169

107

0

1,000

2,000

3,000

4,000

5,000

6,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

[1,000 m2]

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

[GW

h]

Energy supply [GWh]

Area, cumulative [m²]

1 GWh = 1 Mill. kWh; source: BMU-KI III 1 according to Working Group on Renewable Energy-Statistics (AGEE-Stat) and ZSW; image: ZSW / Ulrike Zimmer; as at: March 2012; all figures provisional

Solar Thermal Heating in Germany

22

Development of (near-surface) geothermal energy use * for heat supply in Germany since 1995

2,60

2

3,25

5

3,96

2

4,64

0

5,30

0

5,98

0

1,44

0

1,44

0

1,45

8

1,49

1

1,53

2

1,58

1

1,65

1

1,74

1

1,84

2

1,97

2

2,15

6

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

[GW

h]

* Including Air/Water-, Water/Water- and Brine/Water- Heat Pumps; 1 GWh = 1 Mill. kWh;source: BMU-KI III 1 according to Working Group on Renewable Energy-Statistics (AGEE-Stat) and ZSW; image: ZSW / Ulrike Zimmer; as at: March 2012; all figures provisional

Geothermal Heat in Germany

23

Development of electricity generation from renewable energy sources in Germany since 1990

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

[GW

h]

Hydropower Wind energy

Biomass * Photovoltaics

* Solid and liquid biomass, biogas, sewage and landfill gas, biogenic share of waste; electricity from geothermal energy not presented due to negligible quantities produced; 1 GWh = 1 Mill. kWh;StromEinspG: Act on the Sale of Electricity to the Grid; BauGB: Construction Code; EEG: Renewable Energy Sources Act;

source: BMU-KI III 1 according to Working Group on Renewable Energy-Statistics (AGEE-Stat); image: BMU / Christoph Edelhoff; as at: March 2012; all figures provisional

StromEinspG:January 1991 - March 2000

Amendment to BauGB:November 1997

EEG:April 2000

EEG:January 2009

EEG:August 2004

RE Electricity in Germany

2011: 20%

2012 >25%

Strong growth due to Feed-in tariffs

24

Development of electricity production and installed capacity of wind energy plants in Germany

46,5

00

4,48

9

37,7

93

38,6

39

40,5

74

39,7

13

30,7

10

27,2

29

25,5

09

18,7

13

15,7

86

10,5

09

7,55

0

5,52

82,96

6

2,03

2

1,50

0

909

600

275

100

71

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

[GW

h]

0

5,000

10,000

15,000

20,000

25,000

30,000

[MW

]

Electricity generation [GWh]

installed capacity [MW]

StromEinspG: Act on the Sale of Electricity to the Grid; BauGB: Construction Code; EEG: Renewable Energy Sources Act; 1 TWh = 1 Bill. kWh; 1 MW = 1 Mill. Watt; sources: electricity supply 2011 according to 50Hertz Transmission, Amprion, TenneT TSO, EnBW Transportnetze; J.P. Molly: "Wind Energy Use in Germany - Status 31.12.2011"; Deutsches Windenergie-Institut (DEWI) and German

Wind Energy Association (BWE); BMU-KI III 1 according to Working Group on Renewable Energy-Statistics (AGEE-Stat); as at: March 2012; image: BMU / Christoph Edelhoff; all figures provisional

StromEinspG:January 1991 - March 2000

Amendment to BauGB:November 1997

EEG:April 2000

EEG:January 2009

EEG:August 2004

29,075 MW

Electricity from Wind in Germany

25

Development of the number and installed capacity of wind energy plants in Germany

6,18

5

22,2

97

405

700

1,08

4

1,67

5

2,46

7

3,52

8

4,32

6

5,17

8

7,86

4

9,35

1

11,4

15

13,7

39

15,3

71

16,5

18

17,4

74

18,5

78

19,3

44

20,1

47

20,9

65

21,5

72

0

5,000

10,000

15,000

20,000

25,000

30,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Num

ber o

f pla

nts

[-]

0

5,000

10,000

15,000

20,000

25,000

30,000

[MW

]

Installations, cumulative number of plants [-]

cumulative installed capacity [MW]

StromEinspG:January 1991 - March 2000

Amendment to BauGB:November 1997

EEG:April 2000

EEG:January 2009

EEG:August 2004

29,075 MW

Sources: J.P. Molly: "Wind energy use in Germany, as at 31.12.2011"; Deutsches Windenergie-Institut (DEWI) and German Wind Energy Association (BWE); 1 TWh = 1 Bill. kWh; 1 MW = 1 Mill. Watt; StromEinspG: Act on the Sale of Electricity to the Grid; BauGB: Construction Code; EEG: Renewable Energy Sources Act; image: BMU / Brigitte Hiss; all figures provisional

Installed Windpower in Germany

26

Installed capacity and energy supply from photovoltaic installations in Germany

19,0

00

11,6

83

6,58

3

4,42

0

3,07

5

2,22

0

1,28

2

556

313

162

7664423226161186321

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

[MW

p ]

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

[GW

h]

Electricity supply [GWh]

installed capacity [MWp]

Source: BMU-KI III 1 according to Working Group on Renewable Energy-Statistics (AGEE-Stat); 1 GWh = 1 Mill. kWh; 1 MW = 1 Mill. Watt; image: BMU / Bernd Müller; as at: March 2012; all figures provisional

24,820 MWp

PV Capacity and Yield in Germany

2012 – more than 30,000 MWp

27

Development of biomass * use for electricity supply in Germany

4,73

7

8,24

7

10,0

77

14,0

25

18,6

85

24,2

81

27,5

31

30,3

41

36,9

203,58

9

1,55

8

1,87

5

2,10

2

5,20

7

6,03

8

33,8

663,26

0

2,27

7

2,01

3

1,63

6

1,47

1

1,43

4

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

[GW

h]

* Solid and liquid biomass, biogas, sewage and landfill gas; 1 GWh = 1 Mill. kWh;source: BMU-KI III 1 according to Working Group on Renewable Energy-Statistics (AGEE-Stat); image: BMU / Brigitte Hiss; as at: March 2012; all figures provisional

Biomass for Electricity in Germany

Paradigm-Shift:From traditional baseload power ….

Simulation 2007: 15 % RE (hourly resolution)

… towards a smart Mix with very high shares of Renewable Energy

Peaks at noon

Strong and weak wind periods

Storage, Import/Export

Variable Load

System-Transformation: technically & economically

BEE-Scenario 2020: 47 % RE (hourly resolution)

Thank you for your attention!

BEE - German Renewable Energy FederationReinhardtstraße 1810117 BerlinFon +49 30 275 81 70 0Fax +49 30 275 81 70 20rainer.hinrichs@bee-ev.dewww.bee-ev.de