Download The German „Energiewende“ – Climate Change, Energy Efficiency

The German „Energiewende“ – Climate
Change, Energy Efficiency and more
by
Franzjosef Schafhausen
Federal Ministry for the Environment, Nature Conservation,
Building an Nuclear Safety, Berlin
On the occasion of the
19th REFORM Group Meeting, Salzburg
Low Carbon Markets and the Legacy of
Nuclear Power
Salzburg
1. – 5. September 2014
1
The Background
2
Facts and History
•
1950/60’s: Coal and steel economy
•
Resource-poor  dependence on raw material imports
•
Economic backbone: Engineering and Trade
•
Strong dependence on exports and international ties
•
Geographical location in the centre of Europe
3
„Energiewende“ started in the 70’s
•
1979 Enquête Commission Future of Nuclear Energy
 phase out technically & economically feasible
•
1987 – 1994 Enquête Commissions “Protection of the
Earth’s Atmosphere”
 Crucial question of Energy Transition
4
Primary Energy Consumption and Import
Others
Renewables
Imports
Nuclear
Domestic
Oil
Brown coal
Primary energy
Gas
Hard coal
Oil
Gas
Hard coal
Brown coal
Nuclear
Renewables
5
Renewable Energy Capacity
Power production in Germany by source 1990 – 2013 (percent)
Hydro
Waste
Bio mass
Wind
PV
Natural gas
Nuclear
Hard coal
Brown coual
Mineral oil
Others
6
The Rationale behind the „Energiewende“
7
Rationale of the German “Energiewende”
•
•
•
Broad consensus: phase out of nuclear until 2022 and base energy
system on renewable sources of energy and energy efficiency
sustainable climate protection as key driver
economic calculation as another driver
–future competitiveness will be decided by costs of energy per GDP
–future independent energy generation at very low costs
–multiplying innovation: a complete new energy system
•
–short term investments – long term benefits
comprehensive and long term strategy which ensures reliability,
affordability and security of supply
–Not “plugging out Nuclear and coal” and “plugging in Renewables” over
night but complex overall system change
–energy sector is capital intensive, long term planning periods
8
Overview on state of implementation of
GHG/RE/EE targets
2013
GHG Emissions
GHG Emissions
(cp. 1990)
2020
2020
-23.8%
2050
-40%
2030
at least
-55%
2040 2050
at least
at
least -80% to 95%
-70%
at least
50%
at
least
65%
at least
80%
30%
45%
60%
at least
Renewable Energy
RES share in gross electricity
consumption
25.4%
at least
35%
RES share in final energy
consumption
12.4%
(2012)
18%
Energy efficiency
Primary energy consumption
(cp. 2008)
-3.3%
-20%
-50%
9
GHG emission reduction
 Target: reducing GHG emissions by 40 % until 2020 (cp. to 1990) and by 8095% until 2050
in m t CO2 equivalents
 2013: 23.8 % (cp. to 1990, slight increase cp. to 2012)
Total non-CO2
Target 2008-2012
Target 2020
10
RES surpassed nuclear and became second
largest electricity generator (25,4%)
40
Target: at least 35% RES-E generation
in gross final electricity consumption
by 2020
35
30
35,0
20
25,4
23,6
20,4
17,0
15,1
14,2
11,6
10,2
9,3
7,6
7,7
6,2
5,2
4,5
4,1
4,8
4,7
4,3
3,8
3,6
0
3,1
5
6,6
10
16,3
15
3,4
%
25
11
Learning curve for RES technology
development has been largely paid
• Renewable energy surcharge amounts to 6.24 ct/kWh or € 24 bn. p.a.
• Main cost driver: financing PV learning curve at former high costs
(total installed PV capacity: 35 GW)
7,0
EEG-surcharge
6,24
Liquidity reserve and balanced
account of EEG
6,0
5,28
of any other income and
expense
[€cent per kWh]
5,0
Photovoltaics
4,0
3,53
Wind energy off-shore
3,59
Wind energy on-shore
3,0
Biomass
2,0
2,05
Hydro energy
1,32
Avoided grid use charge
0,78
1,0
0,25
0,36
0,37
2002
2003
0,54
1,01
1,12
0,65
0,0
2001
2004
2005
2006
2007
2008
2009
2010*
2011*
2012*
2013*
2014*
12
Investments of the past pay off: future
Renewables much cheaper – economies of
scale / learning curve
2010
2014
2020
PV (ct./kWh)
24-35
9.5-13.5
~7-10
Wind (ct./kWh)
6-10
5.5 -9
~ 4.5-8
13
Future investments in Renewables cheaper
than fossil fuel costs
 It has become cheaper to invest in RES than to use fossil fuels
 if framework is right (targets/ investment security)
 Fossil fuel costs are “sunk costs”
14
Improving energy security and fostering
economic growth and jobs
• In Germany RES and efficiency together save 36 bn € fossil fuel
costs p.a. (2012) and led to new 800,000 jobs
• EU-KOM Impact Assessment for 2030 framework showed: 30% REStarget and ambitious efficiency lead to:
– 260 bn € more savings of fossil fuels
– and 500,000 more jobs
compared to only 27% RES target and less ambitious efficiency
15
One of the key drivers: the German
Renewable Energies (Renewable Source Act
(EEG)
Next steps now towards
more market integration and cost control
Other key drivers:
Energy efficiency, Energy security, Reduction
of energy imports, creating jobs an
economic growth, innovative technology
16
Reform of the EEG – Key elements
• Cost and quantity control
– quantity control binding Renewable Energies deployment
corridors
– mechanism
• Cost-efficiency
– focussing on wind and solar: most efficient technologies
– wind tariffs reduced up to 20%
• Increased market integration
• Exemptions for industry adjusted
→ Compatibility with the EU-framework
17
Deployment corridors for RES control costs
and quantity
• Concrete Renewable Energies corridors in the electricity sector
agreed:
– In 2025: between 40% and 45% RES share in electricity
– In 2035: between 55% and 60% RES share in electricity
• Consequence:
– Onshore wind capacity: 2.5 GW per year
– Solar energy: 2.5 GW per year
– Offshore wind capacity: 6.5 GW by 2020 and 15 GW by 2030
→ optimal integration and predictability for investors and the
electricity market
18
Measures for quantity and cost control
• Step I: “flexible cap” for all technologies
– Automatic tariff reduction if newly installed capacity is above
corridor
– Very good experience in the PV sector: tariffs have been reduced
by ~70% over the last 5 years: today between 9 – 13 ct/kW
(depending on the size of installation)
– “flexible cap” is now extended to wind
• Step II: tender scheme as of 2017
– Starting with pilot projects of 400 MW PV (ground mounted) p.a.
– introduction of tender schemes as of 2017 based on experience
made
19
Cost efficiency
• Focussing on the most cost efficient technologies: Wind and PV
• Onshore wind:
– support levels reduced between 10-20% at very good sites
– bonuses abolished or phased out
• Offshore wind:
– “acceleration model” extended until 2019,
– Support reduced by 1 ct/kWh in 2018
• PV tariffs already cut by 70% in the last 5 years
20
Market integration: mandatory market
premium
• Market responsiveness is most important for the internal market
• Market premium ensures market responsiveness; RES operators act
in the same way as operators of conventional power plants
• So far market premium was optional
– 80% of wind and ~ 40% of overall installations used optional
premium
– sufficient experience gained
• market premium becomes mandatory
• Sliding premium ensures balanced risks for Renewable energies
operators
21
Balanced exemptions for industry needed
• Affordability of transition costs important particularly for
energy intensive industry facing international competition
• Balanced exemptions needed which
– reflect support costs and
– avoid distortion of competition
• Intensive discussions also in the context of state aid
→ Compatibility with the EU-framework
22
Exemptions for industry: key elements
• Conditions
– Undertaking is operating in one of the sectors of the State Aid
guideline sector list (reflecting minimum trade intensity and
electricity cost intensity)
– Share of electricity costs per unit gross added value is at least
16% (for some undertakings: 20%) → increased from 14% (EEG
2012) in the light of increased EEG-levy
• Consequence
– General principle: undertakings pay 15% of the EEG-levy but
max. 4% (“cap”) or 0,5% for most energy intensive industries
(“super-cap”)
– Every undertaking pays the full EEG-levy for the 1st GWh
– And at least 0.1 ct/kWh for every kWh beyond
→ ensuring minimum contribution of industry and competetivenes
23
Energiewende: challenges ahead
Integrating “Energiewende”
in the internal market
• EU-wide Market
integration is most efficient
• Foster EU-wide grid
reinforcement and market
coupling
• Supportive EU-framework
needed!
Renewable energies
• Cost and quantity control
• Coordination with neighbours
“Unlock” Energy efficiency potential
• EE is still lacking behind despite costefficiency
• Concrete Energy Efficiency Action
Plan agreed
New flexible system needed;
energy security is a EU
question
• Making use of the flexibility
and balancing options of the
internal market is most
efficient
• Assessment and solution in
the European context needed
• More regional cooperation
24
Grids and market coupling are key for
 Challenge within Germany:
market integration
transport from North to South

Loop flows: temporary affecting
neighbours

Key: High Voltage DCtransmission lines (and more AC
lines)

Germany introduced
comprehensive new planning
system for grids

European market integration most
cost efficient
•
Interconnectors (!)
•
Market coupling
•
Liberalisation
25
Case for Energy Efficiency
• Future competitiveness will be decided by primary energy/BIP: by
2050 Germany wants to need only half (50%) of todays primary
energy for one unit BIP
 Ambitious climate and RES targets can only be achieved costefficiently in combination with energy efficiency
 EU KOM impact assessment for 2030 showed: ambitious energy
efficiency can reduce costs for fossil fuel imports by 8 to 34 bn €
p.a.
26
Germany decoupled growth from energy
consumption
Decoupling of economic growth and energy consumption achieved:
 energy productivity increased by 46% since 1990
 primary energy consumption reduced by 3.3 (cp. to 2008) while
economy has grown by 50% (since 1990)
27
Energy Efficiency – first progress but
additional measures needed
• Concrete measures adopted, e.g.
– Standards for new buildings: Energy Saving Ordinance “EnEV”
– low interest rates and grants for energy efficient new buildings
above standard (Program KfW 40, 55, 70)
– Subsidies (1.5 bn €/a 2012 - 2014) for refurbishing buildings
(better insulation, more efficient heating)
– Energy “passport” for buildings provides information
 But efficiency is lacking behind Renewable energies
deployment, more measures needed
• Coalition agreement: developing a concrete Efficiency Action Plan
agreed
28
Security of supply is not only a national but
European task
Luxemburg
Nuclear

Currently: sufficient generation capacity
in Germany despite shut down of 8.6 GW
nuclear (~ 102 GW firm capacity cover 82
GW peak load)

Local bootlenecks in Bavaria due to
insufficient grid connection (temporary
measures adopted)

Discussion on future market design in
the EU-context needed

Using all flexibility options of the
internal market is most efficient
•
generation and demand management
•
Grid reinforcment and market
coupling
•
Regional cooperation
Austria
Fossile (incl. Pump storage)
Renewable energy
Total capacity installed GW
29
Need for a
supportive European framework
30
EU Perspective – Climate and Energy 2030
• Action Programme Climate Change 2020 and “Energiewende”
needs to be integrated in the EU-internal market
– Target setting – GHG-reduction, renewables and energy
efficiency – Germany: at least 40 % GHG-reduction; at least 30 –
35 % Renewables and at least 30 % energy efficiency
– Market integration
– more coordination
– increased regional cooperation
• Action Programme Climate Change 2020 and “Energiewende” also
needs a supportive European framework
– Clear and reliable framework → strengthened ETS, targets and
reliable governance
– continuous alignment of climate and energy policies
– Need for flexibility to adapt climate policy and energy transition
to national circumstances
31
Next steps 2030 framework: setting
investment signals
• urgent ETS reform, also taking care of competitiveness
• ambitious 2030 GHG-target of at least 40% (EU domestic)
• also binding targets for RES (at least 30%) and for Energy Efficiency
– RE+EE more cost-efficient than new nuclear or CCS
– “no-regrets”: all decarbonisation-scenarios need significant RES
and EE (EU Roadmap 2050)
– Targets allow for predictability, control and a coordinating EU
framework
– a balanced and diversified RES deployment all over Europe
ensures most-efficient system costs (less intermittency, less
grids and balancing needed)
• more flexibility cp. to 2020 imaginable but also reliability and
balanced approach needed → avoid “full-stops” in some countries
32
The EU Climate and Energy Package 2030
• Negotiations will go on mid September 2014 (Sherpa mode)
• Decision will be taken by the end of October 2014 ( European
Council – Heads of States)
• Numerous activities and initiatives are taking place (bilateral,
multilateral, EU-wide)
• Peru (2014) and Paris (2015) are targeted
33
The new Climate Change Policy
34
Emission trends in Germany
1.232
1.249
1.200
131
übrige Emissionen
1.118
© UBA 07.01.2014
1.137
1.101
1.076
Haushalte
Angaben in Mio. t CO2-Äquivalenten
1.000
160
130 144
139
133
1.042 1.041 1.056 1.034 1.033
1.020
121 119 132 122 123 114
Verkehr
81
800
174 173
Gewerbe, Handel,
Dienstleistungen
276
60
70
236 226
Landwirtschaft
1.003
977
947
112 114
89
913
61
177
59
100
182 178 174 172 166 166
55
51
57
55
47
45
157 153 150 150
44
50
39
150
84
86
42
229 211
189 186 188 191 185 191 201 199
200 199
84
83
84
83
83
80
78
79
940
91
94
151 153 151
46
174
Energiewirtschaft
929
951
108
99
400
Schätzung UBA
980
107
174
Industrie
600
995
44
40
-40%
gegenüber
1990
42
187 189 185
749
78
76
75
78
76
75
77
76
Kyoto-Budget
200
458
TreibhausgasemissionenSumme
394 401 380 380 370 383 393 394 408 403 396 397 403 382
356 368 366 377
0
35
Projections – Impacts of the
present P&M‘s
(modified by L. Emele, Öko-Institut)
Other emissions
Households
versus
versus
Business, trade,
services
Industry
Agriculture
Energy sector
Minus -40% Target: 749
in m t CO2 equivalents
Transport
Total
greenhouse
gas
* „PB 2013 – MMS“ shows a projection based on existing measures (minus
33% versus 1990 to 2020) by sectors
36
A two step approach
Based on the Coalition Contract (December 2013):
• The „Action Programm Climate Change 2020“ to comply
with the 40 % target
• The „Climate Change Plan 2050“ to construct a road to 80 –
95 % GHG reduction by 2050
37
Conclusion
• Climate Change is the overarching issue – the present development
is far away from what is needed
• Focussing on Wind, PV and Energy Efficiency is the most costefficient decarbonisation approach
• Learning curves have largely been paid
• Most return on investment: innovation, jobs, energy security
• Cost and quantity control measures ensure optimal integration
• Energy security needs to be solved in the EU context
• More coordination and cooperation needed
• supportive EU-2030-framework with strengthened ETS, 2030-targets
for GHG, RES and efficiency as the basis for reliability, flexibility,
38
coordination and a balanced approach
Thank you.
39
backup
40
Investments start paying off: PV costs came
down
 PV costs came down from ca. 0.48 ct/kWh some years ago to between
0.9 and 0.13 €/kWh for PV today
 PV was the main cost driver; future deployment will be significantly
less costly
Dünnschicht
Source: PVexchange
Germany
China
Japan
41
Total capacity of PV has achieved 36 GW
today
Photovoltaic expansion in Germany (1 / 2)
8.000
7.485 7.604
6.988
7.000
6.000
MWp
5.000
4.446
4.000
3.000
1.950
2.000
1.000
0
Source: BMU (2013)
44
110 110 139
951 843
670
1.271
42
Wholesale power market price will further
decline
• Renewable energies are one driver of decreasing power market
prices since they have no fossil fuel costs (marginal costs = 0)
• Future price before nuclear phase out decision: 53 €/MWh (Base)
and 65 €/MWh (Peak)
• Future price today: c. 36 €/MWh (Base) and ca. 47 €/MWh (Peak)
90
80
Phelix Base Future (EEX)
70
60
€/MWh
50
40
30
20
10
0
43
Paradoxon of the Merit order effect
• Part of the support costs
is driven by the lower
wholesale power market
price that RES cause
(overall support costs =
support payments market price for RES-E)
• Calculation for 2012: MOE
= 0.9 ct. kWh
• MEO becomes more and
more important for
support costs
10
9
8
7
6
5
4
3
2
1
0
2010
2011
whole sale
Börsenpreis
price
2012
2013
EEG-Umlage
EEG Renewable Energy Surcharge
44
Investing in the future
Mld US$
Worldwide Subsidies for Fossil Fuels and Renewables (in Billion US$)
600
Fossil Fuels
500
Renewables
400
300
200
100
0
2007
2008
2009
2010
Source:
IRENA, IEA
45