Renewable Energy Policy in Germany
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Renewable Energy Policy in Germany

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:Germany is concerned about climate change. Germany has always taken a proactive stance on international climate change agreements: Bonn 1995 Commitments of the government Hosting the UNFCCC ...

:Germany is concerned about climate change. Germany has always taken a proactive stance on international climate change agreements: Bonn 1995 Commitments of the government Hosting the UNFCCC Secretariat National and EU policies Current commitment: EU: 20 % emissions reductions by 2020; 20 % renewables, 20 % energy efficiency. In case of new climate agreement: 30 % reduction.

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Renewable Energy Policy in Germany Renewable Energy Policy in Germany Presentation Transcript

  • Renewable Energy Policy in Germany: A FIT Success Story Dr. Christine Wörlen May 2009
  • Overview • German Climate Change Policy • The German Feed-in-Tariff (FIT) scheme to facilitate investment in renewables • Benefits: CO2 emission reduction, jobs, income
  • Emission Reduction Policy in Germany
  • Germany is concerned about climate change. Germany has always taken a proactive stance on international climate change agreements: Bonn 1995 Commitments of the government Hosting the UNFCCC Secretariat National and EU policies Current commitment: EU: 20 % emissions reductions by 2020; 20 % renewables, 20 % energy efficiency. In case of new climate agreement: 30 % reduction.
  • German Integrated Energy and Climate Package. Meseberg 2007: 29 measures Emissions Trading and Clean Development Mechanism Support for climate-friendly energy production (renewables, CHP) Energy efficiency measures for residential households Implemented to the largest part over 2008 and 2009
  • 29-Point Integrated Energy and Climate Programme of the German Federal Government 2007. 1 Amendment to the Combined Heat and Power Act 16 CO2 strategy for passenger cars 2 Amendment to the Energy Sector Act (EnWG) on 17 Biofuels development liberalising metering 18 Reform of the vehicle tax to a pollutant and CO2 basis 3 Low-carbon power plant technologies 19 Energy labeling for passenger cars 4 Smart monitoring of power consumption 29 Amendment to the Heavy Goods Vehicle (HGV) Toll 5 Clean energy technologies Ordinance 6 Adoption of a modern energy management system 21 Air traffic 7 Promotional program for climate protection and 22 Water transportation energy efficiency (outside of buildings) 23 Reduced emissions of fluorinated greenhouse gases 8 Energy-efficient products 24 Procurement of energy-efficient products and 9 Feed-in law for biogas in the natural gas grid services 10 Energy Saving Ordinance 25 Energy research and innovation 11 Heating costs for rental housing 26 Expansion of electric transport 12 Low-carbon building retrofitting program 27 International projects for climate protection and energy efficiency 13 Energy-efficient modernization of buildings and social infrastructure 28 Energy and climate policy information programs for German embassies and consulates 14 Renewable Energies Heat Act (EEWärmeG) 29 Transatlantic climate and technology initiatives 15 Efficiency retrofitting program for federal buildings EFFIZIENZ ENTSCHEIDET
  • 29-Point Integrated Energy and Climate Programme of the German Federal Government 2007. 1 Amendment to the Combined Heat and Power Act 16 CO2 strategy for passenger cars 2 Amendment to the Energy Sector Act (EnWG) on 17 Biofuels development liberalising metering 18 Reform of the vehicle tax to a pollutant and CO2 basis 3 Low-carbon power plant technologies 19 Energy labeling for passenger cars 4 Smart monitoring of power consumption 29 Amendment to the Heavy Goods Vehicle (HGV) Toll 5 Clean energy technologies Ordinance 6 Adoption of a modern energy management system 21 Air traffic 7 Promotional program for climate protection and 22 Water transportation energy efficiency (outside of buildings) 23 Reduced emissions of fluorinated greenhouse gases 8 Energy-efficient products 24 Procurement of energy-efficient products and 9 Feed-in law for biogas in the natural gas grid services 10 Energy Saving Ordinance 25 Energy research and innovation 11 Heating costs for rental housing 26 Expansion of electric transport 12 Low-carbon building retrofitting program 27 International projects for climate protection and energy efficiency 13 Energy-efficient modernization of buildings and social infrastructure 28 Energy and climate policy information programs for German embassies and consulates 14 Renewable Energies Heat Act (EEWärmeG) 29 Transatlantic climate and technology initiatives 15 Efficiency retrofitting program for federal buildings EFFIZIENZ ENTSCHEIDET
  • Example: Residential Households. EnEV (Energy Savings Ordinance) Prescribes tolerable energy consumption per square meter Standards became tougher this year (30 %) and will be tightened again in 2012 (30%) Leading to more efficient houses (insulation) EEWärmeG (Renewable Energy Heat Law) In newly built or significantly renovated houses, a share of the heat requirements (heat and hot water) needs to be covered from: Solar thermal water heaters Biomass-based boilers Biogas District heating Marktanreizprogram (investment subsidies)
  • Integrated Climate and Energy Programme – Summary.  Program of 29 key elements is without precedent both in the history of Germany and internationally  Translates into a package of 14 acts and ordinances  CO2 emission savings of about 220 million tones in 2020 or 36% vs. 1990 levels  Total costs of about 31 billion Euro  Annually saved energy costs of about 36 billion Euro  Net economic benefit of about 5 billion Euro per year.
  • Energy Supply Side Objectives. 20% of final energy consumption to come from renewable energy. 14% of heat demand in Germany to be covered from renewable energy sources. <10 % of fuels to be covered from biofuels. 27 – 30 % of electricity to come from renewables. 25% of electricity to come from CHP in 2020.
  • Renewable Energies in Germany and the FIT
  • Renewables as share of total final energy consumption in Germany in 2007. Shares of renewable energy sources among total final energy consumption in Germany 1) Total: 8,585 PJ Hydropower 0.9 % Wind 1.7 % 90.2 % RES share 2007 Other energy resources, 9.8 % 1) Biomass3) 6.8 % e.g. hard coal, lignite, mineral oils, natural gas Other renewables 0.4 % RES - Renew able energy sources; 1) Compared to RES in figures - w ith the conditions of June 2008 - the value have strongly increased. The reason for this is that the respective base value w ere adapted to more current data: for the RE-portion of the final energy consumption (FEC) so far the value of 2006 had to be used. The FEC 2007, w hich w as published in the 2nd half of 2008, is 8.585 PJ and therefore fundamentally low er than the value of the previous year - mainly due to the mild w inter. 3) solid, liquid, gaseous biomass, biogenic share of w aste, landfill and sew age gas; Source: BMU-KI III 1 based on AGEE-Stat and ZSW, according to Working Group on Energy Balances (AGEB); all figures provisional; Version: 15.12.2008 Source: BMU 2008
  • Renewable energy shares in Germany, 1998 - 2007. Renewable energy sources as a share of energy supply in Germany 8.0 7.0 Fuel consumption 1.2 6.0 Heat supply Electricity generation 1.0 5.0 2.6 [%] 4.0 2.3 3.0 0.1 2.0 0.03 1.5 1.3 3.1 2.5 1.0 1.4 0.8 0.0 1998 (2.1 %) 2002 ( 3.0 %) 2006 ( 5.7 %) 2007 (6.9 %) Deviations in the totals are due to rounding, provisional figures Share of primary energy consumption (PEC) calculated according to the efficiency method (acc. to the substitution method: 9.4 % ); Source: BMU-Brochure: quot;Renew able energy sources in figures – national and international developmentquot;, Internet Update, KI III 1; Version: 15.12.2008; provisional figures Source: BMU 2008
  • Renewable electricity in Germany, 1990 - 2007. Development of electricity generation from renewable energies in Germany, 1990 - 2007 EEG 2009 100,000 ex 1 January 2009 New EEG 90,000 Hydropower Wind energy 1 August 2004 80,000 Biomass* Photovoltaics Electricity generation [GWh] 70,000 EEG 1 April 2000 60,000 50,000 Amendment to BauGB November 1997 40,000 StrEG 30,000 1 January 1991 20,000 10,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 *Solid, liquid, gaseous biomass, biogenic share of w aste, landfill and sew age gas; StrEG: Act on the Sale of Electricity to the Grid; BauGB: Constuction Code; EEG:Renew able Energy Sources Act; Electricity from geothermal energy is not presented due to the negligible quantities of electricity produced; Source: BMU-Brochure: quot;Renew able energy sources in figures – national and international developmentquot;, Internet Update, KI III 1; Version: 15.12.2008; provisional figures Source: BMU 2008
  • Tariffs • ..are granted for 20 years • …vary by technology • …vary by plant (resource quality, plant size, feedstock) • …get lower over the years (degression) • …negotiated such that at current investment prices some (marginal) profit is attained.
  • Tariffs under the FIT, 2009. Technology Min Max Degressio Remarks (depends on…) (Cts/ (Cts/ n kWh) kWh) hydropower 3.50 12.67 1% plant size, age Methane from dumps, 4.16 11.00 1.5% Plant size, fuel sewage, mines Biomass 2.5 13? 1% Plant size, fuel, CHP, technology, feed-in geothermal 10.5 18 1% Plant size, technology, CHP Wind power: onshore (5) (10.4) 1% Location, technical offshore 3.5 15.50 5% compliance, repowering Solar photovoltaics 31.94 48.01 8 – 10 % Plant size, building integration BMU, 2008
  • Feed-in Tariffs are not just tariffs: • German Feed-in Law (EEG) is – Purchase price guarantee – Grid access guarantee – Purchase obligation, priority for feed-in • Grid operator buys at predefined rates; • National equitization fund • Every power customer pays • Law is reviewed every four years • Federal law • Annual degression incentivizes early action
  • Advantages of Feed-in Tariffs: Simple, stable, fair, effective. • Industry needs a long-term perspective for large investment and capacity decisions. • Operators need clear price signals, • non-discriminatory grid access, • reward for early action, • minimal transaction costs. • All of these factors reduce the total cost of deploying renewables through lower risk and lower transaction costs, and maximize deployment activity.
  • Advantages of Feed-in Tariffs: Simple, stable, fair, effective (II). • Germany has overachieved her renewable energy targets. – In 2000, the target for 2010 was 12.5%. – This target was actually reached in 2007 with 14.7%. • Costs for systems in Germany are lower than in other jurisdictions.
  • FIT regimes save cost. Böll 2008
  • Costs and Benefits
  • RE costs as share of power price
  • Expected development of the monthly EEG-costs per average household (3500 kWh/year). Euro 2005/month Source: BMU 2006
  • Future costs of wind power. Low-cost wind power As of 2015, prices for power from conventionally-fuelled power plants will surpass those for wind energy. New power-plant construction and rising procurement costs will determine conventional power prices.
  • CO2 avoidance through renewable energy, 2007. Total CO2 avoidance via the use of renewable energy sources in Germany, 2007 Electricity 23.1 million t 34.2 million t 19.5 million t 2.1 million t 78.9 million t Heat 21.9 million t 0.9 million t Total: approx.117 million t CO2 23.3 from this approx. 57 million t CO2 million t through the EEG 0.5 million t Fuels 15.0 million t 15.0 million t 0 10 20 30 40 50 60 70 80 90 CO2-avoidance [million tonnes] Hydropower Wind energy Biomass Photovoltaics Geothermal energy Solar thermal energy Biofuels Source: BMU-Brochure: quot;Renew able energy sources in figures – national and international developmentquot;, Internet Update, KI III 1; Version: 15.12.2008; provisional figures Source: BMU 2008
  • Income from building renewable energy in Germany, 2007. Turnover from the Construction of Renewable Energy Powered Installations in Germany, 2007 Total: approx. € 11 billion Solar thermal EUR 755 mill. Photovoltaics (6.9 %) 1) Geothermal energy EUR 4,675 mill. EUR 680 mill. (42.7 %) (6.2 %) Wind energy EUR 2,228 mill. (20.8 %) Hydropower EUR 70 mill. Biomass heat Biomass (0.6 %) EUR 1,440 mill. electricity (13.2 %) EUR 1,050 mill. (9.6 %) 1) Large plants and heat pumps Source: BMU-Brochure: quot;Renew able energy sources in figures – national and international developmentquot;, Internet Update, KI III 1; Version: 15.12.2008; provisional figures Source: BMU 2008
  • Income from renewable energy installations in Germany, 2007. Turnover from the Operation of Renewable Energy Powered Installations in Germany, 2007 Total: approx. € 14.5 billion Biofuels EUR 3,810 mill. Biomass heat 1) (26.2 %) EUR 1,880 mill. (12.9 %) Photovoltaics EUR 1,600 mill. Biomass electricity (11.0 %) EUR 2,520 mill. (17.4 %) Geothermal energy EUR 0.05 mill. (< 0.1 %) Hydropower EUR 1,200 mill. Wind energy (8.3 %) EUR 3,510 mill. (24.2 %) 1) Only fuels used exclusively to supply heat Source: BMU-Brochure: quot;Renew able energy sources in figures – national and international developmentquot;, Internet Update KI III 1; Version: 15.12.2008; provisional figures Source: BMU 2008
  • Total income from renewable energy in Germany, 2007. Total Turnover from Renewable Energy Sources in Germany, 2007 Total: approx. € 25.5 billion Wind energy Geothermal EUR 5,790 mill. energy 1) (22.7 %) EUR 680 mill. (2.7 %) Hydropower EUR 1,270 mill. (5.0 %) Solar energy 2) EUR 7,030 mill. (27.6 %) Biomass EUR 10,700 mill. (42.0 %) 1) Large plants and heat pumps 2) Photovoltaics and solar thermal energy; Source: BMU-Brochure: quot;Renew able energy sources in figures – national and international developmentquot;, Internet Update, KI III 1; Version: 15.12.2008; provisional figures Source: BMU 2008
  • Wind energy suppliers in Germany, 2007. Share of providers of wind energy installations in newly installed capacity in Germany up to end of 2007 Gesamt: 1,667 MW Siemens Wind Power Vestas 3.5 % 24.1 % Other 1.0 % REpower Systems 10.9 % Enercon 50.3 % Gamesa 2.6 % Fuhrländer Nordex 2.7 % 4.8 % Source: Molly, J.P.: Status der Windenergienutzung-Stand 31.12.2007; Deutsches Windenergie-Institut (DEWI) Source: BMU 2008
  • Total jobs in renewable energy in Germany, 2005 - 2008. Source: BMU 2009
  • The solar industry in Germany. • Since 2003, the turnover of the German PV industry has multiplied by a factor of 10 (total €5.5 bn) • Of this, 37.6 % were exported. • Over 40,000 jobs were created in solar factories and installation businesses. • Until 2010, the solar industry association BSW expects around 54,000 jobs, in 2020 maybe twice as many. • Preconditions: stable home market, investments into research. BSW Präsentation Marktentwicklung
  • The solar industry in Germany (II). BSW Präsentation Marktentwicklung
  • Farm revenues. BSW Präsentation Marktentwicklung
  • Sweetwater, TX •Nolan County, Texas had 20% of the population living in poverty in 2004. •Now 1,100 of the 15,000 residents have jobs directly related to wind energy. •Sweetwater area is steadily growing again for the first time in decades. •Nolan County‘s property tax base has expanded from $500 m in 1999 to $2.4 bn in 2008. Source: windpowerworks.org 2009
  • Manufacturing of utility scale wind turbine components in the US in 2008. •13,000 direct new jobs, nearly $2 bn in investment •Towers, components, gearboxes, housings, turbines, blades, materials, lifts… Source AWEA Annual Statistics 2008
  • Iowa School Districts • Each school that operates a turbine saves or generates between $3,500 and $560,000 annually. • Wind power presents a unique educational opportunity. • Forest City Community School District’s turbine annually produces about 60 percent of the district’s electricity consumption. This clean, locally grown power has allowed the district to reduce Wind energy became an issue its carbon dioxide emissions by of local pride in each of these 657 tons and sulfur dioxide school districts. emissions by 2.9 tons annually. Source: Iowa Policy Project 2007
  • Danish wind cooperatives 85% or all wind power capacity is owned by individual or local cooperatives. Source: Böll 2009
  • What helps develop community wind schemes? Source: windustry 2007
  • Conclusion • Germany has very ambitious climate change objectives, and implements the policies to put them into a reality. • Energy efficiency and renewable energies will be among the main vehicles. • The policies implemented are having multiple benefits: – increased energy security – decreased GHG emissions, – Creation of an industry of global significance, – Jobs and national income. • Among the social and economic benefits of the FIT is increased resilience against the current global downturn.
  • Thank you for your attention. Christine Wörlen, Ph.D. Am Weinhang 8 | 10965 Berlin | Germany fon +49 - (0)30 - 7809 787-0 fax +49 - (0)721 - 1513 323 46 mobil +49 - (0)1522 - 1971 234 mail woerlen@arepo-consult.com