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The transition to auction system of REN support failed: Less investment and higher cost

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Hans-Josef Fell

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The transition to auction system of REN support failed: Less investment and higher cost

  1. 1. The transition to auction system of REN support failed: Less investment and higher cost. 18th December 2018 Hans-Josef Fell President of the Energy Watch Group Member of the German Parliament 1998-2013
  2. 2. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group 100% Renewables for Ukraine with decentralised investment will bring:  More political independence through energy independence  Contribution to peace  Economic growth and new jobs  Contribution to democratic development  Major contribution to Paris Agreement climate goals
  3. 3. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Source: Agentur für Erneuerbare Energien e.V., trend:research, 12/2017 Renewable energy in the hands of citizens Distribution of owners of installed capacity for renewables-based electricity generation in Germany, 2016 Energy utilities 10.3% Big Four utilities (E.ON, RWE, EnBW & Vattenfall) 5.4% Funds/ banks 13.4% Project developers 14.4% Commercial 13.4% Farmers 10.5% Individuals 31.5% Other 1.0%
  4. 4. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Political support stimulates renewable growth Share of renewable electricity in Germany 3.4 4.7 6.2 6.6 7.7 7.6 9.3 10.2 11.6 14.2 15.1 16.3 17 20.4 23.7 25.2 27.4 31.531.6 36.2 40 0 5 10 15 20 25 30 35 40 45 1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Shareinpercent Forecast in 2000 for 2010: 12% Forecast in 2010 for 2025: 40% - 45% ~ 90 % Investment from: S&M; individuals, cooperatives, farmers ~ 10% from the big 4 utilities (RWE, E.ON, Vattenfall, EnBW Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Installed Wind Capacity in G and GB shows: Feed in Tariff is more successful and cheaper than Tendering Source: Volker Quaschning, 2016: http://www.volker- quaschning.de/datserv/windinst/index.php in MW Cost of wind energy: ~7 Cent/kWh in Germany ~13 Cent/kWh in GB Germany, feed in tariff Tendering
  5. 5. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group German Switch: FIT to Auctioning is calamity Windpower Permissions in GW are falling 0 2 4 6 8 10 2014* 2015 2016 2017 2018 GW Sourcee: BNetzA 2019, own depiction 2017: Auction law in operation
  6. 6. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group German Switch 2017: FIT to Auctioning is calamity Windpower new-built capacity fall in 2018 0 1 2 3 4 5 6 2012 2013 2014 2015 2016 2017 2018 GW Source: BWE 2019
  7. 7. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group German Switch 2017: FIT to Auctioning is calamity Windpower: Investment is falling; tariff is rising Sourcee: BNetzA 2019, own depiction 0 50 100 150 200 250 300 0 1 2 3 4 5 6 7 26.05.19 22.08.19 29.11.19 27.02.20 24.05.20 24.08.20 26.10.20 Numberofbits EurocentperkWh Committed installation date Bits Average tariff
  8. 8. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Development of Feed-in Tariff for ground- mounted PV before and since Tendering Introduction of Tendering
  9. 9. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group EU lost the leading role in Renewables. Due to the switch to auctioning, the EU yearly investment was cut by more than a half 0 20 40 60 80 100 120 140 160 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 InMilliarden$ USA Europa China Deutschlan d Japan Indien
  10. 10. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Auctioning versus FIT  Auctioning leads to fewer investment  Exclude small and medium actors  FIT stimulates faster cost decline •In Germany 2018 auctioning wind power prices even increased in 2018 Conclusion: •Auctioning is favarable for utility scale investment (above 40 MW) •FIT is necessary for decentralised investment (under 40 MW)
  11. 11. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Current Ukraine Legislation Proposal for New Green Tariff Current legislation proposal will worsen today‘s situation:  Auctioning is more prone to corruption  REN increase will be too low: • Further dependence on foreign energy imports • No significant contribution to Paris climate goals • Missing out on huge global REN economic growth Current Proposal: • Switch to Auctioning From 2020 >10 MW solar and >20 MW wind From 2023 solar >1 MW and Wind >3 M • Solar Green tariffs cut by 25% by 2020; Payback time end 2030 Today’s situation in Ukraine: • No significant investment in REN Ukraine • Even the lowest REN targets cannot be fulfilled • Investment comes mainly from big companies (oligarchs) • Cooperatives, SMEs, farmers can hardly take part
  12. 12. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Historic breakthrough in 2000: Enactment of Renewable Energy Act (EEG) in German Parliament Key points for an effective feed-in law:  Privileged grid access/priority dispatch  Feed-in tariff has to be appropriate for economic operation, with variations dep. on technology and size  Funding of feed-in tariff via electricity rate  No cap for feed-in of renewable energies  Guaranteed period of remuneration *Source: Hans-Josef Fell, „The shift from feed-in-tariffs to tenders is hindering the transformation of the global energy supply to renewable energies“, Policy paper for IRENA, July 2017. Available from: http://energywatchgroup.org/wp-content/uploads/2018/01/FIT- Tender_Fell_PolicyPaper_EN_final.pdf
  13. 13. Hans-Josef Fell – MdB (1998-2013) Präsident der Energy Watch Group Hans-Josef Fell – MdB (1998-2013) Präsident der Energy Watch Group Feed-in tariff for combined renewable power producer For more information: https://www.hans-josef-fell.de/content/index.php/dokumente/documents- in-foreign-languages/english/921-09-2016-english-incentive-scheme-for-100-renewable-combined- power-solutions Tariff paid for per law if: • Power generation meets demand each hour of the year • Mix of 100% renewable power generation • Frequency and voltage stability, reactive power is guaranteed Effects: • Grid stability is growing, decentralised bottom-up approach • Integration of heating/ cooling and electro- mobility • Development of storage technology • Emergence of smart cities
  14. 14. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Germany Nov 2016, COP22, Marrakesh: 48 countries (Climate Vulnerable Forum) decided for 100% RE target More Countries e.g.: Denmark; Sweden; Costa Rica; Iceland; Cape Verde Cities with 100% RE target e.g.: Barcelona; Masdar City; Munich; Msheireb; Downtown Doha; Vancouver; San Francisco; Copenhagen; Sydney; Lemberg Companies with 100% RE target e.g.: Google, Coca-Cola, Ikea, Walmart Source: 100% Renewables, 2018: Available from: http://www.go100re.net/
  15. 15. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Study Release: LUT University & Energy Watch Group 100% Renewable Energy across Europe is More Cost Effective than Current Energy System with zero GHG emissions across power, heat, transport and desalination sectors before 2050 Funded by:
  16. 16. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group 100% Renewables in Ukraine: Electrification across all sectors is inevitable • Electricity in 2050: 7 times that of 2015 • Nuclear and fossil fuels are phased out completely
  17. 17. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group 100% Renewables in Ukraine: Most energy generation based on wind & solar
  18. 18. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group 100% Renewables in Ukraine: Energy cost decline from 62€/MWh to 58€/MWh
  19. 19. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group A 100% renewable energy system in Europe will support millions of local jobs in the power sector • Approximately 3.5 million total cleantech jobs • Phaseout of 800.000 fossil fuel jobs • 1.5 million new EU jobs created by 2050
  20. 20. Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Hans-Josef Fell Member of German Parliament (1998-2013) President of Energy Watch Group Policies necessary for renewable growth & climate protection Laws to stimulate investment  Feed-in-tariffs (FiT) (GET FiT for developing countries)  Auctions only for RE capacities above 40 MW  Premium options, net metering and other  Abolish subsidies for fossil fuel & nuclear energy, fossil chemistry and intensive agriculture  Tax relief for renewables  Carbon, methane, radioactivity tax  Research and education on renewables and organic farming  Reducing obstacles for approval of RE projects  Reforesting and regreening of degraded lands Not successful: • Auctions under 40 MW or certificate systems • Emission trading
  21. 21. Thank you very much for your attention! www.hans-josef-fell.de www.energywatchgroup.org

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