Georg Erdmann, Prof. for Energy System at the Berlin University of Technology

1
Germany‘s Energiewendey g
P f D G E dProf. Dr. Georg Erdmann
TU Berlin; Chair Energy Systems
Member of the Federal Commission Energie der Zukunft“Member of the Federal Commission „Energie der Zukunft
President of the GEE e.V.
Edison-WEC Workshop „The Energy Transition in Europe“
Rome, 29 May 2013
© Prof. Dr. Georg Erdmann

2
REN Power Generation in Germany [Source AGEB]
120
Electricity from renewable sources [TWh]
80
100
60
20
40
0
1990 1995 2000 2005 2010
Hydro Wind Biomass PV

3
Gross Power Generation in Germany [Source: AGEB]
Gross electricity generation [TWh]
600
400
500
300
100
200
0
1990 1995 2000 2005 2010
REN Oil Hard coal Lignite Gas Nuclear Other

4
Agenda “German Energy Policy 2013”
• Origin and issues of the “Energiewende”
• Targets and conflicts of the “Energiewende”
• Actual challenges of the “Energiewende”
– Will there be enough grid investments until 2022?Will there be enough grid investments until 2022?
– What role of lignite power plants (Vattenfall)?
– Is there a need for a capacity mechanism?

5
(Nuclear) Energy Policy in Germany
• Autumn 2009: After a pro nuclear campaign Merkel• Autumn 2009: After a pro-nuclear campaign, Merkel
became reelected and replaced Social-democrats by
the Liberal party as junior partner
• But the modification of the Nuclear Energy Act (AtG)
was postponed until the state elections in North Rhine
Westphalia (NRW)
• May 2010: The ruling parties (Christian-democrats and
Liberals) lost the NRW elections
• In spite of the problems with the Euro, the Federal
Government asked energy researchers to develop
green energy scenarios with
P t i l h t b 4 t 20– Postponing nuclear power phase-out by 4 to 20 years
– Strong CO2 reduction targets
– Accelerated development of renewable energies
“Price” for
more nuclear
– Ambitious energy efficiency improvements
more nuclear

TPES in Green Scenarios
6
TPES in Green Scenarios
[Source: BMU-Leitstudie; DLR December 2010 p. 38]

7
German Energy Concept 2050 [September 2010]
Political target Base year 2020 2030 2040 2050Political target Base year 2020 2030 2040 2050
Greenhouse gas emissions 1990  40%  55%  50%  80‐95%
Primary energy consumption 2008  20%  50%
Energy productivity  2.1% p.a.
Power consumption 2008  10%  25%
CHP electricity share 25% “Price” for CHP electricity share 25%
Heat demand of building stock 2008  10%
Primary energy in building stock  80%
more nuclear
Modernization rate of buildings  2% p.a.
Final energy in transportation 2005  20%  40%
Number of electric vehicles 1 Mio 6 MioNumber of electric vehicles 1 Mio 6 Mio
REN share in energy
consumption
18% 30% 45% 60%
REN electricity share 35% 50% 65% 80%
REN electricity share 35% 50% 65% 80%

8
Nuclear Phase-out after Fukushima (11 Mars 2011)
• March 15, 2011: Federal government decree toMarch 15, 2011: Federal government decree to
immediately shut-down 8’800 MW nuclear power
(7 NPP + Krümmel) for tree months
April J ne 2011 “Ethic Commission” itho t energ• April–June 2011: “Ethic Commission” without energy
experts under the presidency of Klaus Töpfer
• Conclusion: “Der Ausstieg ist nötig und wird empfohlen”g g p
• July 2011: Parliamentary decision of a package of energy
law amendments
– Definitive shut-down of the 7+1 NPP
– Remaining 9 NPP (12’700 MW) shall be closed
until 2022
– Accelerated transmission grid investments
– EEG amendment (direct sales of EEG electricity)
Energiewende = Energy Concept 2050 plus nuclear phase-out

9
Agenda “German Energy Policy 2013”
• Origin and issues of the “Energiewende”
• Targets and conflicts of the “Energiewende”
• Actual challenges of the “Energiewende”
– Will there be enough grid investments until 2022?Will there be enough grid investments until 2022?
– What role of lignite power plants (Vattenfall)?
– Is there a need for a capacity mechanism?

10
“Magic Triangle” of Energy Policy
pricewürdigkeitCosts of energy servicespricewürdigkeitCosts of energy services
Umweltvertr äglichkeitEnvironment (without GHG) Supply security

l d d G
11
Energy related Land Use in Germany
[Data source: FNR 2012]
Energy crops (hectare) 2011 2012 2020
Land use for energy crops 2,06 Mio. 2,53 Mio. 4,4 Mio.Land use for energy crops 2,06 Mio. 2,53 Mio. 4,4 Mio.
Thereof for bio fuels 1,15 Mio. 1,16 Mio. 2,3 Mio.
Thereof for bio‐gas 0,90 Mio. 0,96 Mio. 2,1 Mio.Thereof for bio gas 0,90 Mio. 0,96 Mio. 2,1 Mio.
Share of arable land 17 % 21 % 36 %
F th l d i t fFurther land use requirements for
• Onshore‐wind and large PV installations
• Power transmission lines
• Pumped water storage facilities
• Geothermal facilities, bio‐methane facilities, …
( )
• Lignite mines (open pits)

12
Power Generation Capacity[Source: ÜNB 2012]
2011 2011
Capacities in GW
2011
(real)
2011
(model)
2012 2013 2014 2015
Installed for generation 153,3 153,3 168,3 169,5 183,2 192,5
./. Non‐available load 44,4 60,3 73,9 74,7 83,6 93,4
./. Energencies 5,6 6,2 6,7 6,2 6,2 6,5
./. Revisios 2,1 2,1 2,0 2,0 2,0 2,0
./. Reserve for system
services
4,6 4,6 4,7 4,8 4,9 5,0
services
= Secured load 96,7 80,1 81,5 81,8 86,1 85,6
./. demand 81,2 81,2 81,7 81,7 81,7 81,7
Remaining load 15,5 ‐1,1 ‐0,1 0,1 4,4 3,9
Load incl capacities from
17 2 0 8 1 7 2 2 6 5 6 0
p
neighboring countries
17,2 0,8 1,7 2,2 6,5 6,0

13
Ch i thChanges in the
Power Plant
P tf li til 2022Portfolio until 2022
Zubau
Still‐
legung

14
Affordability of Electricity
Ability to payAbility‐to‐pay
• Number of customers interrupted due to outstanding
electricity and gas payments
• Number of customer receiving Social support payments
for their energy purchases
• Special benefits for energy intensive customersSpecial benefits for energy intensive customers
Willingness‐to‐pay
• Special benefits for energy intensive customers (Lobbying)
• Energy efficiency improvements
• Closures of energy intensive activitiesClosures of energy intensive activities
• Own generation (today option for avoiding grid fees, REN
levy and electricity taxes)

15
Revenues from Power Sales [Source: Destatis 2012]
54,6
58,9
61 3
63,3
60
Billion Euros
39 4 40,6 41,5 41,2
39 38 1
41
47,3
50,5
58,5
61,3
50
39,4
40
,
40,8 41,5 41
39
36
38,1
37,3
43
30
40
20
10
1991 99 2000 200 20 0
1991 1995 2000 2005 2010

16
Aggregated Electricity Expenditures 2011
Billion Euros Share %Billion Euros Share %
Total electricity expenditures for final consumers 63,6 100,0
Government induced elements 22,0 34,5
thereofthereof
Electricity tax 7,2 11,4
Concession fees 2,2 3,4
REN l 12 3 19 4REN levy 12,3 19,4
CHP levy 0,2 0,3
Government regulated elements 17,6 27,7
thereoff
Power transmission fees 2,2 3,5
Power distribution fees 15,4 24,2
Market driven elements 24,0 37,8
thereoff
Market value of REN electricity 4,4 6,9
y , ,
Generation and marketing 19,6 30,9

17
Decomposition of the REN Levy 2012/3
6 t/kWh
5.27
0.79
0.52
0.30 0.05 0.04 ‐0.54
‐0.31
‐0.09 0.0 ‐0.02
0.48
0.31 0.12 0.03
5
6 ct/kWh
3.59
3
4
Other effectsVolume effect Price effect
1
2
0
1
012
olar
ore
mass
ore
ther
olar
ore
mass
ore
ther
cast
erve
nces
ther
013
REN levy 20
So
Wind Onsh
Biom
Wind Offsh
Ot
So
Wind Onsh
Biom
Wind Offsh
Ot
price Forec
quidity rese
N preferen
Ot
REN levy 20
R
W
W
W
W
DA‐
Liq
RE
R

S l 2020
18
REN Levy Scenarios until 2020 [Source: EWI 2012,
BMU 2009-2011, IE Leipzig 2012, r2b 2012, Erdmann 2012]
8.0
9.0 ct/kWh
6.0
7.0 BMU forecast May 2013
4.0
5.0
2.0
3.0
0.0
1.0
2000 2005 2010 2015 2020
2000 2005 2010 2015 2020

G C f f ll
19
Generation Cost of PV Roof Installations
[800-1000 kWh/kWp·a, Interest rate =5-8%]
Power price,
100
120
generation cost
[ct/kWh ]
60
80
40
60
PV generation cost
0
20
4
4
4
4
4
4
2
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
Household electricity price (incl. VAT)
Q1-Q4
Q1-Q4
Q1-Q4
Q1-Q4
Q1-Q4
Q1-Q4
Q2
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Source: Johannes Henkel and Lars Dittmar 2011

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Selection of Inconsistencies
• Immature technologies for mass market deployment• Immature technologies for mass market deployment
(offshore‐wind, batteries, CAES, power‐to‐gas, …)
• European, national and regional greenhouse gas
d freduction targets for 2020
• Financial support of CHP versus increased energy
efficiency of (old and new) buildingsefficiency of (old and new) buildings
• Ambitious energy efficiency requirements for new versus
weak efficiency incentives for old buildings
• Expansion of renewable electricity versus reduction
targets for electricity consumption
E l i i it i i d ffi i• Energy only pricing, capacity pricing, and energy efficiency
• Land use conflicts with biomass and transmission lines
Marginali ation of nat ral gas (bio methane)
• Marginalization of natural gas (bio‐methane)

21
Actual Challenges of the “Energiewende”
• Will there be enough grid investments until 2022 for
– Shutdown of the remaining nuclear plants
– Transport of (offshore) wind power to from north to southp ( ) p
• New role of lignite power plants
– Merit-Order effect
– GHG emissions
• Is there a need for a (nation wide or local) capacity mechanism?Is there a need for a (nation wide or local) capacity mechanism?

G G 2010
22
Gross Power Generation in Bavaria 2010
4,9%
Nuclear
Coal
10,3% 3,9% Gas
Other
13,3%
23,3%
Hydro
PV
57,6%
2,8%
0,6%
6,6%
Wind
Ohter REN
Nuclear

Gross Power Generation in
23
Gross Power Generation in
Baden-Württemberg 2010
NuclearNuclear
Coal
28%
3,9%
0 3%
Gas
Other
0,3%
10,4%
13,3%
Hydro
PV
55%
0,6%
1%
1 3%
Wind
Other REN
Nuclear
55% 1,3% Other REN

closed
24
N l
opetrating
Nuclear
Power plants
dand
Transmission
G id E t iGrid Extensions
EnLAG 2009
NABEG 2011
2015
2017

25
– GHG emissions

Merit Order of the
26
Merit Order of the
German Power Plant Portfolio 2010
/Marginal cost [EUR/MWh]
150
100
Load (wo wind and PV)
50
l
al
Nuclear Lignite
CCGT Gas
Hard coal
Hard coa
Hydro, Biomass, CHP
0
Electric load 93 GW

Merit Order of the German Power Plants
27
Merit Order of the German Power Plants
with Wind and PV Portfolio 2010
/Marginal cost [EUR/MWh]
150
100
Load (wo wind and PV)
50
l
al
Hydro, Biomass, CHP Lignite
CCGT Gas
Hard coa
Hard coa
0
Electric load 93 GW

Power Supply Scenario for 2030 with
28
Power Supply Scenario for 2030 with
50 Percent REN Electricity
100 L d [GW] After nuclear phase‐out, phase‐out of coal?
80
100 Load [GW] After nuclear phase out, phase out of coal?
60 Ordered load curve
20
40
Ordered residual load curve
(without biogas / bio‐methane)
0
20
1000 2000 3000 4000 5000 6000 7000 8000
Lignite ≥ 6000 h/a
‐20
1000 2000 3000 4000 5000 6000 7000 8000
‐40

29
– GHG emissions

Contribution of Remaining Power Plants
30
Contribution of Remaining Power Plants
in the Electricity Supply Scenario for 2030
100 L d [GW]
80
100 Load [GW]
60 Ordered load duration
20
40
Ordered residual load without
biogas / bio‐methane
0
20
1000 2000 3000 4000 5000 6000 7000 8000
Contribution of conventional power plants
‐20
1000 2000 3000 4000 5000 6000 7000 8000
‐40

31
Volatility of Wind Power [Source: Ehlers 2011, S. 100]
Amprion
20,000
Wind power generation [MW]
Amprion
EnBW
50Hertz Transmission
Transpower
16,000
8 000
12,000
Gradient
8,000 MW/h
No capacity
contribution
4 000
8,000
8,000 /co t but o
0
4,000
1.1.2010 31.1.2010

Prices and Generation Costs
32
Prices and Generation Costs
[Prices and Costs of 2012]
120 PV
Biogas
Average prices / costs [Euro/MWh]
100
Wind
80
60
Day ahead
New GT
40
Day‐ahead
Price
20
0
0

33
Tack så mycket
Tel: +49 (030) 314 246 56
Fax: +49 (030) 314 269 08
georg.erdmann@tu‐berlin.de
georg.erdmann@prognoseforum.de

34
Research Profile of „Energy Systems“
(Stochastic)
InvestmentsWind and PV
(Stochastic)
Systems Analysis,
Econometrics …
Business
strategies
Prices
Investments
CCS
Regulation
power
Markets
g
Energy
Innovations
Hydrogen
and fuel cells
Social
welfare
Energy
security
Power-to-gas
Energy lawsBio fuels
Competition
Power to gas
CO2 allowances
Industrial Economics
Evolutionary Economics
Public Choice …

Georg Erdmann, Prof. for Energy System at the Berlin University of Technology

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Georg Erdmann, Prof. for Energy System at the Berlin University of Technology