The German Energiewende: Implications for Europe Climate and Energy Package. Myths and costs in the context of the road map 2050 Warsaw, September 27th

The German „Energiewende“:

Implications for Europe

Climate and Energy Package. Myths and costs in the context of the road map 2050

Warsaw, September 27th 2011

Dr. Sebastian Bolay: The German „Energiewende“: Implications for Europe 2

“Speedier Energiewende”

• Adjusted goals 2020: – Share of Renewables 35 %

– Reduction of electricity consumption 10 %

– Reduction of heat demand in buildings 20 %

• Goals 2050 still valid:– Reduction of CO2-emissions at least 80%

– Electricity production: Renewables 80%

– Reduction of energy consumption 25%

• Phase-out of nuclear power until 2022

• Strengthening the supergrid

• Rising prices: Protecting the eletricity intensive industry

Post Fukushima Energy Policy in Germany


West German Energy Programme 1977: Following the French path

Level today

Nuclear Power

Coal

Gas

Lignite

TWh

Year

Foundation of the Green Party

Anti nuclear protest beginns


Reality 2011

59%

21%

20%

4%

5%

7%

3%

1%

Coal, Lignite, Gas

Nuclear Power

Wind

Biomass

Water

Solar

Other

German Electricity Production first half year 2011: 283 TWh

Quelle: BDEW, AG Energiebilanzen

Renewables


0

500

1000

1500

2000

Coal OilGas

Nuclea

r

Wat

erW

ind

Other

Ren

ewab

les

GW

2010

2015

2020

2025

2030

The international context: Growth of production capacities

+ 36 % + 48 %

+ 55 %

+ 153 %

+ 437 %

+ 594 %- 42 %

Eigene Darstellung, Zahlen: Frost und Sullivan 2011

•Capacity growth until 2030: 41 %

•Generation growth until 2030: 63 %

•Rising problems to satisfy electricity demand: Secure supply as a decisive economic factor

Energiewende is not a German

phenomenon


Germany has lost its tecnological edge in renewables

Goldwind9%

Enercon7%

Suzlon6%Gamesa

6%

Sinovel6%

Dongfang6%

Sonstige30%

Siemens5%

Vestas15%

General Electric9%

Shares of newly installed global wind capacity 2010

Quelle: VDMA, Dewi

7%

45%

69%

21%

24%34%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2010

Others

Germany

China

Share of global solar turnover


Nuclear Power phase-out

• Immediate closedown of the seven oldest nuclear plants and Krümmel

• This corresponds to 40 % of German nuclear capacity

• Last three plants will be closedon 31st december 2022

• Christian-liberal coalition returned to the accord between the the socialist-green government and the nuclear plants operators in 2000

• Decision to activate 2.000 MWfossil reserve capacities


Is there a European energy market?

• The political goal is to create an EU internal energy market

• This has not been achieved yet

– The grid connections betweenthe member states are only weakly developed

– No European electricity exchange exists

– Therefore there is no European merit order

3.400

3.900

3.200

2.100

1.000

4.000 1.700

1.600

1.400

1.800

3.400

600

600

1.800

Interconnectors` Capacities 2009

F

NL

DK S

CH A

PL/CZ


Merit Order: Pricing at an electricity exchange

Base Load Peak LoadMid Load

Nuclear Power, Lignite Coal, Gas Pump Storage, Oil

Demand kWh

Ma

rgin

al

Co

sts

t /

€/M

Wh

Supply Prognosis

Market Price

Spread/Earnings


- 3 000 000

- 2 000 000

- 1 000 000

-

+ 1 000 000

+ 2 000 000

Januar

Februar

März

April

Mai

France

Belgium

Netherlands

Denmark

Switzerland

Austria

Poland

Czech Republic

Others

Sum

MWh

Export

Import

Germany has lost its exporter status

• 55 % of missing nuclear production is replaced by better weather and higher solar production

• 45 % is replaced by imports


European implications: grid stability

• Germany is now net electricity importer

• After the shutdown of the nuclear power plants with their stable feed-in, the risk of blackouts has risen also for the neighbours

• Especially southern Germany lacks production capacities

• Other countries like Switzerland, Austria, Netherlands, France cannot be sure to get the needed energy

• They will have to strengthen their grids faster to take in more volatile power from Germany


European implications: prices

• Germany has enough capacity to supply itself

• But: merit order has shifted towards more expensive electricity production

• Thus, it is more lucrative for power plants from neighbouring countries to sell their electricity in Germany

• Lower prices in Germany may result

• But also higher prices in the neighbour countries because of reduced supply (scarcity signals)

• Prices in France, UK, Netherlands and Belgium have risen by 10 %

74,0

76,0

78,0

80,0

82,0

84,0

86,0

88,0

90,0

92,0

Before Energiewende After Energiewende

GW

closed nuclear plants

reserve

peak demand


European implications: CO2-certificates and climate targets

In 2010 nuclear plants produced 43,6 TWh and zero emissions

Same amount pro-duced by fossil plants:

26 Mio tons CO2

400 Mio. Euro extra for CO2-certificates at

15 Euro/tonReplacement by imports: Germany exports emissions

ETS: Higher Prices for all participants

Climate Targets?


Neighbours‘ strategies

Tusk: „Coal is back on the agenda“

•Expects severe power shortages

•2016 lack of 3-6 GW

•Look for other suppliers

•Strengthen the grids

•Finish nuclear plant near Kaliningrad

•Threatens Lithuania‘s nuclear plans

•Growing importance in northwestern Europe

•Enlarge the capacity by 50 % until 2018

•Until 2014 already 7 GW are under construction

•Become net exporter

•Enlarge nuclear power plant

•Rising exports in the long run not possible

•No ambition to close German gap


EU policy

Immediate reaction after Fukushima: stress tests

- European Council decision in March: all nuclear power plants in the EU have to undergo a risk and safety assessment (stress-tests)

- European Nuclear Safety Regulators Group elaborated common specifications, stress tests started in June

- First results to be presented at European Council in December

EU legislation:

- The EU has competence for: functioning of energy market, interconnection of networks, security of supply, energy efficiency and renewable energies, climate protection

- The EU has NO competence for: choice and exploiting of energy sources, general structure of energy supply in Member States

- Nuclear safety lies inbetween: framework directive but no EU standards


Future EU policy

Is the German unilateral reaction to Fukushima the starting point for a real common EU energy policy?

• Secure supply is a European Issue: Nabucco

• Install renewables where it is cheapest

• Creating level playing field for all companies

• EU energy policy as a means to further strengthen integration


Dr. Sebastian Bolay

Director Energy and climate policy

German Chamber of Inudstry and commerce

Breite Str. 2910178 Berlin

Fon +49(0)30.20308-2202Fax +49(0)30.203085-2202

[email protected]

Documents

The German Energiewende: Implications for Europe Climate and Energy Package. Myths and costs in the context of the road map 2050 Warsaw, September 27th