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This presentation informs on the current status of the energy transition in Germany. How is the "Energiewende" progressing and how is the country's energy mix changing? The slides also look at the impact changing EU regulation has on Germany’s renewable energy goals and discuss what needs to change to ensure the sustainability and affordability of the energy transition. The presentation was held by Dr. Christian Nabe, Managing Consultant Power Systems and Markets at Ecofys, during the 16th Renewable Energy Finance Forum - Europe on 23 September 2014 in Dublin.
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Europe’s evolving power
markets - Germany
Christian Nabe
23/9/2014
© ECOFYS | |
Agenda
> Introduction Ecofys
> The Energiewende – a turnaround?
> Impact of EU regulation on the Renewable Energy Act
> Current developments in the German regulatory environment
> Impact on financing Renewable Energy
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© ECOFYS | |
Ecofys has been involved in Irish Power Systems studies.
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© ECOFYS | |
The Feed-in tariff, established in 1990 is a central element of the
German energy strategy, a long time before the Energiewende
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Source: Federal Ministry for Economic Affairs and Energy
14
EEG amend- ment
© ECOFYS | |
The Feed-in tariff resulted in a strong increase in
Renewable Energy production
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0
5
10
15
20
25
30
0
20
40
60
80
100
120
140
160
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
TW
h
PV
Waste
Biomass
Wind
Hydro
Share of power consumption
%
Production from Renewable Energies in Germany
Source: Based on : Federal Ministry for Economic Affairs and Energy (Erneuerbare Energien in Zahlen)
© ECOFYS | |
The Renewable Energy Sources Act Amendment in August 2014
was heavily influenced by EU regulation (state aid guidelines)
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More efficiency
(3) Focus on cost-efficient technologies
More coordination
(1) Binding target corridors for RES deployment
(2) Introducing quantity control mechanisms
More market integration
(4) Increase market integration through premium system
(5) Tendering scheme for ground-mounted PV
More diversified distribution of costs
(6) EEG levy on self-supply
(7) Adjusted exemptions for the industry
More Europe
(8) Open auctioning scheme for European neighbours
Source: Based on : Federal Ministry for Economic Affairs and Energy
Reducing negative prices -500 €/MWh
© ECOFYS | |
6.2
10.2
17
25.4
0
5
10
15
20
25
30
35
40
45
50
2000 2005 2010 2015 2020 2025
Renew
able
s s
hare
in %
45.0
40.0
Overall target corridor
> In 2025: between 40%
and 45% RES-E
> In 2035: between 55%
and 60% RES-E
Capacity additions
> Onshore wind and PV
2 500 MW (2.5 GW) per
year each
> Bioenergy 100 MW per
year
> Offshore wind 6.5 GW by
2020, 15 GW by 2030
Now a target corridor is set
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So
urc
e:
BM
Wi
20
14
Source: Based on : Federal Ministry for Economic Affairs and Energy
More coordination
(1) Binding target corridors for RES deployment
(2) Introducing quantity control mechanisms
More efficiency
(3) Focus on cost-efficient technologies
Focus on Wind and PV as
most cost-effective
solutions
© ECOFYS | |
In the beginning of 2015 the first auctioning scheme for
ground-mounted PV in Germany will become effective
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More market integration
(4) Increase market integration through premium system
(5) Tendering scheme for ground-mounted PV
Start of auctions for
all Renewables
Currently intensive
discussion on
auctioning framework
based on study by
Ecofys et al.
Status quo of discussion: 400 MW ground-
mounted PV target, 3 x 200 MW
auctioned. Project size 25 MW
Sealed pay-as-bid auction for 20 yrs of
market premium
© ECOFYS | |
Self-supply is fueled by high levies on the wholesale power
price, but these incentives are gradually reduced
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More diversified distribution of costs
(6) EEG levy on self-supply
(7) Adjusted exemptions for the industry
€/MWh Price duration curve Day-ahead market Germany 2013
Savings with self-generation
© ECOFYS | |
Further changes affecting the European integration of
support schemes and negative prices.
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More Europe
(8) Open auctioning scheme for European neighbours
Reducing negative prices
> EU regulation requires the German Support system to
open for projects from abroad (5% of new capacity)
> Foreign projects will be allowed to participate in the
auctioning scheme
> Restrictions may apply to ensure that projects have a
„physical impact“ on the German energy system
> The current support scheme design provides incentives for
Renewables to their market premium as negative prices
> New regulation reduces the market premium to zero if
prices are negative for six consecutive hours
© ECOFYS | |
> Grid restrictions will play an increasing role
> Curtailment is at an average level of about
1% of RE production, but locally a lot more
> Revenue losses from curtailment are
compensated (95%) and if they exceed 1%
of annual revenue (100%)
> However, there is a current debate on the
efficient level of network extension
> Curtailment compensation might be cut to
set incentives for development of
renewables to well connected areas
The future shows more risks due to delayed grid
extension
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Areas with curtailed energy
in Germany 2012
© ECOFYS | |
Summary and conclusions
> The “Energiewende” includes a continuous growth of renewable energy
investments
> The support strategy was based on the creation of an almost risk-free
environment combined with an attractive level of support
> German Renewable Energy targets determine a significant market size also
in the coming years.
> EU Regulations (state aid guidelines) are important drivers for change
– Partial international opening of support schemes
– Replacement of Feed-in tariffs with obligatory market premium scheme
– Introduction of auctioning schemes for projects
– Reduction of negative prices
> Managing the new investment risks becomes is the challenge in the
emerging new market environment.
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© ECOFYS | | 23/9/2014 Christian Nabe
Thank you!
13
www.ecofys.com
