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The Energiewende in a
nutshell
BERLIN, 19 JULY 2017
Dimitri Pescia, Agora Energiewende
1
Agora Energiewende – Who are we
2
Independent think tank with more than 20 energy
policy experts
Independent and non-partisan
Methods : scientific assessments, dialogue,
putting forward proposals
Mission: How do we make the energy transition in
Germany and worldwide a success story?
Project duration 2012-2021
Financed by the Mercator Foundation and the
European Climate Foundation
Q1 : What is the
German
Energiewende?
The Energiewende is a multi-sectorial transformation
strategy, with clear mid-term and long-term objectives
Renewable energies development
18% 30% 45% 60%
>35% >50% >65% >80%
Renewable
electricityTransport
Renewable
heat
Reduction of energy consumption*
-20% -50%
-10% -25%
Power(consumption
reduction)
Transportfinal energy
consumption reduction)
Heat(final energy
consumption reduction)
-20% -10% -40%
-80%
Reduction of building
primary consumption
Number of electric
vehicles
1 M 6 M
Rate of thermal
renovation 2% p.a.
Reduction of energy intensity by 2,1% p.a.
Climate(CO2 emissions
reduction p/r 1990)
Nuclear phase-out
(end 2022)Competitiveness
Security of
supply-40% -55% -70% >-80%
Cogeneration
25%
Strategic
objectives
Sectorial
targets
Political
objectives
2020 2030 2040 2050
Targets in…
(of final energy consumption)
* primary
The Energiewende means fundamentally changing the power
system from coal/nuclear to renewables.
AGEB (2016), BReg (2010), EEG (2014), own calculations * preliminary
5
Gross electricity generation 1990, 2016 and 2050Phase out of Nuclear Power
Gradual shut down of all nuclear power plants until
2022, following a clear plan per plant
Increase in efficiency
Reduction of power consumption compared to
2008 levels: - 10% in 2020; - 25% in 2050
Development of renewable energies
Share in power consumption to increase to:
40 - 45% in 2025; 55 - 60% in 2035; ≥ 80% in
2050
Reduction of Greenhouse Gas Emissions
Reduction targets below 1990 levels:
- 40% by 2020; - 55% by 2030; - 70% by 2040;
- 80% to - 95% by 2050
1990 2016* 2050
The nuclear energy act rules the nuclear phase out until 2022 –
with renewables overcompensating the loss in nuclear power
6
Gross electricity generation of nuclear and renewables 1970 - 2025
AGEB (2015a), AGEE (2015), BNetzA (2014), Statistisches Jahrbuch der DDR (1973 - 1988), own calculations
Start
Anti-Nuclear
Movement
Chernobyl
1. Nuclear
phase-out
Withdrawal of
the 1. Nuclear
phase-out
Fukushima
2. Nuclear
phase-out
Start
Anti-Nuclear
Movement
Chernobyl
1. Nuclear
phase-out
Withdrawal of
the 1. Nuclear
phase-out
Fukushima
2. Nuclear
phase-out
The Energiewende yet has a disruptive structural dimension :
it implies a new energy world –
characterized by flexibility, decentralized structures
and a wide variety of actors
7
Illustrative visualisation of the old and the new electricity system
Own illustration
high voltage low voltagemedium voltage
Public opinion about the Energiewende
Forschungsruppe Wahlen, commissioned by BDEW 2016
8
German citizens strongly support the goals of the
Energiewende. However, only about 50 per cent of Germans
think the Energiewende is properly managed.
Q2 : How is Germany
progressing with its
Energiewende?
Renewables are the most important source in the German
power system – followed by lignite and hard coal
AGEB (2016) * preliminary
10
Share in gross electricity generation by fuel 2016
AGEB (2016) * preliminary
Gross electricity generation by fuel 1990 - 2015
Wind12%
Solar PV6%
Biomass8%
Hydro3%
Nuclear13%
Lignite23%
Hard Coal17%
Natural Gas12%
Others5%
Renewables29.5%
0
100
200
300
400
500
600
700
1990 1995 2000 2005 2010 2016
TW
h
Renewables Nuclear LigniteHard Coal Natural Gas Others
191
85
150
110
79
33
648 TWh
The key insight for the Energiewende:
It’s all about wind and solar!
11
Gross electricity generation of renewable energies 2000 - 2035
2000 - 2014: AGEB (2015a); 2015 - 2035: own calculation on basis of BNetzA (2014)/BNetzA (2015b)
Cumulative installed Capacity in 2016
~ 90 GW variable renewables
45.5 GW onshore wind (+4.3 GW net p/r 2015)
4.1 GW offshore wind (+0.7 GW p/r 2015)
40.3 GW Photovoltaic (+1 GW p/r 2015)
2025 target
40-45%* 2035 target
55-60%*
* Share of gross power consumption
0
2
4
6
8
10
12
14
16
Wind(onshore)
Solar PV(large scale)
Hard Coal Gas(CCGT)
Nuclear Hard CoalCCS
ct/
kW
h
Germany
Wind energy and solar PV are the world the cheapest low-
carbon options and already cost competitive to newly built
fossil power plants
12
Range* of levelized cost of electricity (LCOE) 2015
Agora Energiewende (2015e) * based on varying utilization, CO2-price and investment cost
Hinkley
Point C
(UK): 11,3
ct/kWh
International
5 - 9
ct/kWh
6 - 9
ct/kWh7 - 11
ct/kWh
7 - 12
ct/kWh
6 - 13
ct/kWh
13 - 16
ct/kWh
Q3 : Is security of
supply in Germany
threatened by
reliance on
renewables?
The German power system is currently one of the most reliable
in the world despite a high share of variable renewables
Unplanned System Average Interruption Duration Index (SAIDI, excluding exceptional events), 2013
CEER (2015)
14
*
* The German SAIDI index decreased to 13 minutes in 2015
The power system and power markets will need to cope with a
highly fluctuating power production from wind and solar
15
Electricity generation* and consumption* in three sample weeks, 2023
Fraunhofer IWES (2013) * Modelling based on 2011 weather and load data
February 2023 August 2023 November 2023
The variable output of renewables is managed with power
system flexibility. Baseload operation of conventional power
plants is an obsolete concept.
www.agora-energiewende.org
Power generation from nuclear, hard coal and lignite power plants
and demand in Germany, 23 to 30 March 2016
www.agora-energiewende.org
Electricity generation in Germany 22-24 August 2015
Biomass & run-of-river
Wind offshore
Dispatchable generation
Wind onshore
PV
Load22
Au
g
23
Au
g
17%
Conv.
Export
83%
RES
The variable output of renewables is managed with power
system flexibility.
Own calculations on basis of Agora Energiewende (2015b)
17
Electricity generation and consumption in a sample week with 50% RES shareKey flexibility options
Flexible fossil and bioenergy power plants
(incl. CHP)
Grids and transmission capacities for
exports/imports
Demand Side Management
Storage technologies (Batteries, Power-to-
Gas)
Integration of the power, heat and transport
sectors (power-to-heat, electric cars)
Make the power markets more flexible : the
electricity price on short-term markets (day-
ahead, intraday, balancing) must reflect the real-
time value of power
Variable output must not be confused with uncertain output!
Difference between day-ahead wind energy forecast and real feed-in (week in May 2015 in the North-East of Germany)
50 Hertz
18
Improved forecasting, highly
responsive control systems and well-
functioning short-term markets
(intraday and balancing) enable the
integration of high share of
renewables.
Upgrading the electricity grid is crucial for the future of
Germany’s power system. At the same time, decentralization is
a new and lasting structural trend of the Energiewende.
19
Renewables are deployed in a highly
decentralized and asymmetric patchwork of
small-scale facilities.
An enhanced grid infrastructure (national and
supranational) is necessary to transport
electricity.
On the other side, decentralization is a new
and lasting structural trend of the
Energiewende. Regional power markets must
deliver a new framework to decentralization.
BNetzA (2014)
German network development plan
2025
Fraunhofer IWES (2013)
Installed wind capacity (103 GW,
Scenario „Best Sites“) 2033
National and supra-national infrastructure
(centralized) allows for “smoothening effects”
between different consumption and production
patterns.
Q4 : Have electricity
prices for German
households risen due
to the development of
renewables ?
After years of increases, electricity prices for German
households have been relatively stable since 2013
5.9 7.2 8.4 8.1 8.4 8.4 8.3 7.9 7.6 7.4 6.7
5.35.5
5.7 5.8 6.1 6.2 6.7 6.8 6.7 6.8 6.9
6.35.9
5.8 5.8 5.8 6.0 6.5 6.5 6.6 6.8 7.41.31.5
1.5 1.5 1.7 1.7 1.7 1.6 1.6 1.7 1.7
1.01.1
1.2 2.13.5 3.6
5.3 6.2 6.2 6.4 6.9
20.121.4
22.8 23.425.5 26.1
29.2 29.5 29.1 29.8 30.3
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
ct/
kW
h
Procurement, distribution, margin Taxes Grid charges Concession fee EEG surcharge KWKG surcharge Other surcharges
21
Average electricity prices for a 4-person household (3500 KWh annual use), 2007-2017
BNetzA 2016, *own estimates
+ 45%+ 3.5%
Private households spend about 2.5 percent of their total
spendings on electricity. Due to higher efficiency, annual
electricity bills are similar to those in other industrial countries
Destatis (2015a)
22
Private household spending 2000 - 2014
World Energy Council (2015), own calculations
Annual electricity bills of private households 2014
Annual
Electricity
Consumption
Electricity
Price
Annual
Electricity
BillkWh ct/kWh EUR
Denmark 3,820 29 1,121
USA 12,294 9 1,110
Germany 3,362 29 987
Japan 5,373 18 971
Spain 4,038 23 912
Canada 11,303 8 851
France 5,830 14 834
Great Britain 4,143 17 717
Italy 2,485 23 580
Poland 1,935 15 291
As an early mover, Germany developed renewables when they
were still expensive, inducing costs that will be borne by
German consumers the years to come. This contributed
however to falling prices worldwide.
23
Sum of wholesale electricity price (pink) and EEG surcharge (blue), 2010 - 2035
Agora Energiewende based on Öko-Institut (2016); Forecast as of 2017
This initial investment will pay off after
2023, when the German consumers will
stop paying the FIT for the oldest (and
most expensive) renewable capacities
installed before 2014)
in 2035 the EEG-surcharge will be a lot
lower than in 2015, but the share in
renewables is doubled (around 60%)
Q5 : Have German
CO2 emissions
increased?
In 2016, greenhouse gas emissions were 27 per cent below
1990 levels. Overall emissions have slightly increased over the
last two years, because of insufficient emission reductions in
the heating, transportation and industrial sectors.
25
Greenhouse gas emissions by sector 1990 - 2016 and climate targets 2020 - 2030
AGEB (2015a), UBA (2015), own calculations * preliminary
1248
1120
1043
1058
1036
1033
1017
992
999
972
974
906
941
922
926
945
902
908
916
750
563
0
200
400
600
800
1000
1200
14001990
1995
2000
2005
2010
2015*
201
6**
2020
2030
Mio
. t C
O2-e
qu
.
Energy industry Housing Transport Industry Agriculture Other
2016: -27%
Target 2020: min. -40%
Target 2030: min. -55%
Coal-fired generation and CO2 emissions in the power sector
have declined for three consecutive years. In 2016 those CO2
emissions are below their 2010 levels but lignite and hard coal
remain major emitters.
326 335 339 339 334 334 340 351330
301315 314 325 331
314 311 306
0
50
100
150
200
250
300
350
400
450
500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015** 2016***
CO
2 e
mis
sio
ns (
Mio
. T
)
Lignite Hard coal Gas Oil Other
-1,6 % compared to 2015
26
CO2 emissions in the power sector by energy source, 2000-2016
UBA 2016a (*preliminary, **Estimate UBA), ***own calculations
-2.8 %
compared to
2010
In order to meet its climate targets, Germany needs to
gradually phase-out coal power.
www.markowski.de
27
Open lignite mine in Nochten, Germany
The Germany’s Climate Action Plan 2050, adopted
in 11.2016 after month of disputes, defines mid-term
CO2 reduction targets in all sectors, including a CO2
reduction in the energy sector of about -60% by 2030
(against 1990’s levels).
Legacy investments in coal plants are stumbling
block to energy transition. The managed retirement
of old, high-carbon, inflexible capacity is prerequisite
for successful shift to a more renewables
Coal phase-out is likely to be an important focus of
German politics after the federal election (Fall
2017). The level of ambition and the pace of the
transformation will depend on the ruling coalitions.
Q6: How has the
German
Energiewende
impacted the
domestic economy?
Since 2008, Germany has spent annually between 2.3% and
2.5% of annual GDP on its power supply. Since 2000, Germany
increased its export surplus by factor four
EWK (2016)
29
Evolution of the expenditure for electricity supply in Germany in
percentage of annual GDP
Destatis (2017)
External trade surplus 2000 - 2016
0
50
100
150
200
250
300
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
bn
€ x5
0
0.5
1
1.5
2
2.5
3
1990 1995 2000 2005 2010 2015
% o
f G
DP
The German renewable energy industry supported 330,000
jobs in 2015. The Energiewende is crowding out investment
and employment from conventional energy sector in favor of
renewable energy sectors
30
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Num
ber
of jo
bs
Wind energy Biomasse Solar energy Hydro Geothermie Public sector
Germany decoupled economic growth from energy
consumption, electricity use falls slightly – yet meeting the
2020 efficiency target increasingly unlikely
31
Gross domestic product, primary energy consumption and electricity production, 1990–2016 (indexed, 1990=100)
AG Energiebilanzen 2016a; Statistisches Bundesamt, own calculations
111
122125
133
146
96 97 98 9590
80
98
105112 112
108101
60
70
80
90
100
110
120
130
140
150
160
1990 1995 2000 2005 2010 2016 2020
199
0=
10
0
Gross domestic product Primary energy consumption Gross electricity consumption
Target 2020:-10 percent vs. 2008
Target 2020:-20 percent vs. 1990
Energy intensive industries are largely exempt from taxes and
levies to safeguard their competitiveness
32
Average end consumer prices for different consumer groups, 2013
BMWi (2014)
Q7: Is the German
Energiewende a
unique case in
Europe?
Wind power and solar PV become key pillars of EU power
systems in the context of the 2030 climate and energy targets
Fraunhofer IWES (2015); National Energy Scenarios; EU 2030 Targets
34
Share of renewables in 2030 European power mix in line with EU
commitments
IEA (2016) adapted from Hirth (2015)
European countries with a share of variable renewables above 10% in 2015
(percentage of annual power consumption)
Seasonal weather patterns match monthly wind and PV
generation yielding a more stable total renewables output
35
Monthly wind power and PV generation in Europe in 2030
Fraunhofer IWES (2015) Weather year 2011
TW
h
Vienna, 22 February 2017 | Christian Redl
As wind power and solar PV are weather-depend generation is
fluctuating and flexibility requirements increase.
Yet, coupling power systems helps
36
Fraunhofer IWES
Vienna, 22 February 2017 | Christian Redl
Q8: Where do we
stand worldwide and
where do we need to
go?
The Paris Agreement fundamentally means that we need to
decarbonize power systems. For a 2-Degree-world, the
solutions are : 1) Phase out unabated coal by 2040 ; 2) Ramp
up efficiency 3) Build lots of renewables
Contribution of energy technology and sector to global cumulative CO2 reductions between a 6 Degrees and a 2 Degrees Scenario
IEA (2015): Energy Technology Perspectives 2015
38
There is wind available all over the world…
39
Average wind speed at 80m
3TIER (2011)
Tunisia
…and almost everywhere there is more sun than in Germany!
40
Global horizontal irradiance
3TIER (2011)
Tunisia
Solar power is gaining speed with the global installation rate
rising rapidly and the costs continuing to decline.
IRENA (2015); Global RES capicities; *own estimation
41
Global Capacity of Solar PV 1990-2014
Fraunhofer ISE (2015): Current and future costs of photovoltaics
The learning curve for PV modules
Renewables are the cheapest power production technology. In 2016,
renewable energy projects set low costs records around the globe
42
United States58,0 €/MWh
United States42,0 €/MWh
Mexico31,7 €/MWh
Peru42,9 €/MWh
Peru33,1 €/MWh
Chile26,0 €/MWh
Brazil43,8 €/MWh
Marocco26,8 €/MWh
South Africa58,0 €/MWh
South Africa45,5 €/MWh
Australia61,6 €/MWh
Germany/
Denmark53,8 €/MWh
India57,7 €/MWh
Jordan54,5 €/MWh
UAE26,7 €/MWh
Netherlands55 €/MWh
Fortum 2016; Sources: announcements by the investing companies and IEA report ”Renewable Energy Medium-Term Market Report 2015” for US, Brazil, South Africa, Australia and Jordan. Values reported in nominal EUR, 1 EUR = 1,12 USD, 1 EUR = 75,3 INR, 1 EUR = 9.48 SEK. United States values
calculated excluding tax credits. Typical contract lengths are 15-25 years. The prices indicate levels with which investors have been willing to invest, however, they may not describe the actual comparable costs as the bid prices may be reduced by preferential land prices, site exploration cost, targeted low-cost
loans etc. The price level at which investors can hedge their renewable production for the next 4 years: average of 2017-2020 electricity (LUL) + elcertificate futures with 29.8.2016 closing prices. This low price levels still result in continuation of investments in onshore wind in Sweden.
Wind
Offshore
Denmark49,9 €/MWh
Wind
Onshore
Solar
Photovoltaics
Thank you for
your attention!
Questions or Comments? Feel free to contact me:
Agora Energiewende is a joint initiative of the Mercator
Foundation and the European Climate Foundation.
Agora Energiewende
Anna-Louisa-Karsch-Str. 2
10178 Berlin
T +49 (0)30 700 1435 - 000
F +49 (0)30 700 1435 - 129
@ [email protected] www.twitter.com/AgoraEW
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