Future role of renewable energy in Germany against the background of climate change mitigation and liberalisation Dipl.-Ing. Uwe Remme Institute of Energy Economics and the Rational Use of Energy (IER) University Stuttgart www.ier.uni-stuttgart.de International Energy Workshop 24 June, Paris
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Future role of renewable energy in Germany against the background of climate change mitigation and liberalisation Dipl.-Ing. Uwe Remme Institute of Energy.
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Future role of renewable energy in Germany against the background of climate change mitigation and liberalisation
Dipl.-Ing. Uwe Remme
Institute of Energy Economics and the Rational Use of Energy (IER) University Stuttgart
www.ier.uni-stuttgart.de
International Energy Workshop
24 June, Paris
Overview
• Renewables in Germany
• Methodology
• Scenario analysis and variations focussing on the electricity sector
Gas supply sector Hydrogen supply sector Petroleum sector GE-zertificate price
Decomposition of electricity price for a coal power plant
- 3 5
- 2 5
- 1 5
- 5
5
1 5
2 5
3 5
4 5
5 5
2020
2025
2030
2035
2040
2045
2050
2020
2025
2030
2035
2040
2045
2050
2020
2025
2030
2035
2040
2045
2050
2020
2025
2030
2035
2040
2045
2050
G r e e n c e r t i f i c a t e c o s t s O p p o r t u n i t y c o s t s c a p a c i t y G H G p e r m i t c o s t s C r e d i t s y s t e m s t a b i l i t y
M i s s i n g c o s t c o v e r a g e V a r i a b l e o p e r a r t i n g c o s t s E l e c t r i c i t y p r i c e
- 4
- 2
0
2
4
6
8
1 0
2020
2025
2030
2035
2040
2045
2050
2020
2025
2030
2035
2040
2045
2050
2020
2025
2030
2035
2040
2045
2050
2020
2025
2030
2035
2040
2045
2050
0
1
2
3
4
5
6
2020
2025
2030
2035
2040
2045
2050
2020
2025
2030
2035
2040
2045
2050
2020
2025
2030
2035
2040
2045
2050
2020
2025
2030
2035
2040
2045
Reference scenario
GE scenario
GHG scenario
Winterday Winternight Summerday Summernight
Cen
t/kW
hC
ent/
kWh
Cen
t/kW
h
Supply curve for green electricity in 2050
Green electricity certificate price [Cent/kWh]
0 10 20 30 40 50 60 70 80 90100110
Ren
ewab
le electricity production [TWh]
0
100
200
300
400
500
600
Photovoltaics Wind onshore Biogas Energy crops Straw
Wood Geothemal Energy
Wind offshore
530
2040
5060
70
80 85 87
Renewable Quota[%]
0
100
200
300
400
500
600
700
5 15 25 35 45 55 65 75 85
Renewable Quota [%]
GHG emissions [M
io. t CO2 *]
0
50
100
150
200
250
300
Price
[Cent/kW
h]
GHG emissions El. Price
GHG permit price
Renewable electricity vs. emission permit price in 2050
GHG emission permit price [€/t CO2*]
0 500 1000 1500 2000
Ren
ewab
le e
lect
rici
ty p
rod
uct
ion
[T
Wh
]
0
100
200
300
400
500
Photovoltaics Wind offshore Wind onshore
Biogas Energy crops Straw
Wood Geothermal energy
GHG emission permit price [€/t CO2*]
0 200 400 600 800 1000 1200 1400 1600
GH
G e
mis
sio
ns
[Mio
. t C
O2*
]
0
100
200
300
400
500
600
700
GH
G r
edu
ctio
n r
el. t
o 1
990
[%]
40
50
60
70
80
90
100
TransportDomestic, CommercialIndustryConversion
60 70 75 80 85
GHG reduction [%]
GHG emission permit price [€/t CO2*]
0 500 1000 1500 2000
Ren
ewab
le e
lect
rici
ty p
rod
uct
ion
[T
Wh
]
0
100
200
300
400
500
Photovoltaics Wind offshore Wind onshore
Biogas Energy crops Straw
Wood Geothermal energy
GHG emission permit price [€/t CO2*]
0 200 400 600 800 1000 1200 1400 1600
GH
G e
mis
sio
ns
[Mio
. t C
O2*
]
0
100
200
300
400
500
600
700
GH
G r
edu
ctio
n r
el. t
o 1
990
[%]
40
50
60
70
80
90
100
TransportDomestic, CommercialIndustryConversion
60 70 75 80 85
GHG reduction [%]
Variation of GHG reduction target and renewable quota (2050)48 % Reduction 59 % Reduction 80 % Reduction
GE-Quota [%] GE-Quota [%] GE-Quota [%]
Net
tost
rom
erze
ug
un
g [
TW
h]
Lignite Hard coal Natural gas Biomass Wind
Hydro PV Hydrogen Geothermal Net generation
Net
ele
ctri
city
gen
erat
ion
[T
Wh
]
Variation of GHG reduction target and renewable quota (2050)
0
10
20
30
40
50
60
70
80
90
100
110
20 25 30 35 40 45 50
GE-Quote [%]
GH
G E
mis
sio
n p
erm
it p
rice
[€/
t]
Reduction 67 %
51 %48 %
55 %
59 %
61 %
45 %42 %
39 %
Variation of gas/oil price and renewable quota (2050)
Lignite Hard coal Natural gas Biomass WindHydro Hyrogen Geothermal PV
Net
ele
ctri
city
gen
erat
ion
[T
Wh
]
Discounted system costs in the variations
Variation of GHG target and GE quota Variation of GHG target and gas/oil price
140140140120 120 120 120100 100 100 100
80808080
60 6060
6040 40
40
40
40
20
20
20
0
GE-Quota [%]
20 25 30 35 40 45 50
GH
G r
educ
tion
[%]
20
30
40
50
60
70
80500
400
400
300
300
300
300
200
200
200
200
100
100
100
1000
0
0
0
-100
Gas/Oil price change [%]
-20 0 20 40 60 80
GH
G r
educ
tion
[%]
20
30
40
50
60
70
80
[Billion €00 discounted to 1998]
Conclusions• Without policy instruments (i.e. subsidies) or without a climate change abatement
policy an increase in renewable electricity generation is not competitive under current framework conditions
• Climate change abatement policy:
- Up to a reduction target of 50 % gas becomes the major fuel
- Hydro, geothermal energy, biomass and wind are cost-effective mitigation options (among others) when the reduction target becomes higher than ca. 50 %
- Critical issue: assumption on conventional electricity net import of zero
• Green electricity quota:
- Renewable electricity generation displaces mainly fossil generation by gas and hard coal
- Part of the GHG reduction is due to electricity saving measures in the end-use sectors because of the higher electricity prices
• Variation of GHG target, green electricity quota and gas price:
- The green electricity quota reduces the GHG permit price at the cost of the electricity consumers
- For high reduction targets renewable electricity generation is independent from a quota
- Increase in gas price does not favour renewable electricity generation but hard coal and lignite with a compensation for the increased emissions in other sectors