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]

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

Documents

german energiewende

sebastian bolay

european implications

german electricity production

german nuclear capacity

german phenomenon slide

nuclear power plants

europe climate