Renewable Energy Development in Germany (Status and Outlook) Rainer Hinrichs-Rahlwes, Board Member BEE - German Renewable Energy Federation Berlin, 3 rd of December 2012

BEE - the German Renewable Energy Federation is the umbrella organization of renewable energy in Germany, with 25 member associations and organizations representing 30,000 members, including 5,000 enterprises. Our target: 100 % of renewable energy.

3 Provide significant contribution to Security of Energy Supply  Wide range of RE technologies are proven and mature  A mix of different technologies and resources is available Renewables reduce Dependency on Energy Imports  RES are domestic energy sources Renewables mitigate the risks of Price Volatility of Fossil Fuels  Wind, solar and geothermal energy are free  RE-technologies have high cost decreases Renewables are reliable technologies against Climate Change  RES are (nearly) carbon free or carbon neutral Renewable Energies – mature and beneficial

4 GHG-Reduction from Renewables in Germany (2011)

5 Further increasing, problems for PV manufacturers Industry: > 500,000 jobs in 2020

6 2011: 36 billion Euro Turnover from RES RES investment predominantly for electricity plus 13.1 for O&M

7 Energy prices do not tell the truth  New technologies were always heavily subsidised  Globally, fossil & nuclear receive 6 times the subsidies of RE  Grid costs are not properly attributed to fossil & nuclear energy Most externalities are not included in energy prices  Impact of fossil on environment, health, society not included  Nuclear risks (incl. Waste!) are largely borne by public money  No realistic price of carbon (despite ETS) There are various competitive disadvantages for Renewables  Still: Costs for Renewables are decreasing rapidly  Wind is already competitive (even in disturbed markets)  Solar PV is reaching grid parity AND: Costs for fossil & nuclear are increasing Are Renewables expensive?

Avoided Fossil Fuel Imports due to Renewable Energy billion Euro Forecast electricity heating transport Source:

9 price marginal generation cost Electricity produced RE substitute most expensive power plant RE lower electricity prices Public benefit: Merit order effect

10  High (upfront) capital costs but close to zero operating costs (Wind, PV...)  Distributed production and consumption: different grid structure  Flexible system needed: smart grids, system services, storage....  For development and deployment of a broad range of renewable Need to bridge the gap between today’s and tomorrow’s energy remove remaining economic and administrative barriers, compensate for structural and competitive disadvantages accelerate market penetration and up-scaling of various RE, foster technology development and increased deployment, trigger economies of scale and resulting cost reduction. Different cost structure of RE and the need for support

Increase of EEG surcharge Development of EEG surcharge and of increasing factors Real support costs Costs of market premium Compensation for last year Industry privilege Liquidity reserve Reduction stock market price

Real costs of EEG are lower Compensation % Real support costs 11% Reduction stock market price 21% Industry privilege 16% Market premium 5% Liquidity reserve 7% Percentages of Increase from 2012 to 2013

Distribution of pure EEG costs among the different technologies

The German Government’s Energy Concept 2010: Targets Greenhouse Gas Reduction: minus 40% by 2020, 55% by 2030, 70% by 2040, 80-95% by 2050 (compared to 1990 levels) Share of Renewable Energy in Gross Final Energy Consumption: 18% by 2020, 30% by 2030, 45% by 2040, 60% by 2050 Share of Renewables in Electricity Consumption: 35% by 2020, 50% by 2030, 65% by 2040, 80% by 2050 After Fukushima – complete Phase-out of Nuclear Energy by 2022

Renewables Support: The German Policy Mix Electricity  Main tool: Renewable Energy Law – EEG – (since 2000 [1991] ): - Priority grid access and dispatch for RE - Fixed feed-in tariffs, guaranteed for 20 years - Differentiation according to technology, size and [only wind] site - Annual degression and regular revision Heating  Market Incentive Programme – MAP - - Investment support - cheap loans for larger installations  For new buildings: Renewable Heating Law (since 2009) Transport- Tax exemption for biodiesel (since 1992) and all biofuels (2004) - Since August 2006: increasing taxation on biofuels  Main instrument since 2007: quota obligation, including E10

The Renewable Energy Act – EEG – Priority grid access for Renewables installations Each kWh must be purchased and remunerated by the utility / grid operator (with defined exceptions) Fixed feed-in tariff paid for 20 years Annual (monthly for PV) degression for new installations (a fixed percentage or a defined mechanism) Differentiated support according to technology, size and site quality Costs are passed on to all electricity consumers (specific exceptions for energy intensive industry) Regular evaluation and amendments - EEG - Utility / TSO Electricity consumer RES-E Producer + FIT surcharge Electricity rates renewable electricity Feed-in tariff Provides for grid access, sets FIT conventional electricity Regulation / Law Money Power

Renewable Energy installations owned by citizens

Renewables in Germany (2011)

19 RE for Transport in Germany Significant growth 2004 – 2007 / stagnation since then New and focused policies needed

20 RE Heating & Cooling in Germany 2011: 10.4% RES Stable Framework missing  Future growth uncertain

21 Solar Thermal Heating in Germany

22 Geothermal Heat in Germany

23 RE Electricity in Germany 2011: 20% 2012 >25% Strong growth due to Feed-in tariffs

24 Electricity from Wind in Germany

25 Installed Windpower in Germany

26 PV Capacity and Yield in Germany 2012 – more than 30,000 MW p

27 Biomass for Electricity in Germany

Paradigm-Shift: From traditional baseload power …. Simulation 2007: 15 % RE (hourly resolution)

… towards a smart Mix with very high shares of Renewable Energy Peaks at noon Strong and weak wind periods Storage, Import/Export Variable Load  System-Transformation: technically & economically  BEE-Scenario 2020: 47 % RE (hourly resolution)

Thank you for your attention! BEE - German Renewable Energy Federation Reinhardtstraße Berlin Fon  0 Fax  20