1. “Energiewende” and cost mechanisms Charlotte Loreck Energy and Climate Division Öko-Institut e.V. Berlin for Heinrich Böll Foundation 5 December 2012

2. Agenda German electricity mix Political Targets Price Formation at the Whole Sale Market Historic Prices and Explanation patterns Surcharge for RES Special analysis for future solar costs 2

3. Agenda German electricity mix Political Targets Price Formation at the Whole Sale Market Historic Prices and Explanation patterns Surcharge for RES Special analysis for future solar costs 3

4. 4 Power Plants in Germany Federal Network Agency ca. 96 GW conventional (Aug 2012) ca. 70 GW renewable (Jun 2012) Installed Capacity -> 166 GW Source: Federal Environment Agency

5. 55 Hard coal Natural Gas Nuclear Renewable Gross Electricity Production in Germany Source: AG Energiebilanzen; own figure Oil, Others Lignite 2011: 612,1 TWh Consumption: 605,8 TWh Export: 6,3 TWh 20%

6. 6 Development of renewable capacities in Germany Source: AG EEStat; own figure

7. 7 Development of renewable electricity production in Germany

8. Agenda German electricity mix Political Targets Price Formation at the Whole Sale Market Historic Prices and Explanation patterns Surcharge for RES Special analysis for future solar costs 8

9. 9 Source: http://de.wikiactu.com, own figure Atomic Energy Act 2011 8 out of service 9 operating till 2015 - 2022 2015 2022 2021 2017 2022 2019 2021 2022 2021

10. 10 2020 2030 2040 2050 German targets for electricity gross consumption 80% renewable -10% (compared to 2008) -25% (compared to 2008) 65% 50% 35% Energy Concept of the German Government, Autumn 2010

11. Agenda German electricity mix Political Targets Price Formation at the Whole Sale Market Historic Prices and Explanation patterns Surcharge for RES Special analysis for future solar costs 11

12. Consumer price for electricity Germany 2011 12 Source: Federal Network Agency, own figure

13. Merit order of power plants price

14. 14 Merit order – without nuclear price

15. 15 Merit order – with more RES price

16. Agenda German electricity mix Political Targets Price Formation at the Whole Sale Market Historic Prices and Explanation patterns Surcharge for RES Special analysis for future solar costs 16

17. Historic Prices Base Power: day ahead & Y +1 17

18. Historic Prices (Fuel, CO 2, Base Power ) 18

19. Historic Prices (Base) and Explanation 19

20. Historic Prices (Peak) and Explanation 20

21. Historic Prices (Peak) and Explanation 21

22. Agenda German electricity mix Political Targets Price Formation at the Whole Sale Market Historic Prices and Explanation patterns Surcharge for RES Special analysis for future solar costs 22

23. Consumer price for electricity Germany 2011 23 Source: Federal Network Agency, own figure

24. 24 Renewable Energies Act: guaranteed and priorised feed-in guaranteed payment Feed-in tariff for RES §

25. 25 € MWh demand supply curve of conventional power plants electricity price RES-electricity production guaranteed feed-in tariff proceeds for TSOs of RES-sale differential costs are reallocated to all consumers = RES surcharge RES-costs and whole sale market

26. 26 RES-surcharge: difference 2013 - 2012 Contributions of the most important factors influencing the increase of the German EEG surcharge in 2013 (5,3 ct / kWh) compared to 2012 (3,6 ct / kWh) 1.68 ct/kWh overall Source: Calculations by Oeko-Institut

27. Agenda German electricity mix Political Targets Costs and Price Formation at the Whole Sale Market Surcharge for RES Special analysis for future solar costs 27

28. Decrease of future feed-in tariff for photovoltaics 28 Source: EEG, Calculations by Oeko-Institut

29. 29 Future solar electricity production … in the years 2012 bis 2016 ordered by construction years of plants Source: Calculations by Oeko-Institut

30. 30 Future costs for solar electricity … in the years 2012 bis 2016 ordered by construction years of plants Source: Calculations by Oeko-Institut

31. 31 Future share of RES surcharge for solar electricity … in the years 2012 bis 2016 ordered by construction years of plants Source: Calculations by Oeko-Institut

32. Future price development for consumers? 32 liberalised market more RES „energy only markets“ will not be enough Source: Federal Network Agency, own figure capacity payments?

33. Thank you! www.oeko.de c.loreck@oeko.de 33