Renewable Energy Policy in Germany

Slide 1: 

Dr. Christine Wörlen May 2009 Renewable Energy Policy in Germany: A FIT Success Story

Overview : 

Overview German Climate Change Policy The German Feed-in-Tariff (FIT) scheme to facilitate investment in renewables Benefits: CO2 emission reduction, jobs, income

Slide 3: 

Emission Reduction Policy in Germany

Germany is concerned about climate change. : 

Germany is concerned about climate change. Germany has always taken a proactive stance on international climate change agreements: Bonn 1995 Commitments of the government Hosting the UNFCCC Secretariat National and EU policies Current commitment: EU: 20 % emissions reductions by 2020; 20 % renewables, 20 % energy efficiency. In case of new climate agreement: 30 % reduction.

German Integrated Energy and Climate Package. : 

German Integrated Energy and Climate Package. Meseberg 2007: 29 measures Emissions Trading and Clean Development Mechanism Support for climate-friendly energy production (renewables, CHP) Energy efficiency measures for residential households Implemented to the largest part over 2008 and 2009

29-Point Integrated Energy and Climate Programme of the German Federal Government 2007. : 

E F F I Z I E N Z E N T S C H E I D E T 29-Point Integrated Energy and Climate Programme of the German Federal Government 2007. 1 Amendment to the Combined Heat and Power Act 2 Amendment to the Energy Sector Act (EnWG) on liberalising metering 3 Low-carbon power plant technologies 4 Smart monitoring of power consumption 5 Clean energy technologies 6 Adoption of a modern energy management system 7 Promotional program for climate protection and energy efficiency (outside of buildings) 8 Energy-efficient products 9 Feed-in law for biogas in the natural gas grid 10 Energy Saving Ordinance 11 Heating costs for rental housing 12 Low-carbon building retrofitting program 13 Energy-efficient modernization of buildings and social infrastructure 14 Renewable Energies Heat Act (EEWärmeG) 15 Efficiency retrofitting program for federal buildings 16 CO2 strategy for passenger cars 17 Biofuels development 18 Reform of the vehicle tax to a pollutant and CO2 basis 19 Energy labeling for passenger cars 29 Amendment to the Heavy Goods Vehicle (HGV) Toll Ordinance 21 Air traffic 22 Water transportation 23 Reduced emissions of fluorinated greenhouse gases 24 Procurement of energy-efficient products and services 25 Energy research and innovation 26 Expansion of electric transport 27 International projects for climate protection and energy efficiency 28 Energy and climate policy information programs for German embassies and consulates 29 Transatlantic climate and technology initiatives

29-Point Integrated Energy and Climate Programme of the German Federal Government 2007. : 

E F F I Z I E N Z E N T S C H E I D E T 29-Point Integrated Energy and Climate Programme of the German Federal Government 2007. 1 Amendment to the Combined Heat and Power Act 2 Amendment to the Energy Sector Act (EnWG) on liberalising metering 3 Low-carbon power plant technologies 4 Smart monitoring of power consumption 5 Clean energy technologies 6 Adoption of a modern energy management system 7 Promotional program for climate protection and energy efficiency (outside of buildings) 8 Energy-efficient products 9 Feed-in law for biogas in the natural gas grid 10 Energy Saving Ordinance 11 Heating costs for rental housing 12 Low-carbon building retrofitting program 13 Energy-efficient modernization of buildings and social infrastructure 14 Renewable Energies Heat Act (EEWärmeG) 15 Efficiency retrofitting program for federal buildings 16 CO2 strategy for passenger cars 17 Biofuels development 18 Reform of the vehicle tax to a pollutant and CO2 basis 19 Energy labeling for passenger cars 29 Amendment to the Heavy Goods Vehicle (HGV) Toll Ordinance 21 Air traffic 22 Water transportation 23 Reduced emissions of fluorinated greenhouse gases 24 Procurement of energy-efficient products and services 25 Energy research and innovation 26 Expansion of electric transport 27 International projects for climate protection and energy efficiency 28 Energy and climate policy information programs for German embassies and consulates 29 Transatlantic climate and technology initiatives

Example: Residential Households. : 

Example: Residential Households. EnEV (Energy Savings Ordinance) Prescribes tolerable energy consumption per square meter Standards became tougher this year (30 %) and will be tightened again in 2012 (30%) Leading to more efficient houses (insulation) EEWärmeG (Renewable Energy Heat Law) In newly built or significantly renovated houses, a share of the heat requirements (heat and hot water) needs to be covered from: Solar thermal water heaters Biomass-based boilers Biogas District heating Marktanreizprogram (investment subsidies)

Integrated Climate and Energy Programme – Summary. : 

Integrated Climate and Energy Programme – Summary. Program of 29 key elements is without precedent both in the history of Germany and internationally Translates into a package of 14 acts and ordinances CO2 emission savings of about 220 million tones in 2020 or 36% vs. 1990 levels Total costs of about 31 billion Euro Annually saved energy costs of about 36 billion Euro Net economic benefit of about 5 billion Euro per year.

Energy Supply Side Objectives. : 

Energy Supply Side Objectives. 20% of final energy consumption to come from renewable energy. 14% of heat demand in Germany to be covered from renewable energy sources. <10 % of fuels to be covered from biofuels. 27 – 30 % of electricity to come from renewables. 25% of electricity to come from CHP in 2020.

Slide 11: 

Renewable Energies in Germany and the FIT

Renewables as share of total final energy consumption in Germany in 2007. : 

Renewables as share of total final energy consumption in Germany in 2007. Source: BMU 2008

Renewable energy shares in Germany, 1998 - 2007. : 

Renewable energy shares in Germany, 1998 - 2007. Source: BMU 2008

Renewable electricity in Germany, 1990 - 2007. : 

Renewable electricity in Germany, 1990 - 2007. Source: BMU 2008

Tariffs : 

Tariffs ..are granted for 20 years …vary by technology …vary by plant (resource quality, plant size, feedstock) …get lower over the years (degression) …negotiated such that at current investment prices some (marginal) profit is attained.

Tariffs under the FIT, 2009. : 

Tariffs under the FIT, 2009. BMU, 2008

Feed-in Tariffs are not just tariffs: : 

Feed-in Tariffs are not just tariffs: German Feed-in Law (EEG) is Purchase price guarantee Grid access guarantee Purchase obligation, priority for feed-in Grid operator buys at predefined rates; National equitization fund Every power customer pays Law is reviewed every four years Federal law Annual degression incentivizes early action

Advantages of Feed-in Tariffs: Simple, stable, fair, effective. : 

Advantages of Feed-in Tariffs: Simple, stable, fair, effective. Industry needs a long-term perspective for large investment and capacity decisions. Operators need clear price signals, non-discriminatory grid access, reward for early action, minimal transaction costs. All of these factors reduce the total cost of deploying renewables through lower risk and lower transaction costs, and maximize deployment activity.

Advantages of Feed-in Tariffs: Simple, stable, fair, effective (II). : 

Advantages of Feed-in Tariffs: Simple, stable, fair, effective (II). Germany has overachieved her renewable energy targets. In 2000, the target for 2010 was 12.5%. This target was actually reached in 2007 with 14.7%. Costs for systems in Germany are lower than in other jurisdictions.

FIT regimes save cost. : 

FIT regimes save cost. Böll 2008

Slide 21: 

Costs and Benefits

RE costs as share of power price : 

RE costs as share of power price

Expected development of the monthly EEG-costs per average household (3500 kWh/year). : 

Expected development of the monthly EEG-costs per average household (3500 kWh/year). Source: BMU 2006 Euro 2005/month

Future costs of wind power. : 

Future costs of wind power.

CO2 avoidance through renewable energy, 2007. : 

CO2 avoidance through renewable energy, 2007. Source: BMU 2008

Income from building renewable energy in Germany, 2007. : 

Income from building renewable energy in Germany, 2007. Source: BMU 2008

Income from renewable energy installations in Germany, 2007. : 

Income from renewable energy installations in Germany, 2007. Source: BMU 2008

Total income from renewable energy in Germany, 2007. : 

Total income from renewable energy in Germany, 2007. Source: BMU 2008

Wind energy suppliers in Germany, 2007. : 

Wind energy suppliers in Germany, 2007. Source: BMU 2008

Total jobs in renewable energy in Germany, 2005 - 2008. : 

Total jobs in renewable energy in Germany, 2005 - 2008. Source: BMU 2009

The solar industry in Germany. : 

The solar industry in Germany. Since 2003, the turnover of the German PV industry has multiplied by a factor of 10 (total €5.5 bn) Of this, 37.6 % were exported. Over 40,000 jobs were created in solar factories and installation businesses. Until 2010, the solar industry association BSW expects around 54,000 jobs, in 2020 maybe twice as many. Preconditions: stable home market, investments into research. BSW Präsentation Marktentwicklung

The solar industry in Germany (II). : 

The solar industry in Germany (II). BSW Präsentation Marktentwicklung

Farm revenues. : 

Farm revenues. BSW Präsentation Marktentwicklung

Sweetwater, TX : 

Sweetwater, TX Nolan County, Texas had 20% of the population living in poverty in 2004. Now 1,100 of the 15,000 residents have jobs directly related to wind energy. Sweetwater area is steadily growing again for the first time in decades. Nolan County‘s property tax base has expanded from $500 m in 1999 to $2.4 bn in 2008. Source: windpowerworks.org 2009

Manufacturing of utility scale wind turbine components in the US in 2008. : 

Manufacturing of utility scale wind turbine components in the US in 2008. 13,000 direct new jobs, nearly $2 bn in investment Towers, components, gearboxes, housings, turbines, blades, materials, lifts… Source AWEA Annual Statistics 2008

Iowa School Districts : 

Iowa School Districts Each school that operates a turbine saves or generates between $3,500 and $560,000 annually. Wind power presents a unique educational opportunity. Forest City Community School District’s turbine annually produces about 60 percent of the district’s electricity consumption. This clean, locally grown power has allowed the district to reduce its carbon dioxide emissions by 657 tons and sulfur dioxide emissions by 2.9 tons annually. Source: Iowa Policy Project 2007 Wind energy became an issue of local pride in each of these school districts.

Danish wind cooperatives : 

Danish wind cooperatives Source: Böll 2009 85% or all wind power capacity is owned by individual or local cooperatives.

What helps develop community wind schemes? : 

What helps develop community wind schemes? Source: windustry 2007

Conclusion : 

Conclusion Germany has very ambitious climate change objectives, and implements the policies to put them into a reality. Energy efficiency and renewable energies will be among the main vehicles. The policies implemented are having multiple benefits: increased energy security decreased GHG emissions, Creation of an industry of global significance, Jobs and national income. Among the social and economic benefits of the FIT is increased resilience against the current global downturn.

Thank you for your attention. : 

Thank you for your attention. Christine Wörlen, Ph.D. Am Weinhang 8 | 10965 Berlin | Germany fon +49 - (0)30 - 7809 787-0 fax +49 - (0)721 - 1513 323 46 mobil +49 - (0)1522 - 1971 234 mail woerlen@arepo-consult.com