German BioEnergy Association (BBE)

Transcription

1 German BioEnergy Association (BBE) Bioenergy in Germany: Markets and perspectives June 22 nd, 2010, Des Moines, USA Thomas Siegmund German BioEnergy Association (BBE)

2 German BioEnergy Association (BBE) The German BioEnergy Association BBE is the umbrella association of the German bioenergy market and was founded in 1998 to bundle the different sectors and initiatives of the bioenergy market to speak with one voice. Members: 25 specialised associations 140 companies 8 universities and R&D institutions

3 Bioenergy in Germany: Markets and perspectives Structure German RES targets and the status quo Market development and political driving forces of the bio-electricity sector - Biogas - Biomass Market development and political driving forces of the bio-heat sector Market development and political driving forces of the biofuel sector Conclusion

4 German RES targets and the status quo National targets of the EU RES Directive United Kingdom Sweden Finland The Slovak Republic Slovenia Romania Portugal Poland Austria The Netherlands Malta Hungary Luxembourg Lithuania Latvia Cyprus Italy France Spain Greece Ireland Estonia Germany Denmark The Czech Republic Bulgaria Belgium 18 % RES final energy 2005 RES final energy 2020

5 Bioenergy in Germany: Markets and perspectives German RES targets and the status quo Targets of German Government 30 % RES Electricity in % RES in Transport in % RES Heat in 2020 } 18 % Final energy demand 8 % bio-electricity 9-10 % predominantly biofuels 10 % heating and cooling with biomass } 11 % Final energy demand

6 German RES targets and the status quo RES share on final energy demand 2009 [%] 0,2 0,8 0,5 1,6 89,4 10,6 7,5 non-res RES Bioenergy Wind Solar Hydro other RES Source: BMU

7 German RES targets and the status quo RES market share on final energy 2009 RES Heat 9,6 % RES Transport Fuels 5,4 % RES Electricity 16,1 % ,7 % [TWh] other RES Bioenergy ,4 % 5,2 % 0 91 % Bioenergy 100 % Bioenergy 32 % Bioenergy Source: BEE

8 German RES targets and the status quo Development of total turnover, bioenergy (investment + operation) 12, , , ,7 % 6, , , ,4 % 5,2 % Source: BMU

9 Bioenergy in Germany: Markets and perspectives Structure German RES targets and the status quo Market development and political driving forces of the bio-electricity sector - Biogas - Biomass Market development and political driving forces of the bio-heat sector Market development and political driving forces of the biofuel sector Conclusion

10 Market development bio-electricity Bio-electricity generation in Germany, [TWh] 35,00 30,00 EEG 2000 EEG 2004 EEG ,70 30,10 25,00 23,80 [TWh] 20,00 15,00 14,10 18,00 10,00 5,00 0,00 1,42 1, ,54 1,57 1,87 2, ,20 2,48 2,80 3, ,13 5,07 6,42 6,90 9, Source: BEE

11 Market development bio-electricity support schemes Strong political framework conditions as market driver - Higher E-production costs - Higher entrepreneural risk - Payment period long enough to incite investments? Planning security EEG - Access to market necessary - Avoidance of blockades Level of Remuneration Guaranteed grid access Sufficient? - Cost based? - Market based? Differentiated by - Technology? - Capacity? - Feedstock?... Purchase obligation - Guaranteed market - Prioritized RES-E transmission? - Fair cost allocation to grid operators?

12 Market development bio-electricity support schemes The Renewable Energy Source Act (EEG) Planning security: EEG obligates electricity grid operators to purchase RES electricity, to integrate RES with priority into the e-grid and to pay a minimum remuneration rates for it for a 20-year period The remuneration fees for newly installed power plants are lowered by 1% each year to foster technology development and cost degression Technology differentiated support for all RES enables early development of future RES technologies (learning curves, economies of scale etc.) EEG remuneration is allocated to all consumers (~4 EUR/month), hence polluter pays principle fulfilled while acceptance grows due to low costs EEG is evaluated and amended regularly to react to market developments

13 Bioenergy in Germany: Markets and perspectives Market development bio-electricity support schemes The Renewable Energy Source Act (EEG) Overview EEG 2000: 13 articles ( ) regulating all RES electricity Capacity <= 500 kw <= 5MW <= 20 MW Fee for bioenergy 10,23 Cent 9,21 Cent 8,7 Cent

14 Market development bio-electricity support schemes The Renewable Energy Source Act (EEG) Overview EEG 2009: 66 articles ( ) regulating all RES electricity Remuneration system biogas <=150 kw <=500 kw <= 5 MW <= 20 MW Basic compensation Cent 9.18 Cent 8.25 Cent 7,83 Cent Clean air bonus Old plants 1.0 Cent 1.0 Cent New plants 1.0 Cent 1.0 Cent Energy crop bonus 7 Cent 7 Cent 4 Cent 2,5 Cent (Wood) Rural conservation bonus 2 Cent 2 Cent - Manure-bonus 4 Cent 1 Cent - - Technology bonus (without Gasinjection) 2 Cent 2 Cent 2 Cent 2 Cent Bonus for Gasinjection New plants 1/2 Cent - Old plants 2 Cent - CHP-bonus 3 Cent 3 Cent 3 Cent 3 Cent

15 Market development bio-electricity - BIOGAS Development of installed biogas plants and capacity in Germany Number of plants Biogas plants Capacity Installed capacity [MW] Source: German Biogas Association

16 Market development bio-electricity - BIOGAS Biogas electricity, feedstock and CO 2 -mitigation 11,3 X 10 Mio. t CO ,9 10,1 biowastes 14% [TWh] X agricultural & industrial residues 6% = X X energy crops 26% manure 54% Source:

17 Market development bio-electricity - BIOGAS Expected biogas trends in Germany Higher remuneration and manure bonus within EEG incites great increase of small biogas plants on local sites using liquid manure as feedstock Much wider use of heat through various concepts: - direct local heat use (buildings, green houses, cattle sheds etc.) - heat injection into public DH system - micro gas distribution to satellite CHP (less expensive, lower loss of energy, 30% funding of investment costs) - Heat storage - Organic-Rankine-Cycle (ORC) Source: German Biogas Association

18 Market development bio-electricity - BIOGAS Excellent perspectives for biogas: bio-electricity No targets for single technologies defined yet, but expected within nreap 2010 Biogas will play a key role in heat, electricity and mobility markets Estimated biogas potential with today s technology: bn m³ German Biogas Association expects for 2020: ~ 31,2 TWh electricity generation with biogas ~ MW installed capacity ~ biogas plants ~ 6-8 bn EUR cumulated investment costs Source: German Biogas Association

19 Market development bio-electricity - BIOGAS Excellent perspectives for biogas: biomethane injection Government aims to inject 10 bn m³ biogas (= 6 bn m³ biomethane) into the natural gas grid until 2020 (but voluntary, not binding) So far 35 biogas injection plants in operation (18 are being build at the moment, 17 are in planning process) To inject 6 bn m³ biomethane in 2020, approx to new biogas plants ranging from 4-6 MW th will be needed = 120 new plants annually Estimated investments: bn EUR, necessary farm land: 1,2 m ha Voluntary agreement: to double efficiency of total biogas value added chain (compared with 2000) to double the biogas yields per hectare, resp. to halve the necessary farm land to reach political aims Beneath CHP future market potential as transport fuel and in the heating sector

20 Market development bio-electricity - BIOMASS Development biomass CHP and structure biomass plants Capacity number of plants installed capacity [MW] % 1% 39 plants 102 plants Source: > 5 MWel 0,5-5 MWel 0,5 MWel 68 plants 80%

21 Market development bio-electricity - BIOMASS Material flows in relation to plant size (2008) 0,5 MWel 0,5-5 MWel > 5 MWel % of plants <0,5 MWel % of plants 0,5-5 MWel % of plants >5 MWel Waste Wood Forest Wood / landscape management Mix 0 Waste Wood Mix 0 Waste Wood Forest Wood / landscape management Mix Source:

22 Bioenergy in Germany: Markets and perspectives Structure German RES targets and the status quo Market development and political driving forces of the bio-electricity sector - Biogas - Biomass Market development and political driving forces of the bio-heat sector Market development and political driving forces of the biofuel sector Conclusion

23 Market development bio-heat Structure of RES heat supply 2009 [110,5 TWh in total] 52% solid biomass (household solid biomass (industry) solid biomass (DH) liquid biofuels gaseous biofuels 5% 4% 5% 13% biowaste solarthermal energy geothermal energy 9% 7% 5% Source: BMU

24 Market development bio-heat Biomass use for heat ( ) [GWh] Source: BMU

25 Bioenergy in Germany: Markets and perspectives Market development bio-heat Wood pellet market 2009 at a glance heat market shares 40 % on final energy consumption, heat in households even 90 % installed wood pellet units in 2009: , trend to larger systems (> 50 kw) branch target: +30 % annual growth of sold units to systems in wood pellet production sites, usually with tons capacity 2,5 m tons pellet production capacity in 2009 (0,39 m tons in 2005!) 1,6 m tons pellet production in 2009 (+7 % to 2008), 1,1 m tons sold domestically 28% of produced pellets were exported (40% in 2008)

26 Market development bio-heat support schemes Relevant support schemes for bioheat in Germany Renewable Energy Heat Act (EEWärmeG) RES heat obligation for new buildings Market Incentive Program (MAP) Investment subsidies Renewable Energies Source Act (EEG) incentive for CHP for biopower plants Ordinance on natural gas grid access (GasNZV + GasNEV + ARegV ) Removal of barriers for biogas feeding Joint Task for improvement of agrarian structures and coast protection (GAK) support of grids for district heating or biogas in the frame of rural development

27 Market development bio-heat support schemes Renewable Energy Heat Act (EEWärmeG) As of 1 January 2009 owners of new buildings > 50 m² will be obliged to provide a minimum share of their heat demand with RES: - min. 15% with solar energy or - min. 30% with biogas district heating if provided by a CHP plant or - min. 50% with liquid biofuels when sustainability is certified or - min. 50% with biomass in high efficient systems or - min. 50% with heat pumps Requirements for bioenergy: > 50 % boiler efficiency for biomass, biogas only if used in CHP plant, liquid biofuels only in modern systems and certified sustainable produced fuels, operation of bioenergy systems has to be proved annually by bill of fuel supplier over a period of 15 years

28 Bioenergy in Germany: Markets and perspectives Market development bio-heat support schemes The Market Incentive Program (MAP) MAP supports bioheat with investment subsidies, long-term and lowinterest loans and/or partial release of depth. Total budget in 2009: 400 million In 2008 budget was 236 million initiating investments worth of 1,6 billion in total; since MAP s start in 2000 subsidies amounting to 912 million have been granted initializing total investments of 7,7 billion

29 Bioenergy in Germany: Markets and perspectives Market development bio-heat support schemes The Market Incentive Program (MAP) by KfW RES heat systems > 100 kw th are supported by KfW since September 2008 with low interest loans and up to 30 % repayment grant of investment costs: - Biomass heating- and biomass CHP plants - district heating grids and heat storages - plants to uprade biogas to natural gas quality - biogas grids ( micro grid ) - other RES (geothermal systems (thermal and CHP), large solar collectors > 40 m² (hot water, heating backup, process heat, solar cooling)

30 Bioenergy in Germany: Markets and perspectives Structure German RES targets and the status quo Market development and political driving forces of the bio-electricity sector - Biogas - Biomass Market development and political driving forces of the bio-heat sector Market development and political driving forces of the biofuel sector Conclusion

31 Market development biofuels support schemes and legal frame Energy Tax Law and Biofuels Quota Act Since 2007: 2 way strategy: - Energy Tax Law with decreasing tax exemptions for B100 and PPO Pure Bioethanol (E70 E90) exempted from energy tax until Biofuels Quota Act with rising obligation for diesel and petrol fuel to blend biofuels (fully taxed: (45 ct/l Biodiesel, 65 ct/l Bioethanol). Biofuel quota since 2009: 6,25% (cal.) by with subquotas: - 4,4% (cal.) diesel (~ 2,1 m tons biodiesel) - 2,8% (cal.) petrol (~ 1,1 m tons bioethanol) - 3% (vol.) HVO from 2010 (~ 0,5 m tons HVO) Compliance with fuel standards DIN EN 14214, DIN EN 15376, DIN V and with Sustainable Biomass Ordinance.

32 Market development biofuels - BIODIESEL Biodiesel production costs (Jan Jun 2009) Integrated plants not integrated Feedstock costs: 69,4 ct/l 54,7 ct/l Proceeds by-products: -24,8 ct/l -1,9 ct/l Production costs: 21,4 ct/l 11,78 ct/l Logistic: 3,5 ct/l 2,6 ct/l Extraordinary expenditures: 8,0 ct/l 8,0 ct/l Energy Tax: 18,41 ct/l 18,41 ct/l Sum: 95,91 ct/l 93,59 ct/l Fossil diesel: 85,48 ct/l 85,48 ct/l Balance: - 10,43 ct/l - 8,11 ct/l Source: Deutscher Bundestag

33 Market development biofuels - BIODIESEL Development B100-taxation (ct/l) ,20 45,03 45, , ,50 18, ,90 9,00 9, tax increase as of 2007 tax increase as of 2010

34 Market development biofuels Development biofuel quota 9,00% 8,00% 7,00% 6,00% 6,25% 6,75% 6,25% 7% 6,25% 7,25% 6,25% 7,50% 6,25% 7,75% 6,25% 8% GHGmitigation quota 5,00% 5,25% 4,00% 3,00% 2,00% 1,00% 0,00% biofuel quota as of 2007 biofuel quota as of June 2009

35 Market development biofuels Market development biofuels market volume blends ,8 % 3,4 % 5,25 % 6,25 % [1.000 t] Bioethanol HVO Biodiesel Difference Source: UFOP

36 Market development biofuels - BIOETHANOL Bioethanol production in DE [kt] E70 - E80 ETBE Ethanol blend Sales 2009 Source: BDB e

37 Market development biofuels - BIODIESEL Market development biodiesel DE 3,5 3,26 3 2,5 2,87 0,93 1,42 2,81 2,53 [million tons] 2 1,5 1,64 2,28 1 1,94 1,84 0,5 1,17 0 0, B100 Biodiesel blend Source: VDB

38 Market development biofuels Market development biofuels 12,00% 10,00% 1% 8,00% 6,00% 6,30% 7,20% 5,90% 5,40%? 4,00% 3,80% 9% 2,00% 0,00% 0,40% 0,60% 0,90% 1,40% 1,80% Biofuels other RES estimated Source: VDB

39 Market development biofuels Decarbonization Strategy From 2015 biofuels for transport are no longer supported by volume but by GHG-mitigation potential: 3 % GHG-reduction in 2015 rising to 7 % in 2020 Biofuels Quota GHG-Quota > 2015 Net mitigation rate Resulting biofuels blended Year cal. % % % cal. % , ,25 5, ,25 6, ,5 60 7, Assumption: Rising GHG-mitigation contribution of biofuels from 50 % in 2015 (required by EU Directive) to 70 % in 2020

40 Market development biofuels Sustainability Criteria for transport biofuels Biofuels need to guarantee sustainability criteria by certificate from 2011: - Minimum GHG-savings of 35% until 2017, of 50% by 2017 (60% for new production plants in 2018) compared to fossil fuels - no energy crops from areas with a high biodiversity value in January 2005 (natural forest, grassland ) - no energy crops from areas with high carbon stock (peat land ) - energy crops in EU only if Cross Compliance regulations are met 2 certification schemes and 11 audit companies accredited so far, but units to be audited now to guarantee sustainable biomass for autumn s biofuel production => shortage of certified biomass / biofuels???

41 Bioenergy in Germany: Markets and perspectives Structure German RES targets and the status quo Market development and political driving forces of the bio-electricity sector - Biogas - Biomass Market development and political driving forces of the bio-heat sector Market development and political driving forces of the biofuel sector Conclusion

42 Conclusion Perspectives Development of German bioenergy market will grow steadily Estimation BBE: 15% on final energy consumption in 2020 With right political support, up to - 39bn Euro are expected to be invested, leading to - 100,000 new jobs to 200,000 bioenergy jobs in total until 2020 BBE Recommendations - Electricity: continuity and regular adaption of EEG to market needs - Heat: more reliable and budget neutral support scheme - Transportation: revitalization of pure biofuel market

43 Bioenergy in Germany: Markets and perspectives Conclusion Final remarks German market will remain an attractive market and offers excellent investment opportunities Long-lasting market experiences, detailed know-how and lessons-learned make German technology providers to valuable partners for co-operation on global markets

44 German BioEnergy Association (BBE) Thank you for your attention German BioEnergy Association (BBE) Thomas Siegmund Godesberger Allee Bonn Tel.: +49.(0) Fax: +49.(0) Skype: thomas.siegmund