Country case study: RES support in Germany Prepared by Jenny Winkler

Transcription

1 Country case study: RES support in Germany Prepared by Jenny Winkler www. erranet.org

2 Agenda 1. Overview of German energy system 2. German support to renewable energy in the electricity system 2

3 The German energy system Pictures; GuentherHH on Flickr and Armin Kübelbeck, CC-BY-SA, 3 Wikimedia Commons

4 Quick facts on Germany Population: mio. EU member since 1958 Topography: Climate: Domestic fossil resources: lignite and hard coal Renewable resources: biomass, hydro, solar, wind 4

5 Economic growth, power&energy consumption, GHG emissions Source: clean energy wire based on BMWi 2018, UBA

6 German energy sources share in primary energy consumption ( ) Source: clean energy wire based AG Energiebilanzen

7 Net power consumption by consumer group ( ) Source: Clean energy wire based on BDEW

8 Renewables in Germany Pictures; GuentherHH on Flickr and Armin Kübelbeck, CC-BY-SA, 8 Wikimedia Commons

9 Development of renewable shares in electricity, transport and heating Source: UBA

10 Obejectives of RES-E support in Germany Technological development Cost control System and market integration 10

11 Historical development of RES-E support Electricity Feed-in Act (1991) Connection requirement Priority dispatch 20 year feed-in tariff (coupled to electricity prices) The first green electricity feed-in lay in the world! Renewable Energy Sources Act (2000) Fixed feed-in tariffs Degression of feed-in tariffs for each new annual cohort Financing through levy on electricity retail prices (no state aid) 2003: Introduction of exemptions for industrial electricity users 2003: Increased PV FIT from 2004 to compensate for end of low interest loans under rooftop program 11

12 Historical development of RES-E support Renewable Energy Sources Act (2004) Adaption of FIT for PV, biomass and offshore wind Increase of industry exemptions (consumption > 10 GWh/a, share of electricity costs relative to gross value >15%), railways exempted First set of RES targets: 12.5% of electricity in 2010, at least 20% in 2020 Renewable Energy Sources Act (2009) Increased targets: 35% by 2020, 50% by 2030, 65% by 2040, and 80% by 2050 Higher degression for PV (8 10%), flexible degression cap Self-consumption incentive (higher FIT for self-consumed electricity) Wind onshore initial tariff and repowering bonus increased, system service bonus Increased offshore wind tariffs, early starter bonus for operation before 2015 Increased biomass support, technology-specific bonus, compliance with sustainability criteria Increased tariffs for hydro and geothermal plants (and early starter bonus) Green power privilege: exemption for electricity suppliers with certain share of RES KfW low interest rate loans 12

13 Historical development of RES-E support Renewable Energy Sources Act (2004) Adaption of FIT for PV, biomass and offshore wind Increase of industry exemptions (consumption > 10 GWh/a, share of electricity costs relative to gross value >15%), railways exempted First set of RES targets: 12.5% of electricity in 2010, at least 20% in 2020 Renewable Energy Sources Act (2009) Increased targets: 35% by 2020, 50% by 2030, 65% by 2040, and 80% by 2050 Higher degression for PV (8 10%), flexible degression cap Self-consumption incentive (higher FIT for self-consumed electricity) Wind onshore initial tariff and repowering bonus increased, system service bonus Increased offshore wind tariffs, early starter bonus for operation before 2015 Increased biomass support, technology-specific bonus, compliance with sustainability criteria Increased tariffs for hydro and geothermal plants (and early starter bonus) Green power privilege: exemption for electricity suppliers with certain share of RES KfW low interest rate loans 13

14 GW c/kwh Historical development of RES-E support PV Act (2010) Drastic reduction of PV tariffs Prohibition of agricultural land to be used for PV plants PV Interim Act (2011) Possibility of further adjustments for PV tariffs during the year PC installed capacity EEG levy Source: Own figure based on date from BMWi Source: Fraunhofer ISE

15 Historical development of RES-E support Renewable Energy Sources Act (2012) Market premium scheme introduced: sliding premium on renewables Fixed FIT Total revenue (hourly) Market price Sliding FIP Support level Fixed FIP Total revenue (monthly average) 15

16 Historical development of RES-E support Renewable Energy Sources Act (2012) Market premium scheme introduced: sliding premium on renewables FIT fixed FIP sliding FIP Investment grant + minimum risk to bidder; government spendings are predictable incentive to react to market signals; government spendings are predictable incentive to react to market signals; low risk to bidders incentive to react to market signals; government spendings are predictable - no incentive to react to market signals bidder bears risk of electricity price development; Winner s Curse more likely government spending less predictable undesired incentives for plant design and operation; bidder bears risk of electricity price developments; Winner s Curse more likely 16

17 Historical development of RES-E support Renewable Energy Sources Act (2012) Optional market premium scheme introduced: sliding premium on renewables Measures for the grid integration of photovoltaic systems: Limit of feed-in of photovoltaics in times of grid overload, with compensation Retrofitting of photovoltaic systems to avoid the 50.2 Hz problem System services bonus for onshore wind extended Exemption of electricity storage from grid charges and investment support Extension of industry privileges (consumption > 1 GWh/a, share of electricity costs relative to gross value >14%) Adaptation green power privilege: Reduction of EEG levy by 2 c/kwh Minimum share of 20% of fluctuating sources EEG classified as state aid regarding industry and green power privileges 17

18 Historical development of RES-E support PV Act (2013) Further drastic reduction of PV tariffs New size categories Size limit of 10 MWp for free-standing PV Hard cap on the total photovoltaic capacity was introduced at 52 GW p Renewable Energy Sources Act (2014) Extension targets: 2025: 40-45%, 2035: 55-60%, 2050: >80% Obligatory market premium for plants 100 kw Monthly degression for PV Start of pilot auctions for free-standing PV Renewable Energy Sources Act (2017) Introduction of auctions for determining support levels for most technologies (PV, wind onshore, wind offshore, biomass) 18

19 RES-E market integration EEG until 2009 EEG 2012/ 2014 EEG 2014/

20 Auctions for RES-E support Strongly recommended by EU legislation Used in an increasing number of countries Decrease of support levels resulting from introduction of auctions in many countries But: DESIGN MATTERS! 20

21 Auctions for RES-E support Strongly recommended by EU legislation Used in an increasing number of countries Decrease of support levels resulting from introduction of auctions in many countries Auction award prices PV, Source: IRENA (2017), Renewable Energy Auctions: Analysing But: DESIGN MATTERS! 21

22 Auctions for RES-E support The level of competition must be sufficiently high Risks need to be minimized Realisation of plants needs to be assured Support tool for auction design: Sources: own elaboration, IEA ETP

23 Auctions for RES-E support examples Offshore wind auction, Anholt (2009/10) High delay penalties Strict schedule Opportunities abroad Only one bid submitted Onshore wind and biomass auction (2016) Uniform pricing No auction schedule Many project in the pipeline Winners get zero support 23

24 Auctions for RES-E support examples AER III auction, mainly onshore wind (1997/98) No pre-qualification on planning permissions Difficulties obtaining permission Low realisation rates Solar PV, kw (2012) Unclear prequalification requirements Inexperienced bidders Only 60% of the bids eligible 24

25 Auctions for RES-E support in Germany PV auctions used as pilot (but: results not necessarily transferable) Auctions were introduced for the following technologies: PV (domestic, international) Wind onshore PV and wind onshore combined (pilot) Wind offshore Biomass (new and existing plants) Auction rules are documented in a number of auction regulations Auctions conducted by Bundesnetzagentur 25

26 Auctions for RES-E support - PV Plant size Plant specification Financial prequalification Material prequalification - Participation fee Realization period and penalties Auction frequency From 750 kwp; maximum plant size: 10 MWp free-standing or rooftop; restrictions for free-field regarding area type (exemptions by federal states) 5 /kwp as guarantee or cash at time of bidding 45 /kwp as guarantee or cash 10 days after bid acceptance (20 /kwp if legally binding land-use plan is submitted) 586 (1/4 paid back if bid is not successful) 18 months; 24 months with a 0.3 c/kwh reduction of support level 3 times per year Auction volume 2015: 500MW, 2016: 410MW; 2017: 600MW, 600 MW planned according to EEG 2017 (- volume accepted in other PV auctions (international or technology-neutral); + volume not allocated or not realised in previous year) Returning and trading of auction success Decision rule Pricing rule Support rights can be used by the auction participants for other projects with a 0.3 c/kwh reduction of support level Price; if prices are equal, smaller project is accepted first; overall accepted volume auctioned volume if bid volume>auctioned volume Pay-as-bid (in pilot phase uniform pricing was also tested) Additional requirements Self-consumption not allowed 26

27 Auctions for RES-E support PV results Ceiling price not binding High level of competition Real. Rate 99.4% 89.9% 92.0% 99.9% So far high realization rates Substantial reduction of support costs over time 27

28 Auctions for RES-E support Wind onshore Plant size Financial prequalification Material prequalification Participation fee 522 Realization period and penalties Auction frequency Auction volume Returning and trading of support rights Decision rule Pricing rule Special regulation for countrywide wind generation Special regulation to balance differences in resource quality From 750 kwp 30 /kwp as guarantee or cash at time of bidding License (BImSch-Genehmigung) 3 weeks before auction date 24 months; 26 months with a penalty of 10 /kw; 28 months with a penalty of 20 /kw 3-4 times per year, schedule published on BNetzA website MW/year (-volume awarded in international and technology-neutral auctions; -volume pilot wind plants) No trading possible In the first rounds, EC were Price; if prices are equal, smaller project is accepted first; overall accepted allowed to volume participate auctioned volume if bid volume>auctioned volume without a license and had Pay-as-bid, uniform pricing for energy communities a 48 months realization time. Bids from the grid extension area (Northern Germany) are accepted only until a predefined national After bid selection, support levels are adopted depending on the resource quality at each awarded location 28

29 Auctions for RES-E support Wind onshore results Ceiling price not binding High but decreasing leve of competition No clear price reduction trend 29

30 Onshore wind auctions Results Energy communities: In the first rounds, EC were allowed to participate without a license and had a 48 months realization time. As a consequence, almost all awarded bids were from ECs. Competition between current and future turbines. Big projecting companies used EC definition (10 citizens of the location involved). Changes to regulation: now uniform pricing only. Development of support levels: No clear downward trend. Levels similar to those assuming further regular degression. 30

31 Auctions for RES-E support Wind offshore Special situation in Germany Many plants with permits and grid connection confirmation but delays in realisation Decision for Single Item Auction for offshore wind Transition phase: Two auctions for projects with permits Auctioned capacity below permitted capacity Results: April 2017 April 2018 Maximum awarded price 6 c/kwh 9,83 c/kwh Minimum awarded price 0 c/kwh 0 c/kwh Volume awarded 1490 MW 1610 MW Potential reasons for zero bids: Relatively low financial prequalication of 100 /kw Expected increase in wholesale electricity prices Expected decrease in technology and other costs High degree of competition and sunk costs 31

32 Auctions for RES-E support in Germany Open auction with Denmark Technology Financial prequalification PV 70 /kwp Realization period and penalties 24 months; 26 months with a penalty of 10 /kw; 28 months with a penalty of 20 /kw Auction frequency Auction volume Pricing rule Bid volume Ceiling price Awarded bids 3-4 times per year, schedule published on BNetzA website 50 MW Uniform pricing 17 offers with 154 MW from Denmark 26 offers with 143 MW from Germany c/kwh 5 10MW projects from Denmark, support level 5,38 c/kwh Possible reasons for the unexpected outcome: Better resources in Denmark (higher full load hours and less restrictions regarding area cahracteristics) Better chances for German PV plants to succeed in following auctions 32

33 Auctions for RES-E support in Germany Technology-neutral (onshore & PV) Technology Plant size PV & onshore wind From 750 kwp, PV maximum capacity 20 MW Prequalification BImschG for wind plants, Realization period and penalties Auction frequency As in technology-specific auctions 2 times per year between 2018 and 2020, each time 200 MW Auction volume 200 MW, ~56MW in Northern Germany (Auction April 2018) Pricing rule Pay-as-bid Bid volume Ceiling price Awarded bids 8,84 c/kwh Only PV Possible reasons for the unexpected outcome: Higher competition on PV auctions? Unknown regulatory advantages for PV? Lower costs of PV plants? 33

34 THANK YOU FOR YOUR ATTENTION! W Web: