Die Energiewende - Consequences of the energy transition on the German electricity market

Transcription

1 Die Energiewende - Consequences of the energy transition on the German electricity market NOG seminar, 3rd November 211, Catrin Jung-Draschli catrin.jung-draschil@vattenfall.de

2 Cornerstones of the energy transition in Germany Closing down of 8 nuclear power plants and the remaining ones with a fixed path until 222 (in 21 23% of electricity production was delivered by nuclear); the nuclear fuel tax stays Keep the target of decreasing CO 2 reduction until 22 with 4% compared to 199 Novellation of Renewable Act (was planned anyway; main changes are higher incentives for offshore, lower for large biomass, cap for photovoltaic subsidies on high level, incentive to opt out of feed-in tariff and take part in wholesale market) The costs for consumers (the EEG-Umlage ) is meant to be kept at 3.5 ct/kwh Energy intensive industry is meant to be protected from price increases Internal grid expansions are meant to be accelerated Operators owning <5% of electricity capacity market share will receive subsidies for new build fossil fired power plants CHP subsidies (support for new build plants) will be prolonged up to 22 Efficiency standards for houses will be increased (no decision yet) It is mentioned that there will be the need for a new market design and more measures to decrease electricity consumption 2

3 Effects - hypothesis CO 2 emissions The decision to close down the German nuclear power plants until 222 compared to the before planned life time extensions translates into ca. 15 TWh less generation from nuclear power plants Comparing both cases and assuming equal production from RES, the NPP production will be replaced by increased production from fossil fired power plants and in neighbouring countries Even considering Renewables build out and assuming increased CO 2 prices, CO 2 emissions in the German electricty sector will not decrease further until 22 Electricity prices Wholesale prices have not reacted significantly as there is no capacity shortage in GER and coupled markets (commodities are rather drivers) BUT: Electricity prices will increase significantly for household customers with increased Renewables costs (independly from nuclear phase out) This is not communicated and discussed today publically 3

4 Comparison of installed nuclear power capacity in Germany before and after Fukushima Pre-Fukushima Post-Fukushima acc. 31st May GW Ca. 15 TWh less production from nuclear power plants 4

5 What is replacing Nuclear generation? Replacements of Nuclear Generation % Replacements of Nuclear Generation % 85 TWh 45 TWh 36% 35% 4% 23% 21% Lignite Hard Coal Gas Net imports * * Net import stands for import/export balance numbers stated are net change in flows not absolute net imports Source: Vattenfall analysis 28% 5

6 Development of CO 2 emissions from German electricity sector after phase out decision (changes in % with basis 21) Overall Germany: ca. -2% Electricity generation: ca % (Source UBA) Target 22: -4% % Source: Vattenfall analysis other gas/oil CCGT Hard coal Lignite 6

7 Renewables development + calculated EEG-Umlage Share in electricity production 5% 4% 3% 2% 1% 3.5 ct/kwh ct/kwh EEG- Umlage costs paid by end customers for RES subsidies % Hydro share Biomass share Wind onshore Wind offshore Solar Share "EEG-Umlage" Source: Vattenfall analysis 7

8 Excursus: Value of Renewables historically Onshore Wind in Germany Solar in Germany Base price ( /MWh) Ave Revenue ( /MWh) Value factor (1) Base price ( /MWh) Ave Revenue ( /MWh) Value factor (1) (Jan-Sep) (Jan-Sep) Average Average Wind earned ca. 1% less than the average electricity price. Solar earned ca. 15% more but decreasing. Source: EEX, Vattenfall analysis 8

9 Excursus: Revenues and Cost for RES in Comparison Even in the most optimistic case we don t see that wind power can be competitive in 22 cost gap will be still /MWh for onshore /MWh for offshore /MWh for solar even at 175 FLH /MWh /MWh Onshore wind 22 GER UK SWE Europe Revenues from spot market Costs Offshore wind 22 Range Base Range Base Source: Vattenfall analysis GER UK SWE Europe Revenues from spot market Costs 9

10 Will residential customers be prepared to pay >25% more for electricity in 22? Electricity prices for residential customers in 22 [ct/kwh] Electricity price % VAT + 14% EEG fee (2.5 > 5.4 ct/kwh) + 6.3% grid fee (BNetzA) % wholesale price increase +27.4% 22: Residential customers electricity prices approx. 3 ct/kwh Redistribution debate between industrial and residential customers Redistribution debate between the poor (tenants) and the rich (homeowners) Sources: Vattenfall analysis, German Grid regulator (BNetzA) 1

11 Conclusions Uncertainties increase where will Europe and Germany be heading concerning Renewables and CO 2 reduction path? Should we believe in a continuous increase of RES shares that need to be subsidised and a steady increase of electricity prices? Will this be done increasingly by using market mechanisms and optimised Europe wide or rather by (national) regulatory tools? What will be the role and incentives for conventional power plants in this market environment? 11