Latest Developments & Incentives in the German Energy Market

Transcription

1 Chris Schmidt - istockphoto Latest Developments & Incentives in the German Energy Market Smart German Energy Market Seminar: Business Opportunities for Smart Energy Solutions April 2013, Tobias Rothacher

2 Agenda I. Renewables in Germany: Historic development and status quo II. Effects on Energy markets: Future changes & needs III.New Incentives and Business Opportunities

3 The German Energy Concept: Goals Main Objectives: Climate protection measures CO2 cuts vs % -80% Renewable share of Total energy consumption 18% 60% Electricity consumption 35% 80% Heat generation 14% 60% Energy efficiency measures Increase in energy productiveness 2.1% p.a. Reduction of energy consumption -50% (2050 vs. 2008) Reduction of electricity consumption -25% (2050 vs. 2008) Renovation rate 2% p.a. Reduction of energy for transportation -40% (2050 vs. 2005)

4 The German Energy Concept: Strategies The German renewable energy strategy consist of four incentive pillars: Renewable Energy Sources Act (EEG) Objective: renewable energies should represent 35% of the total power production in Germany by Conducive feed-in tariffs are the main legal instrument used to promote renewable energies. Renewable Energy Heat Act (EEWärmeG) Objective: 14% of heat produced by renewable energies by Obligation to integrate heat production from renewable sources in new construction or CHP as a substitute. Added bonuses for innovative technologies and CHP. Cogeneration Act (KWK) Objective: 25% of electricity produced by cogeneration by Cogeneration bonuses and subsidies of up to 750 million per year from Biofuels Quota Act (BioKraftQuG) Fixed blending mandates for biofuels: From 6.6% in 2006, the government currently aims 12.0% by 2020 Fuel tax exemption for special biofuels (2 nd gen.)

5 Electricity generation [GWh] The German Energy Concept: Results The EEG was the main driver for the growth of renewable electricity, which had a 23% share of German electricity consumption in 2012 Development of electricity generation from renewable energy sources in Germany StrEG: January 1991 March 2000 Amendment to BauGB: November 1997 EEG: April 2000 EEG: August 2004 EEG: January 2009 EEG: June 2011 EEG: Jan Hydropower Windenergy Biomass * Photovoltaics * Solid, liquid, gaseous biomass, biogenic share of waste, landfill and sewage gas; Electricity from geothermal energy is not presented due to the negligible quantities of electricity produced; StrEG: Act on the Sale of Electricity to the grid; BauGB: Construction Code; EEG: Renewable Energy Sources Act; Source: BMU-KI III 1 according to Working Group on Renewable Energies-Statistics (AGEE-Stat);

6 The German Energy Concept: Outlook Governemntal targets for renewables share in the German electricity mix: 35% by 2020; 80% by 2050 strong increase of fluctuating sources Structure of Electricity Production from Renewable Energies in Germany ) of renewable energies Prognosis of yearly installed offshore capacity (in GW) 1) Biogas 15,00% Biomass 12,00% Others 0,57% Waste 4,43% TOTAL: 135 GWh Wind Energy 33,00% Prognosis of Electricity Production (in TWh/a) from Wind in Germany 2) Hydro Power 15,00% Photovoltaics 20,00% 0 Hydro Power Wind - Offshore Biomass Wind - Onshore PV Geothermal Sources : 1) BDEW 2013; 2) BMU

7 Agenda I. Renewables in Germany: Historic development and status quo II. Effects on Energy markets: Future changes & needs III.New Incentives and Business Opportunities

8 The German PV Market reached Grid-Parity in 2011 PV electricity costs now well below end-consumer electricity retail prices! Own-consumption of PV energy is a natural market driver for storage!! * Model calculation for rooftop systems >30 kwp, <100 kwp; based on 802 kwh/kwp (Frankfurt/Main), 100% financing, 6% interest rate, 20 year term, 2% p.a. O&M costs Sources: Feed-in Tariffs: BMU 2012; System Prices: BSW 2012; System Price Forecast: EPIA 2011; Model Calculation: Deutsche Bank 2010; Electricity Prices : Eurostat 2012 [Private households with annual consumption >2500 kwh, <5000 kwh]; Electricity Price Forecast : Prognos 2012 [Price Forecast 2016: 28,20 ct./kwh]

9 14% of total electricity demand for own-consumption 76 TWh out of 542 TWh total German electricity demand could be met by selfproduced PV power ( equals about 80 GWp of installed PV capacity): TWh Residential: 29% Total: 140 TWh PV Potential: 41 TWh Family Homes Apartments 3,6 37,4 Commercial: 18% Total: 133 TWh PV Potential: 24 TWh Retail Office buildings 7,8 6,2 Agricultural Public buildings Potential ownconsumption with PV Hotels,restaurants,etc Construction Total electricity demand in the sector Producing Companies Other 3,4 Industrial: 4% Total: 251 TWh PV Potential: 10 TWh Mechanical engineering Food/beverages 2,2 1,8 Automotive 1,3 Plastics Energy intensive Other 4,8 Source: UBS

10 The future of electricity generation in Germany Punctual overcapacities in electricity production through fluctuating RES Increasing volatility of electricity prices! Business case for ~27 GWp installed PV capacity (30 Jun 52 GWp expected PV capacity by 2015 / Electricity production June 30th, 2012 [MWh] * :00 4:00 8:00 12:00 16:00 20:00 Non-Fluctuating Wind Solar *Source: EEX 2012 ( :00 4:00 8:00 12:00 16:00 20: :00 4:00 8:00 12:00 16:00 20:

11 The electricity grid in Germany: Bottlenecks ahead! New power structure in 2022 will lead to bottlenecks in Germany Offshore- Wind parks Power balance 2012 Power balance Source: Netzentwicklungsplan

12 Agenda I. Renewables in Germany: Historic development and status quo II. Effects on Energy markets: Future changes & needs III.New Incentives and Business Opportunities

13 Own-Consumption driving storage and smart homes First Home Energy Storage and Home Energy Management systems are currently installed in Germany Source: Solarworld,

14 Revenue ( million) Units (million) Expected Smart Meter Roll-Out in Germany Smart meter unit and revenue forecast Germany: Revenues ( Mio.) Units Revenues ( Mio.) Units 0,01 0,02 0,1 0,14 0,2 0,3 1,5 4 5,2 8, Expected market growth: CAGR of 71.7% from Source: Frost & Sullivan

15 Germany is Europe s largest market for HEMS Own-consumption and demand-side management as future drivers Smart Home Market Europe (EUR million) Smart Home Market Europe, Austria 4% Norway 5% Spain 5% Rest of Europe 14% Germany 48% 200 Switzerl. 6% UK 8% France 10% Source: Zarpathy, Z. (2012): Smart Building & Home Technology Market Trends

16 Batteries: PV own-consumption drives the market Lead Acid already cost competitive; Enormous cost reduction potential for Li-ion will bring down storage costs 80,00% 70,00% 60,00% 50,00% 40,00% 30,00% 20,00% 10,00% 0,00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec More than 43 GWp of unsusidized solar to be installed until 2020 Own-consumption w/o battery is about 30% of annual consumption Double own-consumption to 60% with a 2 kwh battery system PV PV with battery IRRs of unsubsidized solar systems in Southern Germany Costs of Li-ion battery packs in different applications (EUR/kWh) 10,00% ,00% 6,00% ,00% 2,00% ,00% PV systems E-vehicles Consumer electronics PV w/o battery PV with battery Source: UBS AG,

17 Planned incentives for PV Battery systems Originally scheduled for May 2013 pending final approval OpEx incentive CapEx incentive KfW program with interest-reduced loans For PV systems up to 30 kwp For batteries providing min. 7 years present value guarantee Battery management system must have open interface for external control Max. PV output at grid-connection point must be reduced by 40% Conditions: Up to 100% of net investment 5/10/20 year loan with 1/2/3 years of free redemption Fixed interest rates Application through client s house bank Cash incentive on purchase price To be cleared with KfW program loan reduction Calculation scheme: Cost of Battery [EUR] X 0.3 X PV capacity PV capacity [PV-kWp] Max.: 600 EUR/PV-kWp Example for a 5 kwp PV system: 5000 Costs of Battery [EUR] Cash incentive [EUR]

18 Energy in TWh Power in GW --- Demand for storage of surplus energy Surplus starts at 40-50% fluctuating renewable share Renew. Share: 43% 68% 88% Balancing Hours Days Weeks Months Years hours2 days2 weeks2 month2 years Source: Gerhardt IWES 2011, ZSW

19 Hydrogen for large-scale storage of surplus energy Hydrogen / Power-to-gas will be needed for energy capacity > 10GWh Segmentation of large-scale (electrical) storage Battery storage applications are limited in the hour range Energy storage > 100 MW can only be addressed by Pumped Hydro, Compressed Air (CAES), and Hydrogen The potential to extend pumped hydro capacities is very limited CAES has limitations in operational flexibility and capacity Source: Siemens

20 Power-to-gas as surplus energy storage Input: H 2 O, CO 2 and surplus electricity from renewables Output: CH 4 for electricity, heat and mobility Water Gas grid Electricity Electrolyzer Hydrogen Heat Renewable Energies Catalyzer Mobility Source: DVGW e.v

21 Market potential for Energy Storage in Germany Ambitious growth targets for RE: what does this mean for energy storage? RE-share Required compensation capacity (GW) TWh of energy required Today 17% n.a. (30%) ca % ca >35% ca PV - Own Consumption State of the art % of the overall generated PV power is used for own-consumption 2025: 20% of PV generated power for own-consumption (35% in 2040). Balancing Power Required Balancing Power of ~7.4 GW In 2025 the demand for Balancing Power increases by 50% to 2010 and by 70% in Surplus energy Storage demand for a surplus of 150 GWh (2011) Storage necessity 2025: 3.5 TWh 2040: 40 TWh Expected: Investment of billion in storage capacity until 2030 Sources: DB Research 2012, BCG 2011, DENA Netzstudie II 2011, BAFA 2011, Amprion

22 Germany Trade & Invest Renewable Energy and Resources Division: Europe Berlin - Headquarters Mr. Thomas Grigoleit Director Renewable Energies & Resources T thomas.grigoleit@gtai.com Mr. Heiko Staubitz Senior Manager Energy Storage / Smart Grid T heiko.staubitz@gtai.com Mr. Tobias Rothacher Senior Manager Photovoltaics and Bioenergy T tobias.rothacher@gtai.com Mrs. Mandy Ouw Manager Photovoltaics T Mandy.Ouw@gtai.com Ms. Esther Frey Manager Wind T esther.frey@gtai.com Ms. Anne Bräutigam Manager Wind T anne.brautigam@gtai.com Mr. Jonas Rabe Manager Wind T jonas.rabe@gtai.com Ms. Flérida Regueira Cortizo Senior Manager Environmental Technologies T flerida.regueira@gtai.com North America New York Office San Francisco Office Mr. Claus Habermeier Director New York, USA T: F: claus.habermeier@gtai.com Ms. Angelika Geiger Director San Francisco, USA T: F: angelika.geiger@gtai.com Asia-Pacific Beijing Office Tokyo Office Mumbai Office Mr. Markus Hempel China Representative Beijing, China T F markus.hempel@gtai.com Mr. Iwami Asakawa Japan Representative Tokyo, Japan T F iwami.asakawa@gtai.com Ms. Asha-Maria Sharma India Representative Mumbai, India T asha-maria.sharma@gtai.com 2012 Germany Trade & Invest All information provided by Germany Trade & Invest has been put together with the utmost care. However, we assume no liability for the accuracy of the information provided