Energy Reform in Germany: Progress or Stagnation?

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1 Energy Reform in Germany: Progress or Stagnation? 2019 NARUC Winter Policy Summit, February 10, Washington DC Jens Acker Counselor Energy, Trade, Digital Economy Embassy of the Federal Republic of Germany

2 Germany s position in the energy system in Europe Electrical neighbours Germany at a glance Population: 82 million Largest economy in Europe, 4th largest in the world, GDPgrowth 2,2% (2016), 1,5% (2017) Gross electricity consumption 2018: ca. 600 TWh (flat) Primary energy consumption 2018: PJ (2016: PJ) 2/11/ Source: BMWi, 2015, AGEB 2017, Statista 2017

3 Source: Ecofys 2018 based on BMWi 2016, UBA 2018, AGEB 2018 The Energiewende is Germany s long-term energy and climate strategy Achieved Climate % greenhouse gas reduction (vs. 1990) 27.6% 31,7% (2016) (2018) to to Renewable Energy % gross electricity consumption % gross final energy consumption 38,2% 36% (2018) 14.8% (2016) to to Primary energy consumption (vs. 2008) -6.0% -6% Energy Efficiency Final energy productivity (vs. 2008) Primary energy demand in buildings (vs. 2008) 1.1% p.a. (2016) -15.9% -18.3% (2015) (2016) 4,380 PJ (2008) +2.1% p.a. ( ) Final energy consumption in transport (vs. 2005) +1.3% +4.2% (2015) (2016) to to -20 2/11/2019 3

4 Source: UBA 2017, BMU 2018 MtCO 2 eq Much progress but more action needed to achieve a 40% reduction by 2020 and a 55% by Kyoto target (1st com period) 1200 other emissions households transportation commerce, trade, services industry agriculture energy industry * preliminary data 2/11/2019 4

5 Source: Ecofys 2018 based on AGEB 2017 Wind, solar PV and biomass have driven the growth of renewables in German primary energy consumption gas: 22.5% hard coal: 14.2% 2007 total: 14,197 PJ other - electr. trade balance: lignite: 0.6% 11.4% nuclear: 10.8% RES: 7.9% hydro: 0.5% wind: 1% biomass: 4.1% gas: 23.7% 2017 total: 13,525 PJ (2018: 12,900 PJ) hard coal: 11% lignite: 11.2% other: 1.7% nuclear: 6.1% RES: 13.1% electric trade balance: -1.4% hydro: 0.5% wind: 2.8 % solar: 1.3 % Biomass (incl. biofuels): 7.1% oil: 32.6% waste: 0.9% bio fuels: 1.1% other RES: 0.2% solar: 0.1% oil: 34.6% waste: 1.0% other RES: 0.4% 2/11/2019 5

6 gross electricity consumption in TWh Source: Ecofys 2018 based on BMWi 2018, AGEB 2018, UBA 2018 GER renewables share reached 36,2% in 2017, a record of 38,2% in 2018, goal or 2030: 65% Electricity consumption in fossil fuels; 63,8% RES; 36,2% gas: 12% wind; 17,7% biomass, geothermal*; 8,6% solar; 6,6% hydro; 3,3% *Share of geothermal (0,03%) RES: renewable energy sources renewables fossil fuels 2/11/2019 6

7 Source: Ecofys 2018 based on AGEE-Stat 2018, BNetzA 2016, BSW Solar 2017, Deutsche Windguard 2017 Wind and solar capacities are steadily growing 2018: 45,700 MW 2011: 25,916 MW 2018: 53,00 MW 2011: 28,524 MW 2018: 6,500 MW 2011: 188 MW Number of installations in 2016: 1,690,374 Number of installations in 2016: 29,900 Number of installations in 2016: 1,238 2/11/2019 7

8 Source: Ecofys based on BMWi 2016 and EEG 2017 Specific capacity addition targets make deployment of renewables more plannable Annual capacity addition targets per technology in MW onshore wind (auction) offshore wind* (auction) solar PV (auction) solar PV (other**) biomass (auction) *500 MW to be added annually in 2021 and 2022 (not in 2020) **EEG 2017 sets out 2500 MW of annual brutto capacity expansion. 600 MW are allocated via auctions, 1900 MW via administrative FIT/FIP 2/11/2019 8

9 Plans for a Coal Phase-out until 2038 government s high level advisory board has proposed (Feb. 1): phase out of coal fired power generation (now: 42,6 GW) until end of 2038, possibly until 2035 (until 2022: - 12 GW; 2023 to 2030: - 13,1 GW, rest thereafter), monitoring 2023, 2029, 2032) compensation for utilities; subsidies for conversion to gas. structural aid for affected regions, job training, etc. some estimate cost of 100 bln (app. $ 88 bln.) over 20 years. CO2 emissions in power sector go down from 350 to below 183 Mio. t by 2030 Government is now to consider the proposal and to put forward draft law in /11/2019 9

10 BACK-UP 2/11/

11 Emissions in million tonnes CO 2 equivalents Source: BMUB 2017 The Climate Action Plan 2050 defines Germany s first sectoral emission targets for 2030 Total emission target 2030: < 562 million tonnes of CO 2 equivalent 2/11/

12 Source: Ecofys based on Stiftung Offshore Windenergie 2018, AGEB 2017, EEG 2017 Offshore wind capacities in the North and Baltic Seas continue to expand German territory and EEZ Construction zone 12 sea mile border/eez Completely feeding-in Partially feeding-in Construction in progress FID Port service Port components Port base Contract awarded Offshore Wind Figures for Germany In operation ( ) 5,387 MW Electricity generation in 2017* 17.9 TWh Targets GW GW 2/11/ *Vorläufige Angabe