Cross-Border Cost Reductions from PV Capacity in Germany

Transcription

1 Cross-Border Cost Reductions from PV Capacity in Germany Felix Müsgens Presentation at the 35 th USAEE/IAEE NORTH AMERICAN CONFERENCE Houston, November 14 th, 2017

2 German Energy Transition Similar to many other countries worldwide, Germany wants to decarbonize its economy. Within this context, there exist specific targets for the share of renewable energies of gross electricity consumption, e.g. 40 to 45% in Germany Started the promotion of renewable energy relatively early Set relatively ambitious targets E.g. in 2000 the first version of the RES-promotion act was enacted, RES-Share was 3.4%. Now (at the end of 2016) around 30%. BTU Chair of Energy Economics 2

3 Annual Capacity Additions MW Annual Photovoltaics Capacity Additions GER All other countries BTU Chair of Energy Economics 3

4 German Share in Annual Capacity Additions % Annual Photovoltaics Capacity Additions % GER All other countries 100% 80% 60% 40% 20% 0% BTU Chair of Energy Economics 4

5 RES-Share in % RES-Net-Subsidy in bn Status-Quo: Renewable Energy Shares and Net- Subsidies in Germany BTU Chair of Energy Economics Source: AGEB 0 Source: Bundesregierung 5

6 RES-Net-Subsidy in bn 2011 Total Net Costs for German Renewable Energy Sources installed before 31/12/2011 The German EEG (RES-Act) specified that all RES installations receive feed-in tariffs for 20 years (plus year of installation). Below are estimates for the future cost burden for all RES plants built before the end of 2011 (again, only net costs are shown, market value for electricity has been subtracted): Total aggregated payment: bn Costs for all installations built 2012ff + Costs for grid extension + Costs for additional flexibility + Geothermal Biomass Water Others Photovoltaics Wind Offshore Wind Onshore BTU Chair of Energy Economics 6

7 Benefits of RES-Promotion Low carbon technology Correction of R&D externalities (i.e. market participants invest too little in renewables for fear of other companies copying advances) Correction of other negative externalities related to fossil fuels Particulate matters (respirable dust) NO x, SO 2, Green Growth Jobs in economically weak regions (North and East Germany) Know-How for Exports Reduction of fossil fuel imports Making green technologies available for worldwide expansion These advantages have often been discussed but rarely quantified. BTU Chair of Energy Economics 7

8 Specific Investment Costs /kwp Specific Investment Costs USD/kWp Worldwide Reduction Investment Costs for Photovoltaics, Examples Germany and US Germany USA PV-System Prices PV-Modul Prices $ $ $ $ $ $2.000 $ Source: BSW (2015), Frauenhofer ISE (2015) Source: Barbose, G. and Darghouth, N. (2016) BTU Chair of Energy Economics 8

9 Learning Cost reductions are assumed to correlate with output (due to learning) Rubin et al. even argue: [ ] by far the most common model used in the energy literature to forecast changes in technology cost is the one-factor learning curve (or experience curve ). Hence, we assume the following: Cost reductions can be exclusively attributed to installed capacity Every MW of installed capacity (in a year) contributes symmetrically to cost reduction (in that year) Based on these assumptions we can quantify: What was the German contribution to the cost reduction in investment costs for photovoltaics? BTU Chair of Energy Economics 9

10 Annual Capacity Additions MW Annual Photovoltaics Capacity Additions % GER All other countries 100% 80% 60% 40% 20% 0% BTU Chair of Energy Economics 10

11 Specific Investment Costs USD/kWp Cost Reduction USA USD/kWp Worldwide Reduction Investment Costs for Photovoltaics, Examples Germany and US $ USA Reduction in Specific Investment Costs $ $ $ $4.000 $2.000 $ Source: Barbose, G. and Darghouth, N. (2016) BTU Chair of Energy Economics 11

12 Cost Reduction USD/kWp Results German share 2009: 46% % German Contribution All Other Countries PV prices BTU Chair of Energy Economics 12

13 Work in Progress One global market? If so, what is the price for PV US-prices? (assumed in this presentation) Chinese prices? One factor learning model? How could it be extended? R&D expenditures? Data? Other? Use empirical data on costs directly or use learning rates from the literature? BTU Chair of Energy Economics 13

14 Thank you for your attention! Brandenburg Technical University Prof. Dr. Felix Müsgens Faculty 3 Chair of Energy Economics BTU Chair of Energy Economics 14

15 References BSW (2015): Photovoltaik-Preismonitor Deutschland, Bundesverband Solarwirtschaft e.v. (BSW-Solar), 2015 DOE (2015, ed.): 2014 Wind Technologies Market Report Frauenhofer ISE (2015): Photovoltaics Report, Fraunhofer Institute for Solar Energy Systems, ISE Rubin, E., Azevedo, I., Jaramillo, P. and Yeh, S. (2015): A review of learning rates for electricity supply technologies, Energy Policy, 86, pp BTU Chair of Energy Economics 15