The German Energiewende : Shining or Warning Example for Europe?

Transcription

1 The German Energiewende : Shining or Warning Example for Europe? 5 th Conference ELECPOR November 1, 2013 Thomas Barth, CEO and Chairman of the Managing Board, E.ON Energie AG 1

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3 March 2011: Impact of Fukushima 3

4 What are the elements of the German Energiewende? 1 2 Low-carbon economy by 2050: (CO ² emissions to be reduced by 85-90% compared to 1990) Economy build on RES (80% power generation from RES in 2050, fossil only back-up) 3 Expedited nuclear phase-out (till early 20s) 4 Load destruction and efficiency gains The project is based on the assumption that a highly industrialized society can be securely and competitively supplied by a generation system based predominantly on RES. 4

5 RES capacity (in MW)* w/o hydro Installed and guaranteed capacity from onshore wind/pv at the end of 2012 in MW Wind PV - - < Other Total * Source: BMWi 5

6 In the context of heavy load destruction, RES will become the dominant energy source Electricity Generation mix in TWh % % % 1) RES becoming the dominant energy source (~ 55%) 2) Overall load destruction through assumed efficiency gains PV Wind Other RES Fossil Nuclear Pump Storage 6 Source: Prognos, EWI, GWS 2011

7 In addition, installed RES capacity will explode while running hours of conventional back-up will steeply decline Installed Generation capacity in GW ,7 189, ,1 6 23,9 10,6 33,3 43,1 26% 50% 43,4 52,5 58% ,7 13,6 79,4 14,7 71,7 Current peak demand GW ,4 4,3 7,5 7,7 7, PV Wind Other RES Fossil Nuclear Pump storage 7 Source: Prognos, EWI, GWS 2011

8 Four phenomena show that the current market set-up is clearly off-balance and far from meeting the ambitions of the Energiewende CO ² emissions are up, because falling wholesale prices squeeze out efficient new gas power plants and favor old coal and lignite Costs for end-consumers are up and continue to grow, which causes a debate around burden sharing with industrial customers that pay only a fraction of grid and RES subsidies (price for 2014: ~30,0 ct/kwh, thereof 6 ct for RES subsidies only) Grid operators need to step-in more often to ensure grid stability (~ 1200 interventions in 2012 only) Competitiveness and investability of European utilities are at stake 8

9 CO ² emissions are up Current market set-up Due to massive RES priority feed-in, wholesale electricity prices at the German power exchange are falling (last year s estimate for 2014 power price at 48 /MWh, today s estimate at 37 /MWh) Load destruction and margin destruction: highly efficient gas power plants are squeezed out of the market in favor of old coal and lignite Sources of power generation in Germany in 2012 (in percent) Other (+/- 0%) RES (+ 1,8%) 4,2 Lignite (+ 1,0%) 25,7 22,1 Oil (+ 0,4%) 1,5 Gas (- 2,3%) 11,3 19,1 Coal (+ 0,6%) 16,1 Nuclear (- 1,6%) CO ² emissions due to power generation (in mio. t.) * 2012** 9 Source: AG Energiebilanzen; (Figures in brackets: comparison to 2011) Source: German Federal Environment Agency; * Preliminary, ** First estimate

10 because falling wholesale prices squeeze out efficient new gas power plants in favor of old coal and lignite Example: Electricity generation at E.ON s Irsching Gas power plant (2011 vs. 2012, in MWh) Irsching squeezed out of the market June 2011 July 2011 August June 2012 July 2012 August 2012 Source: 10

11 Costs for end-consumers are up and cause a public debate around burden-sharing, while industrial customers only pay a fraction of the subsidies Current market set-up Must run for RES and feed-in guarantee for producers Producers compensated via a contribution added to the general electricity bill for endconsumers (households, SMEs, industrial customers) Energy-intensive industries can be exempted from RES contribution Average household electricity price (in ct/kwh, yearly consumption of kwh) 35,0 30,0 25,0 20,0 15,0 10,0 5,0 0,0 13,9 23,7 2,1 3,5 3,6 28,5 ~30,0 5,2 6,0 RES share of household prices up at 5,2 ct/kwh (2013), 6,0 ct/kwh for ,6 11 RES contribution Other Source: BDEW, 2014 figures: price from 2013 plus RES estimates from BDEW for 2014 RES for large IC s (> 1 GWh): 10% of household RES share

12 Electricity bills for households Average monthly electricity bill of a three-person household in Euros yearly consumption kwh Changes versus ,90 48,21 40,66 41,77 12,25 14,38 15,52 16,74 46,99 18,70 50,14 52,39 54,43 56,76 20,24 20,74 21,70 22,58 60,20 24,65 63,15 67,70 69,10 25,26 26,52 28,59 73,59 75,51 83,80 33,34 34,18 42, % % 37,65 33,83 25,14 25,03 28,29 29,90 31,65 32,73 34,18 35,55 37,89 41,18 40,51 40,25 41,33 41, % Generation, transport and sales Source: BDEW, as of: 04/2013 Taxes, charges and levies (German Renewables Energies Act (EEG), Combined Heat and Power Generation Act, levy based on 19, electricity tax, concession fee, VAT) 12

13 Electricity price: Taxes and levies Electricity prices: levies in Bn. (without VAT*) 0,44 0,15 0,26 6,17 23,59 20,36 8,5 9,5 0,45 13,35 14,11 6,53 6,60 6,46 6,27 6,35 6,26 6,28 6,9 0,79 0,70 0,52 0,63 4,32 5,10 4,1 8,33 3,36 0,28 0,26 0,90 1,15 1,63 1,91 2,30 2,92 3,73 4,30 4,88 5,27 0,61 0,99 0,67 0,76 0,77 0,85 2,3 1,82 2,00 2,00 2,05 2,04 2,08 2,15 2,22 2,07 2,09 2,14 2,17 2,16 2,11 2,15 2,15 2,15 2,15 11,4 11,9 12,3 12,9 13,5 13,8 14,3 17,1 22,9 7,25 23,9 6,97 31,6 7,00 0,85 0,81 0,41 rd ** 2013** 2014** Konzessionsabgabe EEG-Umlage*** KWK-Aufschlag 19-Umlage Offshore-Haftungsumlage**** AbschaltVO Stromsteuer***** * Mehrwertsteuerbelastung 2013 rd. 7,5 Mrd. Euro ** teilweise vorläufig oder Schätzung *** bis 2009 Mehrkosten gegenüber Börsenpreis; ab 2010 Anwendung AusglMech; 2012/2013 gemäß EEG-Umlagenprognose **** 2013: Schätzung ***** 2012/13: gemäß AK Steuerschätzung des BMF, Mai 2013 Source: BDEW, as of: , KWK-Aufschlag 2014 noch nicht bekannt 7,00 0,046 0,9 0,59 <1,00 13

14 Wind and solar feed-in have strong impact on load curve so that grid operators need to step-in more often to ensure grid stability Increasing volatility of German load curve Interventions to stabilize the grid by grid operator Tennet, Source: E.ON Global Commodities SE Source: Tennet 14

15 Political discussion in Germany Main forward-pressing issues in Germany are: - Price increase of electricity tariffs - Network expansion - New system for renewables - Capacity mechanism Due to the election in September 2013 nothing will be implemented in Germany until

16 We need four cornerstones to get the system back on track turn the Energiewende upside down 1 Reform of the RES Introduction of a capacity mechanism 2 RES to take responsibility for the whole system and to become part of the EU Internal Market for electricity Installation of additional capacities only in line with grid enhancement and based on cost competiveness (various models discussed) Introduction of a capacity market needed, that avoids closures of existing conventional generation capacity and incentivizes newbuilds is not technology-specific, nondiscriminatory Discussion on ageing fleet and its efficiency ETS needs to regain its steering function Therefore quick-fix for 2020 and high objectives for 2030 needed In Germany, between bn. investments into the Grid needed Thereof 60% within the 110KV grid Ensure that RES producers pay their share in grid modernization (myth around net metering) 3 Reform of ETS Reform/ modernization of the grid 4 Thus make the energy system efficient, European and cost competitive again! 16

17 Discussion about integration of renewable electricity Also the discussion about new renewable system is in progress. All political parties agree in changing the existing model driver is the cost reduction. At least there is no majority to implement due to the election in September E.ON Position: RES should become part of the internal market for electricity, therefore support systems should be based on market-mechanisms. E.ON believes that RES support should evolve to an EU-wide approach Reliable support schemes within a market environment are the best precondition for cost reduction of RES technologies RES-E should be subject to the same market and grid related rules as conventional generation capacities. 17

18 Will we see a European capacity mechanism design? Member States have taken the lead BE: Tendering for new gas plants proposed + additional rules for grid stability reserves

19 Discussion about capacity markets Discussion about capacity markets is in progress In 2014, new government must decide on new capacity mechanism in Germany. E.ON Position: Market design shall be based on competitive elements to ensure efficient solutions Capacity mechanisms should be considered only if security of supply is at risk Any capacity mechanism shall be designed from a European perspective and harmonized with neighbouring countries Capacity mechanisms should not favor a specific technology or new investment only and it should not exclude any market participants 19

20 Importance and progress of the Energiewende The Energiewende is... The Energiewende is progressing... (+/-0) 41 (+/-0) 49 (+7) 36 (-6) 52 (+1) 7 (+/-0) 2 (+2) 5 (+/-0) 4 very important important less important not at all important very well well not very well poorly n = changes vs. 06/2012 in brackets 20

21 21 Back-up

22 % of electricity generation (2010) Two years anniversary of the Energiewende? The conversion of energy supply Brunsbüttel Brokdorf (2021) Development of installed capacity of nuclear power in Germany (in MW) Unterweser Krümmel Emsland (2022) Grohnde (2021) % of electricity generation (2010) Biblis A Biblis B Grafenrheinfeld (2015) (-8.422) (-1.275) (-1.284) (-1.402) (-4.058) Philippsbg. 1 Philippsbg. 2 (2019) Isar 1 Isar 2 (2022) 0 NWS 1 NWS 2 (2022) Gundremmingen B (2017) Gundremmingen C (2021) EasyMap-Kartengrundlage: (C) LUTUM+TAPPERT, Bonn Shutdowns in 2011 Shutdowns in * when residual electricity quantities as defined in Annex 3 of the AtG (Atomic Energy Act) have been reached, at the latest by 31/12 of the corresponding year Source: Atomic Energy Act 7 22

23 MW The German Energiewende : Roads Act Renewable Energies Act (EEG) Maximum load: ca MW Minimum load: ca MW ? Photovoltaics Wind offshore Wind onshore 0 thermische Abfallbehandlung Wasserkraft >5 MW* Wasserkraft <5MW* Biomasse Wind onshore Wind offshore Photovoltaik Geothermie** * Partly estimated; **Geothermal energy not visible (2011: 10 MW) Source: BDEW, BMU-Leitstudie

24 Load flows in Central Europe: Spring 2011, Working day, noon, strong wind and sunny Spring 2011, Working day, Noon, strong Wind and sunny (Friday, April 8th, 2011, 13:00h) Load: MW Wind: MW 685 PV: MW 24 95% of Peak Load* 57% of inst. capacity wind 66% of inst. Capacity PV <40 % of Net Transfer Capacity** % of Net Transfer Capacity** % of Net Transfer Capacity** >100 % of Net Transfer Capacity** * Annual peak load in 2008 with MW ** NTC-values Summer 2010 Wind Wind Photovoltaics Sources: BDEW, entso-e data in MW