Germany s Energiewende The Energy Transition Webinar Series. WIND Where is the German Wind Energy Heading?

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1 Germany s Energiewende The Energy Transition Webinar Series WIND Where is the German Wind Energy Heading? December 2, 2015

2 Energiewende in Germany - Webinar Series Moderator Thomas Grigoleit Director Energy, Environment & Resources Germany Trade & Invest Headquarters Berlin thomas.grigoleit@gtai.com Germany Trade & Invest 2

3 Energiewende in Germany - Webinar Series Moderator Claus Habermeier Director New York Office Germany Trade & Invest Claus.habermeier@gtai.com Germany Trade & Invest 3

4 Energiewende in Germany - Webinar Series Germany Trade & Invest (GTAI) is the official foreign trade and inward investment promotion agency of the Federal Republic of Germany. We assist international companies in setting up their business operations in Germany.

5 Energiewende in Germany - Webinar Series Our services: Industry expertise Search for ideal location Tax / Legal / Incentive information Partnering opportunities Access to equipment vendors, R&D institutes, engineering companies, lawyers, tax advisors, financing institutions, All of our services are free of charge and treated confidentially! Germany Trade & Invest 5

6 Energy Transition Goals 2050 GHG Emissions - 80% Share of Renewables 60% Share of RE-Electricity 80% Energy Consumption -50% + Nuclear Phase-out by 2022 GTAI-Short Film on the German Energiewende: Copyright: GTAI

7 Energiewende in Germany - Webinar Series Please post questions through webinar toolbar More Images Germany Trade & Invest 7

8 Energiewende in Germany - Webinar Series We will send the presentation afterwards More Images Germany Trade & Invest 8

9 Speakers & Agenda Wind Where is German Wind Energy Heading" Esther Frey Senior Manager Wind Energy Germany Trade & Invest "Funding Options in Germany for Wind Energy Companies" Friedrich Henle Senior Manager Financing and Incentives Germany Trade & Invest Q&A Session after the presentations 9

10 alpha ventus/repower 2009 Where is German Wind Energy Heading? Ms. Esther Frey 2 December 2015

11 Agenda I. Onshore Wind in Germany II. Offshore Wind in Germany 2 December

12 Development of Renewables in Germany

13 Current Status of Onshore Wind in Germany Development of Onshore Wind Installations New Installations HY 2015 Source: WindGuard December

14 Current Status of Onshore Wind in Germany Development of Onshore Wind Installations New Installations Repowering HY 2015 Source: WindGuard December

15 Current Status of Onshore Wind in Germany EEG 2014 Major changes New remuneration scheme Direct marketing obligatory Market premium (difference between fixed tariff and price at electricity exchange) No repowering bonus, SDL bonus, management premium Degression of fixed tariff, starting in 2016 Fixed tariff Market premium Electricity Price Source: BMWI December

16 Current Status of Onshore Wind in Germany EEG 2014 Major changes Expansion corridor GW/year net additions Degression of fixed tariff according to real installations Commissioning Initial Tariff (minimum 5 years) 8.9 c/kwh 8.79 c/kwh Basic Tariff 4.95 c/kwh 4.89 c/kwh Announcement of tenders to determine prices and manage future expansion Source: BMWI 2014, BNetzA December

17 Onshore Wind in Germany - Developments Current Developments and Market Opportunities EEG Tendering procedure Existing assets Optimization & further operation Repowering Decomissioning Sales or recycling Radar Airports & radar activated lighting Integration 2 December

18 Onshore Wind in Germany - Developments Major changes 2 December

19 Onshore Wind in Germany - Developments EEG Tendering Cabinet resolution Final Resolution of EEG 2016 Consultation and draft law Start of tendering Source: BMWI December

20 Onshore Wind in Germany - Developments Framework for Onshore Tender System (draft) Subject-matter of tender: tariff to calculate the market premium; capacity 2.9 GW/year at the start Frequency: 3-4 times a year Pay-as-bid auction Received funding entitlement not transferable Whole projects can be sold Limit for realisation: penalty after 24 months expiration of entitlement after 30 months Maximum price: 8.9 ct/kwh Requirements: Permit under emission-protection rules (BImSchG-Genehmigung) Challenges? Minimum 1 MW Bid Bond of 30 /kw Source: BMWI December

21 Agenda I. Onshore Wind in Germany II. Offshore Wind in Germany 2 December

22 Current Status of Offshore Wind in Germany Development of Offshore Wind in Germany 3000 OWTs with Grid Connection - Annual Additions (in MW) OWTs with Grid Connection - Cumulative Capacity (in MW) Source: WindGuard December

23 Current Status of Offshore Wind in Germany EEG 2014 Major changes New aims: 6.5 GW for 2020 and 15 GW for 2030 Direct marketing obligatory Higher initial tariff prolonged (acceleration model) Announcement of tenders to determine prices and manage future expansion Source: BMWI December

24 Offshore Wind in Germany - Developments 2 December

25 Offshore Wind in Germany - Developments EEG 2016 Offshore Tenders (draft) Transition Period for advanced projects (Tenders up to 2.4 GW) Commissioning 1st. Regular Tender Commissioning Source: BMWI December

26 Offshore Wind in Germany - Developments Framework for Offshore Tender System (draft) Transition Period Basics like Onshore Tender (pay-as-bid, BidBond, lowest price wins ) Aim: 800 MW new capacity / year Just advanced projects bid against each other! (Denmark) Regular Tenders Basics like Onshore Tender (pay-as-bid, BidBond, lowest price wins ) Aim: 800 MW new capacity / year Central" tendering model Source: BMWI December

27 Offshore Wind in Germany - Developments Transition period Source: BNetzA December

28 Offshore Wind in Germany - Developments Regular tenders Preliminary development by BSH Source: BNetzA December

29 Contact Thank you for your attention! Germany Trade & Invest Foreign Trade and Inward Investment Promotion Agency Ms. Esther Frey Senior Manager Wind Energy Friedrichstr Berlin Germany T. +49 (0) F. +49 (0) 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. 2 December 2015 Incentives in Germany 20

30 Chris Schmidt - istockphoto Incentives in Germany Mr. Friedrich Henle 2 December 2015

31 Incentives in Germany Different instruments many applications. Required funding for: Investments Working Capital Research & Development Specific Purposes Personnel Public funding instruments: Grants Loans Guarantees Equity Capital Mezzanine Capital 2 December 2015 Incentives in Germany 2

32 Case Study Wind Engineering Company Establishing a new offshore wind engineering company (maintenance of equipment) assumptions: Small company Staff Headcount < 50 Annual Turnover EUR 10 million Annual Balance Sheet Total EUR 10 million County Cuxhaven (Lower Saxony) Investment location Aid intensity in Lower Saxony Small enterprises Mediumsized enterprises Large enterprises Nonpredefined C 20% 15% 0% Region 2 December 2015 Incentives in Germany 3

33 Case Study Wind Engineering Company Establishing a new offshore wind engineering company (maintenance of equipment) assumptions: Employees: 10 new workplaces Equipment: EUR 2,000,000 Equity: EUR 200,000 Funding gap for equipment: EUR 1,800,000 How to finance EUR 1,800,000 by using public funding sources? 2 December 2015 Incentives in Germany 4

34 Case Study Wind Engineering Company Subsidizing cap-ex using Investment Grants (GRW) GRW program in Lower Saxony (County Cuxhaven) - Long-term jobs - Min. investment = EUR 150,000 - Co-financing of up to 20% for small enterprises Eligible cap-ex (equipment) EUR 2,000,000 Investment Grant EUR 400,000 (20% x EUR 2,000,000) How to finance the remaining part? 2 December 2015 Incentives in Germany 5

35 Case Study Wind Engineering Company Subsidizing cap-ex using Public Loans Equipment 2,000,000 EUR Equity 200,000 EUR Investment Grants (GRW) 400,000 EUR Financing gap 1,400,000 EUR Public Loan i.e. KfW Entrepreneur Loan : 1,400,000 EUR 2 December 2015 Incentives in Germany 6

36 Case Study Wind Engineering Company Strengthening of the loan securities Public guarantee Challenges: 1. Convincing a commercial bank of the project 2. Loan securities Solution for strengthening the loan securities: Public Guarantee Example: Public Guarantee by Niedersächsische Bürgschaftsbank (Lower Saxony Guarantee Bank ) Guarantee NBB classic = 1 st class loan security Guarantee amount: 60% loan amount under risk = max. 840,000 EUR 2 December 2015 Incentives in Germany 7

37 Case Study Wind Engineering Company Final financing structure of the project Investment: 2,000,000 EUR Financing structure: 2,000,000 EUR Equity: Investment Grants (GRW): KfW Entrepreneur Loan: 200,000 EUR 400,000 EUR 1,400,000 EUR Securities for the KfW-loan: 1,400,000 EUR Invested assets: 2,000,000 EUR Public guarantee: 60% loan amount under risk 2 December 2015 Incentives in Germany 8

38 Service How can Germany Trade & Invest help you to make use of incentives for your project(s) in Germany? Identification of project-specific funding Application support Identification of other suitable financial instruments & financial partners 2 December 2015 Incentives in Germany 9

39 Contact Thank you for your attention! Germany Trade & Invest Foreign Trade and Inward Investment Promotion Agency Mr. Friedrich Henle Senior Manager Financing & Incentives Investor Support Service Friedrichstr Berlin Germany T. +49 (0) F. +49 (0) 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. 2 December 2015 Incentives in Germany 10

40 Q&A Session Thomas Grigoleit Claus Habermeier Esther Frey Friedrich Henle (Moderator) (Moderator) (Speaker) (Speaker) Director Director Senior Manager Senior Manager Energy, Environment and Resources Germany Trade & New York Office Germany Trade & Invest Wind Energy Germany Trade & Invest Financing and Incentives Germany Trade & Invest Invest 10

41 Energiewende in Germany - Webinar Series November 3, 2015 Stationary Energy Storage Customers, Markets, Trends November 10, 2015 Energy Efficiency Green Buildings, Smart Cities, and Efficient Production - Opportunities for Innovators December 2, 2015 Wind Where is German Wind Energy Heading? December 3, 2015 Smart Grids Drivers & Opportunities - 11:00 AM - 11:30 AM & 7:00 PM - 7:30 PM German Time - Germany Trade & Invest 11

42 Energiewende in Germany - Webinar Series Thank you foryourattention! Germany Trade & Invest 12

43 Contact Data GTAI Investment Consulting Energy, Environment & Resources Division: Europe Berlin - Headquarters Mr. Thomas Grigoleit Director Energy, Environment & Resources T thomas.grigoleit@gtai.com Ms. Anne Bräutigam Senior Manager Photovoltaics / Energy Storage T anne.brautigam@gtai.com Mr. Henning Ellermann Senior Manager Energy Efficiency Solutions T henning.ellermann@gtai.com Ms. Esther Frey Senior Manager Wind & Hydro Power T esther.frey@gtai.com Ms. Flérida Regueira Cortizo Senior Manager Environmental Technologies T flerida.regueira@gtai.com Mr. Tobias Rothacher Senior Manager Photovoltaics / Energy Storage T tobias.rothacher@gtai.com Mr. Heiko Staubitz Senior Manager Energy Storage / Smart Grid T heiko.staubitz@gtai.com Mr. David J. Warne Senior Manager Geo Energy T heiko.staubitz@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 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 2015 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.