The German Energiewende what comes after the nuclear phase out? Thomas Grigoleit Germany Trade & Invest

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1 The German Energiewende what comes after the nuclear phase out? Thomas Grigoleit Germany Trade & Invest

2 Agenda I. Energiewende and Renewable Energies in Germany II. Integration: Energy Storage & Smart Grids

3 Electricity Supply in Germany Status Quo Renewable Energies already outperform nuclear power in terms of installed capacity and electricity generation. Energy Source Share in Installed Capacity (2011) Energy Source Share in Net* Electricity Generation (2011) Photovoltaic 15% Nuclear Power 7% Lignite 12% Hydroelectricity Biomass 10% Wind Power 8% Photovoltaic 3% Nuclear Power 18% Wind Power 17% Hard Coal 16% Oil and Others 5% Hydroelectricity Biomass 7% Oil and Others 11% Natural Gas 15% Natural Gas 14% Hard Coal 18% Lignite 24% Total: GW Annual peak load: app. 80 GW wind power: GW PV power: 24.7 GW Total: 579 TWh *Reducing the gross electricity share of TWh by the power Source: BMU 2012, BDEW 2012 plants own consumption of 35,2 TWh

4 Electricity generation [GWh] Germany World Leader in Renewable Energies Strong governmental support lead to strong growth in all renewable energies Development of electricity generation from renewable energy sources in Germany EEG: August 2004 EEG: April 2000 EEG: January 2009 EEG: June StrEG: January 1991 March 2000 Amendment to BauGB: November 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);

5 The New Energy Concept 2010 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)

6 German Energiewende Germany s nuclear power phase-out Due to the nuclear disaster in Fukushima in 2011, phase out of nuclear power plants was brought forward from 2036 to Hamburg 8 out of 17 nuclear power plants were already shut down in Berlin 2011: 17.6% nuclear power of total energy consumption (2010: 22.6%) 1 Cologne Development of installed nuclear power plants capacity in MW % of electricity generation (2010) 1) Quelle: BMWi Die Energiewende in Deutschland, Februar % of electricity generation (2010) Frankfurt 2022 Stuttgart Active nuclear reactor with date of scheduled closure Nuclear reactor already closed 2) Quelle: DAtF, Munich

7 The German Energy Mix: Status Quo and Outlook 2011: Renewable Energies have a share of 20% of electricity consumption. Governemntal targets: 35% by 2020 and 80% by 2050 Structure of Electricity Production from Renewable Energies in Germany ) of renewable energies Prognosis of yearly installed offshore capacity (in GW) 1) Biogas 14,40% Biomass 9,30% Others Waste 2,50% 4,10% Wind Energy 38,10% Prognosis of Electricity Production (in TWh/a) 2) Photovoltaics 15,60% Hydro Power 16,00% 50 0 Hydro Power Wind - Offshore Biomass Wind - Onshore PV Geothermal Sources : BMU

8 Exploring Offshore Wind Energy Both North and Baltic Sea offer offshore wind energy opportunities. Offshore Wind Parks North Sea 1 Offshore Wind Parks Baltic Sea 1 Germany Interactive Map 4 Around 215 MW offshore capacity was installed in Germany by the end of Project developments of over 80 offshore wind parks are currently in progress offshore wind parks in the German Bight and another 5 projects in the Baltic Sea received formal approval by the end of Sources: 1) Maps: BSH 2011 (modified), (North Sea ; Baltic Sea ); 2) DEWI GmbH 2012; 3) BSH, March 2012; 4) ISET e.v. (

9 Exploring Offshore Wind Energy Offshore wind farm development in Europe concentrates on Northern Europe. Current offshore wind farm projects in Northern Europe Approx. German projects Source: ISET e.v.: (8 February 2012)

10 Wind: Trend towards Offshore Europe will remain the most important offshore market in the future. Prognosis of yearly installed offshore capacity (in GW) 1) 9 8 0,5 7 1, ,2 0,9 3 5,9 2 3,3 1 0,2 0 0, Europe Asia/Pacific North America Germany provides an offshore pipeline of over 8 GW approved projects. It s offshore development is strongly supported by the government s new Energy Concept 2050 and subsequent political government initiatives. The Wind Energy Agency expects 5,261 MW of cumulated offshore installations in Germany by 2015² ) Source 1) Roland Berger 2011: wind Turbine Manufacturing a case for consolidation, 2) wab

11 The German Wind Energy Market Europe's primary wind energy market in numbers Regional Distribution of Total Capacity in Germany (2011) Mecklenburg- Vorpommern 6% Thüringen 3% Sachsen 3% Others* 7% Lower Saxony 24% Rheinland Pfalz 6% North Rhein Westfalia 11% Brandenburg 16% Schleswig- Holstein 11% Sachsen-Anhalt 13% *all other German States with less than three percent of total installed capacity Please note: There are additional capacities offshore. Sources: DEWI GmbH 2012 ; Map:

12 The German PV Market 2011 Germany and Italy are the world s largest PV markets; Europe accounts for 75% of the world market New PV Installations 2011 in MWp 1 German PV Market Total installed PV power 24.7 GWp Greece 426 Australia 774 UK 784 Belgium 974 Rest of World 3040 Italy 9284 Newly installed PV power Investments in new installations 7.5 GWp 15 bn Japan 1296 France 1671 USA 1855 China 2200 Total 29.7 GWp Germany 7485 (25%) German PV Industry Turnover of manufacturers 10.7 bn Turnover of equipment suppliers bn Number of jobs 110,900 Sources: 1) EPIA May 2012; 2) Federal Network Agency March 2012; 3) BMU 2012; 4) VDMA April

13 The German PV Market: Installations per Segment Systems 50kWp are dominating the market with 37% of capacity Newly installed capacity Number of systems newly installed 10% 6% 1% 31% 19% 9% 8% 1% TOTAL: 2011: 7.5 GWp 2010: 7.4 GWp 12% 35% 25% 12% % 27% 42% 48% % 50% TOTAL: 2011: 238,202 systems 2010: 250,043 systems Under 10kWp 10-50kWp kWp 250kWp 1MWp Over 1MWp Roof-top share: 85% of volume in 2010 BIPV share: 0.044% of volume in 2009 Sources: Federal Network Agency 2012; Images: Solarwatt, BP, Geosol; BMU

14 The German PV Market reached Grid-Parity in 2011 PV can develop within a few years from the most expensive to one of the cheapest types of power generation from renewables. (BMU 2011) * 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]

15 The Principle of Own-Consumption Mayor income through cost savings on electricity from the grid, Feed-in tariff only for surplus electricity: Wattage PV Energy Feed-in tariff: to ct/kwh 1 Own-Consumption of PV Energy (saves ~25 ct./kwh²) Energy from grid: Costs ~25 ct/kwh 2 Energy Demand Time of day 0h 3h 6h 9h 12h 15h 18h 21h 24h Notes: 1) Depending on size of system according to feed-in tariff classification 2) Depending on electricity retail price of respective utility company

16 Intelligent Energy Storage for Own-Consumption Smart Homes: Integration of batteries and demand side management Source: Solarworld,

17 Agenda I. Energiewende and Renewable Energies in Germany II. Integration: Energy Storage & Smart Grids

18 PV Electricity Generation in Germany Electricity production June 30th, 2012 [MWh] :00 2:00 4:00 6:00 8:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00 Non-Fluctuating Wind ~27 GWp current installed PV capacity *Source: EEX 2012 (

19 The German Wind Energy Market Germany is the leading wind energy market in Europe, in terms of new annual installations and total capacity installed. New Capacity Installed in Europe 2011 (in MW) Total Capacity Installed in Europe 2011 (in MW) Greece 311 Portugal 377 Poland 436 Romania 520 Sweden 763 France* 830 Other 1002 Total of 10 GW Italy* 950 Germany Spain UK Denmark Ireland Other Netherland8.319 s Portugal UK Sweden Italy* France* Total of 96 GW Spain Germany Note: * Prognosis; Source: EWEA Annual Statistics

20 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 15 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

21 Demonstration projects Different technologies being tested * Classification of electrical energy storage * Only selected demonstration projects Sources: Gtai Research

22 The electricity grid in Germany: Bottlenecks ahead! New power structure in 2030 will lead to bottlenecks in transmission Offshore- Wind parks ++ Conventional Power Plants ++! Bottle neck!!! -- Shut down of Nuclear Power Plants Power balance 2008 Power balance

23 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

24 Smart Grids in Operation Smart Energy Regions : E-Energy at a Glance 6 pilot regions "Internet of Energy" Scientific study: Potential of information and communication technologies for the optimization of energy provision and consumption 140m public and private funds

25 Contact Data GTAI Investment Consulting 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 and Smart Grid T heiko.staubitz@gtai.com Mr. Tobias Rothacher Senior Manager Photovoltaics and Bioenergy T tobias.rothacher@gtai.com Mr. Tobias Homann Senior Manager Photovoltaics T tobias.homann@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 Mrs. 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 August,

26 Cumulated Additional Capacity worldwide [GWp] PV: Trend towards Non-subsidized PV Markets By 2020 more than 50% of the world market for own-consumption; Europe will lead this segment; Germany as the role model 400 B2C B2B Europe North America Asia South America Middle East Africa Own Consumption Peak Capacity Isolated Grids Off-grid Large-scale Power Plants Total PV 2020: GWp (2011: 65 GWp) Source: McKinsey

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29 The Federal Energy Concept Measures for implementing the new energy policy after the decision taken on the gradual phase-out of nuclear power by 2022 Faster expansion of renewable energies Integration of renewable energies into the overall energy system, e.g. through a market premium Central component: wind energy Increase energy R&D levels - up to 0.5 bn will be made available Expansion of electricity and smart grids as well as increasing the level of energy storage capacity Restructuring the fossil power plant park towards more flexible power stations (e.g. gas plants as responsive power to intermittent renewable energies) Increase energy efficiency (particularly in buildings) Cost efficiency and efficient procurement European initiatives for energy efficiency Source:

30 The electricity grid in Germany: Outlook An enormous expansion of the high voltage grid system is required. Offshore wind power until 2030 goverment s target: + 25 GW Power plants nearby the coast under construction: + 15 GW Repowering onshore wind capability until 2020: + 10 GW up to + 15 GW Network expansion between north and south is necessary Nuclear phase out until 2022 in the south of Germany: - 13 GW New Networks New Networks Source: BDEW

31 The electricity grid in Germany: Network Expansion Expansion requirements for the transmission and distribution grid Transmission grid Grid expansion of 3,600km is required by Baseline scenario with overhead lines as most cost-effective option: bn. /a Distribution grid Medium-voltage power grid (500,000km): expansions of 11% to 28% Low-voltage power grid (1.1m km): expansion of 13% to 22% Expected: Investment of billion in grid infrastructure until