T HE ENERGY TRANSITION IN G ERMANY AND THE RENEWABLE ENERGY SOURCES - - PowerPoint PPT Presentation

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T HE ENERGY TRANSITION IN G ERMANY AND THE RENEWABLE ENERGY SOURCES - - PowerPoint PPT Presentation

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T HE ENERGY TRANSITION IN G ERMANY AND THE RENEWABLE ENERGY SOURCES ACT : C ONTEXT , LEGAL AND PROCEDURAL ASPECTS NDRC study tour, Berlin, 5 July 2016 Dr. Stephan Sina Senior Fellow, Coordinator Energy, Ecologic Institute Energy transition in

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THE ENERGY TRANSITION IN GERMANY AND

THE RENEWABLE ENERGY SOURCES ACT:

CONTEXT, LEGAL AND PROCEDURAL ASPECTS

NDRC study tour, Berlin, 5 July 2016

  • Dr. Stephan Sina

Senior Fellow, Coordinator Energy, Ecologic Institute

5 July 2016

Energy transition in Germany and Renewable Energy Sources Act

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www.ecologic.eu

Content

Development of the energy transition in Germany The European framework for renewable energy The national framework for renewable energy The support systems of the Renewable Energy Sources Act (EEG) Reporting and monitoring Institutions (selection)

5 July 2016 2 Energy transition in Germany and Renewable Energy Sources Act

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www.ecologic.eu

Development of the energy transition in Germany Key decisions:

  • Feed-in Law (1990)
  • Renewable Energy Sources Act (2000 - Last

reformed 2014)

  • 1st Nuclear phase-out decision (2000)
  • Energy Concept / Prolongation of nuclear power

plants lifetime (2010)

  • Fukushima / Second nuclear phase-out decision

(2011)

5 July 2016 3 Energy transition in Germany and Renewable Energy Sources Act

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www.ecologic.eu

The Energiewende has a history…

Nuclear Energy Policies Renewable Energy Policies

1960-1989: Construction of nuclear power plants in Germany 1000 solar roofs programme 1991: Feed-In Law 100.000 solar roofs programme

1998-2005:

Social Democrats/ Greens Since 2000: Renewable Energy Sources Act 1st Phase-out decision Extension

2009-2012

Christian Democrats/ Liberals

1999 1990

Chernobyl

1986 2000 2010

2nd Phase-out decision

2011 0% 2005-2009:

Christian-/ Social Democrats

Since 2012

Christian -/ Social Democrats

Fukushima

2011 60%/ 80%

5 July 2016 4 Energy transition in Germany and Renewable Energy Sources Act Source: Ecologic Institute

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www.ecologic.eu

Pillars of the Energy Transition beyond nuclear phaseout Renewable Energy (Electricity, Heat, Transport) Energy Efficiency (Buildings, Industry, Appliances) European Emissions Trading Scheme (EU- ETS)

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www.ecologic.eu

EU Framework on Renewable Energy

Climate and Energy package 2020

  • EU target for a share of renewable energy of 20% of

final energy consumption

  • Renewable Energy Directive (RED):

Individual binding targets for Member States Free choice of support systems National action plans Biennial progress reports Cooperation mechanisms

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www.ecologic.eu

EU Framework on Renewable Energy

State Aid Guidelines for environmental protection and energy (2014-2020)

  • Compatibility of support for renewable energy

installations with EU competition law

  • Not binding on Member States, but non-compliance

leads to competition procedure including suspension of contested financial support

  • In principle, compatibility requires tenders from 2017
  • nwards

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www.ecologic.eu

EU Framework on Renewable Energy Climate and Energy package 2030

  • EU target for a share of renewable energy of

27% of final energy consumption

  • No individual targets for Member States
  • National contribution process according to

new governance structure (including regional cooperation), still to be agreed upon

  • Revision of RED planned for 2017

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www.ecologic.eu

National Framework on Renewable Energy

Energy Concept of 2010 (revised): share of RES in

  • 2025: 40 - 45%
  • 2035: 55 - 60%
  • 2050: At least 80%

Climate Change Plan (in process) Renewable Energy Sources Act (EEG)

Other legislation on renewable energy, e.g. Renewable Energy Heat Act (EEWärmeG)

5 July 2016 9 Energy transition in Germany and Renewable Energy Sources Act

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www.ecologic.eu

5 July 2016 10 Energy transition in Germany and Renewable Energy Sources Act

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Support systems of the Renewable Energy Sources Act (EEG)

Three phases:

  • Feed-in Tariffs (2000-2014)
  • Premium Tariffs (since 2009/2012)
  • Tender system (since 2014, in process)

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  • Guaranteed grid access: priority transmission and

distribution

  • Fixed price for every kWh produced for 20 years; Tariffs are

set by the law for each type of technology and with regard to further provisions (e.g. site, system services).

  • Annual degression of tariffs due to technical development
  • EEG-Surcharge: Additional costs for renewable energy

production are offset by all electricity consumers (EEG levy 2015: ~ 6.17 ct/kWh), energy-intensive industries are widely exempt

Feed-in Tariffs: Main features

Energy transition in Germany and Renewable Energy Sources Act 5 July 2016

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www.ecologic.eu

Feed-in Tariffs: pros and cons

Pros:

  • Investor security (low risk)
  • Suited for all technologies and small installations
  • Flexibility via differentiated tariffs
  • Suited for quick deployment of RES
  • Decentralised approach with high local acceptance

Cons:

  • Funding rates fixed by Government, must be continuously

adapted (risks: political bargaining, cost inefficiency, complexity)

  • No cap on investments (deployment difficult to control)
  • Harmonisation with other EU States´ support systems difficult

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www.ecologic.eu

Premium system: Main features

Direct selling of the produced renewable energy on the spot market; if wholesale price is below a reference tariff producer gets feed-in premium on top Premium: difference between wholesale price and reference tariff Since 2012 optional, mandatory for certain technologies (biomass) Since 2014 mandatory for all technologies Exceptions for small installations (<100 kW since 2016) Annual degression according to capacity addition (deployment paths and „corridors“)

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Annual Degression: how it works

5 July 2016 15 Source: BMWi Energy transition in Germany and Renewable Energy Sources Act

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Premium system: pros and cons

Pros:

  • Producers act as market participants, away from „produce and

forget“ mentality

  • Target more efficient grid management

Cons:

  • Higher costs due to higher financing risks
  • Unclear whether sufficient for better market integration and

cost decrease in the long term

  • 5 July 2016

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Tender system: Main features

Determination of RES funding via market-based auction scheme (plant operators submit bits for funding) Since 2015: Pilot phase for auctioning 1,200 MW of ground-mounted solar PV (2015-2017) From 2017 extension to other technologies according to current EEG-revision:

  • Onshore wind energy
  • Offshore wind energy
  • Large PV installations
  • Biomass

From 2017 5% of tenders to be opened for installations in other EU Member States

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www.ecologic.eu

Tender system: Pros and cons

Pros:

  • Market-based system
  • Cap on investments
  • Better control of RES deployment

Cons:

  • No experience so far in Germany except for ground-mounted PV

(not fully transferable to other technologies)

  • High administrative costs
  • Underbidding may lead to lower realisation rate
  • Unclear whether costs will sink
  • Diversity of actors difficult to maintain

Individual tender design for each technology needed

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www.ecologic.eu

Why does Germany switch to a tender system?

Difficulties in steering the deployment of RE and resulting increase of the EEG levy Competition procedure against EEG 2012: deal with European Commission to secure EEG levy exemptions for energy-intensive industries Legal security from further competition procedures Mainly political reasons, not based on evidence or conviction that tender system is better!

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Reporting and monitoring

Report on experience with EEG

  • Evaluation of EEG every four years, report to Bundestag
  • Support by several institutions and independent experts
  • Main function (until transition to tenders): preparation of

adjustment of tariffs

Monitoring Report

  • Annual report on progress and specific issues to Bundestag
  • Included in monitoring report on Energy Transition

Statement by Independent Monitoring Commission

  • Statement on monitoring report on Energy Transition by four

independant experts, published together with Government Report

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www.ecologic.eu

Institutions (selection)

Clearingstelle EEG

  • Private independent entity, since 2007 in its present form
  • Avoidance and settlement of disputes:
  • General advice how to apply EEG provisions
  • Alternative dispute resolution procedures
  • Services open to installation and grid operators
  • Information and regular expert discussions
  • Discharge of courts, high acceptance by stakeholders

Bundesnetzagentur (Federal Network Authority)

  • Specific monitoring and decision-making functions
  • Responsible for the Register of Installations
  • Responsible for auctions

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THANK YOU FOR YOUR ATTENTION

  • Dr. Stephan Sina

Senior Fellow, Coordinator Energy Ecologic Institute Stephan.sina@ecologic.eu www.ecologic.eu

5 July 2016

Energy transition in Germany and Renewable Energy Sources Act