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The Impact of Liberalisation on the Environmental Performance of the Electricity Sector in Germany

The Impact of Liberalisation on the Environmental Performance of the Electricity Sector in Germany. How is the the German Electricity sector administered? Why did Germany Liberalise the electricity sector ? What options did Germany select within EU Directive?

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The Impact of Liberalisation on the Environmental Performance of the Electricity Sector in Germany

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  1. The Impact of Liberalisation on the Environmental Performance of the Electricity Sector in Germany

  2. How is the the German Electricity sector administered? Why did Germany Liberalise the electricity sector ? What options did Germany select within EU Directive? What were the results of Liberalisation? Aim: to Answer the Following Questions during this Presentation:

  3. German Electricity Sector Governance Ministry for Economics & Technology Responsible for Energy Policy Responsible for Environmental/ Energy Policy Ministry for Environment, Nature Conservation & Nuclear Safety Co-ordinates energy research and development Ministry for Education, Science, Research & technology Controls Fair Competition & mergers Federal Cartel Office Federal Level Länder Level Implement law and grant licenses in their Länder Länder Governments Länder Ministries of Economics/Environment Authorise single buyers, transit tariffs, supply tariffs

  4. 5 laws - restrict emissions 4 Key laws that subsidise renewable energy and combined heat and power. Tax on Electricity - Eco tax & Tax on Gas Subsidies for energy efficiency programs. Voluntary agreements - phase out nuclear & reduce GHG emissions Key Environmental/Electricity Legislation

  5. Political Objectives - to support EU unification and to promote diversification of energy supply Socio-economic Objectives - to reduce costs of electricity and improve efficiency in East. Environmental Objectives - to support the introduction of renewable energy and reduce GHG emissions. Liberalisation Objectives in Germany

  6. 1989 - Federation Regulation on electricity Tariffs 1998 - Energy law 1999 - Amendment to the 1958 Act Against Restraints of Competition. Key milestones in German Liberalisation Process

  7. Extent Germany implemented EU Directive Directive Requirement How Implemented in German -Third Party Access - Negotiated Third Party Access - Competition restrictions noted - Network access restrictions in E. - Regulator - Federal Cartel Office - Transmission System Operator - (TSO)8 transmission operators - Permitted Reason to deny Access - Lack of capacity & Reciprocity - Transmission charges - Point Tariff - Market Opening - Full market opening (1998) - Tender or Authorisation - Authorisation - Unbundling of TSO - Management is unbundled - Supply unbundling - Full unbundling Source: Adapted from Table by EuroElectric in article ‘Implementation of the Internal Electricity Market Directive

  8. Access to the Grid Number of Players in the market Price of Electricity Finance and Risk Environmental Performance Results of German Electricity Sector liberalisation

  9. No. of Players in the Market

  10. No. of Players in the Market (cont)

  11. The Price of Electricity

  12. Finance and Risk has: 1. made it less attractive to invest in coal, nuclear, hydro and 2. changed Behaviour of players in the market: Expansion within the usual segment of business Growth by investing in non-electric utilities International Expansion Finance and Risk

  13. Reduced Emissions CO2 Reduced emission SO2 and Nox Increase No. of Renewable Energy Constant Energy Efficiency Reduced Costs to German Government Environmental Performancein the German Electricity Sector

  14. Emissions of CO2 Ministry for Economy & Technology 2001

  15. SO2 and Nox Emissions from the electricity Sector Ministry for Economy & Technology 2001

  16. Reduced Emissions CO2 Reduced emission SO2 and Nox Increase No. of Renewable Energy Constant Energy Efficiency Reduced Costs to German Government Environmental Performancein the German Electricity Sector

  17. 1990 Damage Costs: NOX, SO2, NMVOC,NH3 [European Commission 1998].

  18. Conclusions • Environmental Performance • Transparency • Access to Grid • Ownership • Price of Electricity • Finance and Risk

  19. Due to Germany‘s strong environmental regulation, Liberalisation has had a limited impact on the environmental performance of the electricity sector. The key aspects of liberalisation, if any, that have affected the environmental impact of electricity systems?

  20. What are environmental/energy/technological policies implemented to control environmental impact? • Strong emission controls • Support to E.Germany to improve technology • Subsidies to support renewable energy, CHP, and energy efficiency. • Taxes • Voluntary Agreements with Business

  21. Effective enforcement Increasing environmental awareness leading to public support for strong governement actions Culture where high level of State/Gov. intervention is considered good . Why are these Policies Successful?

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