Renewable Energy Development in Germany (Status and Outlook)

1. Renewable Energy Development in Germany (Status and Outlook) Rainer Hinrichs-Rahlwes,Board MemberBEE - German Renewable Energy Federation Berlin, 3rd of December 2012

2. BEE - the German Renewable Energy Federation is the umbrella organization of renewable energy in Germany, with 25 member associations and organizations representing 30,000 members, including 5,000 enterprises. Our target: 100 % of renewable energy.

3. Renewable Energies – mature and beneficial • Provide significant contribution to Security of Energy SupplyWide range of RE technologies are proven and mature A mix of different technologies and resources is available • Renewables reduce Dependency on Energy Imports  RES are domestic energy sources • Renewables mitigate the risks of Price Volatility of Fossil Fuels Wind, solar and geothermal energy are free RE-technologies have high cost decreases • Renewables are reliable technologies against Climate Change RES are (nearly) carbon free or carbon neutral

4. GHG-Reduction from Renewables in Germany (2011)

5. Industry: > 500,000 jobs in 2020 Further increasing, problems for PV manufacturers

6. 2011: 36 billion Euro Turnover from RES plus 13.1 for O&M RES investment predominantly for electricity

7. Are Renewables expensive? • Energy prices do not tell the truth New technologies were always heavily subsidised Globally, fossil & nuclear receive 6 times the subsidies of RE Grid costs are not properly attributed to fossil & nuclear energy • Most externalities are not included in energy prices Impact of fossil on environment, health, society not included Nuclear risks (incl. Waste!) are largely borne by public money No realistic price of carbon (despite ETS) • There are various competitive disadvantages for Renewables Still: Costs for Renewables are decreasing rapidly Wind is already competitive (even in disturbed markets) Solar PV is reaching grid parityAND: Costs for fossil & nuclear are increasing

8. Avoided Fossil Fuel Imports due to Renewable Energy billion Euro Forecast electricity heating transport Source:

9. Public benefit: Merit order effect price marginal generation cost RE lower electricity prices RE substitute most expensive power plant Electricity produced

10. Different cost structure of REand the need for support • High (upfront) capital costs but close to zero operating costs (Wind, PV ...) Distributed production and consumption: different grid structure • Flexible system needed: smart grids, system services, storage .... • For development and deployment of a broad range of renewable • Need to bridge the gap between today’s and tomorrow’s energy • remove remaining economic and administrative barriers, • compensate for structural and competitive disadvantages • accelerate market penetration and up-scaling of various RE, • foster technology development and increased deployment, • trigger economies of scale and resulting cost reduction.

11. Increase of EEG surcharge Development of EEG surcharge and of increasing factors 2012 - 2013 Reduction stock market price Industry privilege Real support costs Liquidity reserve Compensation for last year Costs of market premium

12. Real costs of EEG are lower Percentages of Increase from 2012 to 2013 Real support costs 11% Compensation 2012 40% Reduction stock market price 21% Industry privilege 16% Liquidity reserve 7% Market premium 5%

13. Distribution of pure EEG costsamong the different technologies

14. The German Government’s Energy Concept 2010: Targets • Greenhouse Gas Reduction: minus 40% by 2020, 55% by 2030, 70% by 2040, 80-95% by 2050 (compared to 1990 levels) • Share of Renewable Energy in Gross Final Energy Consumption: 18% by 2020, 30% by 2030, 45% by 2040, 60% by 2050 • Share of Renewables in Electricity Consumption: 35% by 2020, 50% by 2030, 65% by 2040, 80% by 2050 After Fukushima – complete Phase-out of Nuclear Energy by 2022

15. Renewables Support: The German Policy Mix

16. The Renewable Energy Act – EEG – Regulation / Law • Priority grid access for Renewables installations • Each kWh must be purchased and remunerated by the utility / grid operator (with defined exceptions) • Fixed feed-in tariff paid for 20 years • Annual (monthly for PV) degression for new installations (a fixed percentage or a defined mechanism) • Differentiated support according to technology, size and site quality • Costs are passed on to all electricity consumers (specific exceptions for energy intensive industry) • Regular evaluation and amendments Money - EEG - Power Utility / TSO Provides for grid access, sets FIT conventional electricity Feed-in tariff renewable electricity Electricity rates + FIT surcharge Electricity consumer RES-E Producer

17. Renewable Energy installations owned by citizens

18. Renewables in Germany (2011)

19. RE for Transport in Germany New and focused policies needed Significant growth 2004 – 2007 / stagnation since then

20. RE Heating & Cooling in Germany 2011: 10.4% RES Stable Framework missing  Future growth uncertain

21. Solar Thermal Heating in Germany

22. Geothermal Heat in Germany

23. RE Electricity in Germany Strong growth due to Feed-in tariffs 2012 >25% 2011: 20%

24. Electricity from Wind in Germany

25. Installed Windpower in Germany

26. PV Capacity and Yield in Germany 2012 – more than 30,000 MWp

27. Biomass for Electricity in Germany

30. Paradigm-Shift:From traditional baseload power …. Simulation 2007: 15 % RE (hourly resolution)

31. … towards a smart Mix with very high shares of Renewable Energy BEE-Scenario 2020: 47 % RE (hourly resolution) Peaks atnoon Strong andweak wind periods Storage, Import/Export Variable Load  System-Transformation: technically & economically

32. Thank you for your attention! BEE - German Renewable Energy Federation Reinhardtstraße 18 10117 Berlin Fon +49 30 275 81 70  0 Fax +49 30 275 81 70  20rainer.hinrichs@bee-ev.de www.bee-ev.de