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: On Track to a Successful

Martha Ekkert, Federal Ministry for Economic Affairs and Energy

Deputy Head of Division „International and External , Multilateral Cooperation in Energy, Energy Cooperation with Industrialized Countries“ 9 March 2016

16-03-09 Referent 1 CO2 emissions by country and population

18.00

16.00

)

14.00

12.00

Peninsula

10.00

8.00 Arabian

6.00

t CO2 t capita per in 2014

4.00

Saharan Africa Saharan

2.00 -

Latin America & America & Latin Caribbean the India

Brazil

Western Asia Asia (incl. Western

Asia (excl. Asia Asia) Western

United States & Canada & States United Germany China

NorthernAfrica

Australia & New New & Australia Zealand & EU 28 Switzerland Sub & fomer Soviet Union fomer RussiaSoviet &

0.00 5% 0%1% 19% 5% 6%2% 6% 17% 3% 3% 18% 12% 500 1,000 2,000 3,000 4,000 5,000 6,000 7,260

Population (in percentage and millions)

Source: Ecofys 2015 based on data from Edgar Joint ResearchfromJointEdgar on data based 2015Ecofys Source: Bureau2014Reference UN Populationand Centre2014 The per capita emissions of large western economies are still twice as high

as those of China. United States & Canada & States United

16-03-09 Martha Ekkert 2 Energy imports and domestic production in Germany

100 90 renewables domestic production 80 lignite 70 60% RES hard coal target gas 60 oil 50 oil imports

primary energy supply energy primary 40 gas imports

30 import dependence otal t hard coal imports

20 nuclear % % of 10 total imports 0 renewables target

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Source: AGEB 2012, AGEB 2014 2012, AGEB AGEB Source:

The Energiewende hits many birds with one stone as renewables and efficiency reduce Germany’s energy dependence.

16-03-09 Martha Ekkert 3 German nuclear phase-out timeline Jun 2015 Dec 2021 Grafenrheinfeld Gundremmingen C (1288 MW), (1345 MW) Grohnde (1360 MW), GW Fukushima (1410 MW) Dec 2017 Dec 2022

Grundremmingen B Isar 2 (1410 MW), (1284 MW) Emsland (1329 MW), Neckarwestheim 2 20 Dec (1365 MW) 43% 2019 Philippsburg 2

Grafenrheinfeld (1402 MW)

10

Ecofys 2015, BMWi 2015 BMWi 2015,Ecofys

: :

57%

Source

today

Jun 2015 Jun

Aug 2011 Aug

Nov 2003 Nov May 2005 May

2000 2005 2010 2015 2020

Nuclear phase-out will reduce Germany’s total power capacity. The remaining 8 nuclear power plants will be phased out by 2022.

Martha Ekkert 16-03-09 4

Five reasons for the Energiewende

. Development of new technologies as new sources of growth and employment . Energy policy can be both sustainable and economically successful

. Reduce dependency on energy imports . Reduce carbon emissions and reach climate protection targets . Phase-out nuclear power generation

The Energiewende is a long-term strategy based on public acceptance.

Martha Ekkert 16-03-09 5

Key elements of the Energiewende Supporting fields of action

Market and system integration Energy Efficiency

Key legislation: Energy research and Key legislation: Energy Saving Ordinance development Renewable Energy Sources Act Heating Cost Ordinance Renewable Energy Heat Act

• Increasing energy • Steady growth productivity European energy and • Environmentally friendly • Cost-efficient savings climate policy energy supply

Energy efficiency and renewables secure a sustainable .

Martha Ekkert 9-Mar-16 6

2050 Energiewende targets Achieved 2020 2025 2030 2035 2040 2050

2014

2015,

-55 % -27% -70

Climate -80 to -95 BMWi

reduction (vs. 1990) -40 2014, % gross electricity 32.5% 80 50 55 to 60 65 consumption (2015) 40 to 45 Renewable 35 BMWi Energies % gross final energy 60 13,7% 18 45

consumption 30 2010,BMU/ -20 % primary energy - 7.3 % 2016Agora 2015, consumption (vs. 2008) (2015) -50

final energy productivity Government Energy 1.7% p.a. +2.1% p.a. (2008-2050)

(vs. 2008) 2014,AGEB

Efficiency

: Federal : Stat

building renovation ~1% p.a. doubling of renovation rate: 1%  2% p.a. -

% transport energy AGEE 1.7% -10 -40 Source consumption (vs. 2008) The energy transition follows a transparent, long-term strategy with specific targets.

Martha Ekkert 16-03-09 7

Political steering of the Energiewende

Federal and state coordination

• Chancellor • Prime ministers of the Länder

In charge of the Energiewende

Federal Ministry for Economic Affairs and Energy

Electricity Market Energy Efficiency Stakeholder

Platform Platform 2014

Dialogue BMWi

Energy Grids Buildings Research and :

Platform Platform Innovation Platform Source

Monitoring report “Energy of the Future”

Martha Ekkert 16-03-09 8

German primary energy consumption by energy source

15,000 14,000 Target: target minus 20% 13,000 12,000 others

11,000

10,000 nuclear [PJ] 9,000 8,000 7,000 lignite

Petajoule 6,000 5,000 hard coal

4,000

3,000 oil

2,000 2015 1,000 renewables

0 AGEB

* preliminary data Source: Energy efficiency and the switch to renewables are gaining momentum.

Martha Ekkert 16-03-09 9

German gross electricity production

2005 total: 622,6 TWh 2015 Total: 647.1 TWh renewables share: 62,5 TWh renewables share: ~ 194 TWh Oil & Other: [CATEGOR[VALUE] Oil & Other: Y NAME]: 5,8% [VALUE] Hard Coal: [CATEGOR 21,5% [CATEGOR Y NAME]: Wind: 4,4% Nuclear Y NAME]: [VALUE] Energy: Solar: 0,2% [VALUE] RES: [CATEGOR 26,2% RES: 10% :2,3 [VALUE] Y NAME]: % [CATEGORY [CATEGOR[VALUE] NAME]:11,7 [CATEGOR Y NAME]: % Lignite: Y NAME]: [CATEGOR [VALUE] Hydro: 3,1% Hydro:3.0% 24,8% [VALUE] Y NAME]: [CATEGOR [VALUE] Y NAME]:

[VALUE] Source: Ecofys 2016, AGEB 2015, Agora Energiewende 2016 2015, EnergiewendeAgoraAGEB 2016,EcofysSource: Renewables have overtaken each conventional source to become the largest electricity source in just ten years.

Martha Ekkert 16-03-09 10

Cornerstones of the Renewable Energy Sources Act

• Guaranteed grid access for renewables; priority transmission and distribution

• Support payments for every kWh produced • Feed-in premium (and feed-in tariffs in some cases) • From 2017 on mostly based on auctions • Technology specific payments, also with regard to further provisions (e.g. site and size) • Renewables’ support costs are offset through the EEG levy; the special

equalization scheme reduces the burden for energy-intensive industries Kommunikation, Ecofys, BMWi 2016 BMWi Ecofys,Kommunikation,

• Grid operators ensure grid stability independently from the public budget - • Expansion corridors guide growth pathway

• Regular monitoring and evaluation; accompanying research Source: ERGO Source:

Martha Ekkert 16-03-09 11

Renewable Energy Sources Act Amendment 2014

More planning security Binding target corridors for RES deployment Introducing quantity control mechanisms

More efficiency Affordability Focus on cost-efficient technologies

More market integration Increase market integration through premium system Environmentally- Tendering scheme for ground-mounted PV friendly energy supply

More diversified distribution of costs EEG levy on self-supply Security of supply Adjusted exemptions for the industry

More Europe Open auctioning scheme for European neighbours

Martha Ekkert 9-Mar-16 12

Renewables share in gross electricity consumption

50 Overall target corridor 45.0 45 . In 2025: between 40% and 45% RES-E

40 . In 2035: between 55% and 40.0 60% RES-E 32.5 in % in 35

30 Capacity additions share

. Onshore wind and PV 25 2 500 MW (2.5 GW) per

20 17 year each 2015 . 100 MW per year 15

10.2 . Offshore wind 6.5 GW by Renewables

10 6.2 2020, 15 GW by 2030 : Ecofys, BMWi Ecofys, BMWi : 5

Focus on Wind and PV as Source 0 most cost-effective solutions 2000 2005 2010 2015 2020 2025

Martha Ekkert 16-03-09 13

RES levelised cost of electricity in Europe 2014, 2020, 2030

Source: Fraunhofer ISI 2014ISIFraunhofer Source: Renewables are increasingly competitive with conventional power plants.

Martha Ekkert 16-03-09 14

Auctions to replace feed-in premium based support

Results of German renewables auctions pilots scheme for ground-mounted PV in April 2015: • 500 MW were on offer in three separate rounds: 150 MW in 1st and 2nd round each, and 200 in 3rd round • Competition was high and therefore declinded significantly. • A variety of different types of actors was successful.

Level of feed-in premium as result of the auctions compared to the old EEG 10

9.5 9.17 BNetzA

9 Feed-in permium of old EEG 8.5

8.49 cent/kWh 8 8.00 Results of auctions in cent/kWh 7.5 1st round (pay-as-bid) 2nd and 3rd round: uniform pricing

7 on based2016Ecofys Source: Jan 2015 May 2015 Sep 2015 Jan 2016 The auction scheme led to a further decrease in PV support levels.

Martha Ekkert 16-03-09 15

Key pillars of the NAPE

2015

Stepping up Energy efficiency Individual energy efficiency as a return and responsibility for in buildings business model energy efficiency

• Energy efficiency • Tender model • Energy efficiency incentive • Default guarantees networks programme for energy • Top-Runner strategy • Energy efficiency performance

strategy for buidlings contracting Source: Ecofys 2015 based on European Commission 2014, BMWi BMWi 2014, onCommission European based 2015Ecofys Source:

16-03-09 Speaker 16 Energy efficiency policy frameworks

2030 Targets EU policy Energy Efficiency Directive (EED) Energy Performance of Ecodesign and Energy Buildings Directive (EPBD) Labelling Directive Policies in Energiekonzept (2010) Germany

National Action Plan on Energy Efficiency 2015

(NAPE) (2014)

Energy Efficiency Strategy for Buildings Ecofys

(2015) Source: Germany’s energy efficiency policy is embedded in the EU framework.

16-03-09 Speaker 17 Benefits of fostering energy efficiency and renewables

INVESTMENTS

ECONOMIC AND ECOLOGIC EFFECTS OF THE

“ENERGIEWENDE”

RGO RGO 2014 Source: E Source: The energy transition has positive effects on various levels of the economy.

Martha Ekkert 16-03-09 18

German energy import cost savings in 2014 bill. € 40.0 26.0 35.0 25.1 24.0 22.2 30.0 import costs saved 18.6 due to energy 25.0 efficiency

20.0 import costs saved 15.0 due to RES 10.0 9.1 8.8

10.0 8.4 6.1 6.6 7.1 on BMWi 2015 BMWi on 2.9 4.4 5.6 6.3 5.0 1.6 1.7 1.9

1.4 based 0.0

In 2014, Germany could save about €13 billion compared EcofysSource:, to the previous year by reducing the import costs for fossil fuels. Martha Ekkert 16-03-09 19

Net job creation due to the energy transition

120

100 Industry

80 Trade 60

40 Building sector

20 2014 Services

0 1000 employees1000

-20 Prognos Energy and mining -40

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: GWS, EWI,GWS,Source: Of all sectors, employment in the building sector benefits most from the energy transition.

Martha Ekkert 16-03-09 20

Ownership structure of German RES facilities in 2012 contractors, 0.2% Total ~ 73 GW others, 1% funds and banks, 13%

private owners, 35%

industry, 14%

utilites, 12%

farmers, 11% project developers,

14%

Source: trend:research 2013 trend:researchSource: Renewable installations create multiple opportunities for entrepreneurship – the ownership structure is versatile.

Martha Ekkert 16-03-09 21

Public acceptance of the Energiewende

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1. development of renewables is "(extremely) important" 92%

2. phasing out nuclear energy by 2022 71%

3. the energy transition is right 56%

4. energy transition is "(very) important" 89%

5. aims of the energy transition are right 82%

6. aggregated index for acceptance 68%

Percentage of people that agree or strongly agree with the given statement 2014,DemoskopiefürInstitut 2014,2014, Emnid TNS BMWi : BMUB 2014, BDEW 2014, Forsa 2013, BDI 2013 BDI Forsa2013,2014,BDEW2014, BMUB The energy transition enjoys a high degree of public approval. Sources

Martha Ekkert 16-03-09 22

Future: German electricity system volatility in 2022

Winter 2023 (November) Summer 2023 (August) GW GW

80 80

60 60

40 40

20 20

Power generation (GW)generation Power Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat Sun

conventional onshore / electricity demand photovoltaic hydro biomass

plants offshore wind Source:AgoraEnergiewende 2015 Renewables can cover the total demand by 2022 but conventional back-up capacity for the winter will still be needed.

Martha Ekkert 16-03-09 23

Four areas to increase flexibility

20% 35% 50% 65% 80% Share of RE

2025 2035 2050 Target year

Grids Grid expansion

Flexibility Generation (thermal and renewables)

Consumption Demand response

Power-to-heat Storage Batteries Pumped storage

Power-to-gas BMU Source:2014 Technology neutral policies foster innovation: Different flexibility measures are suitable for different challenges to the grid.

Martha Ekkert 16-03-09 24

The challenge: connecting supply and demand

solar wind (installed) wind (planned)

bottleneck transmission grid distribution grid

high-demand areas Source: DUH 2011 DUH Source: New power lines need to transport excess supply in northern Germany to southern Germany in order to prevent shortages.

Martha Ekkert 9-Mar-16 25

Climate: German

1400 Kyoto target (1st com period) 1200 other emissions

1000 households

eq 2

800 transportation

CO Mt 600 commerce, trade, services

400 industry

200 agriculture

0

*preliminary

estimation Source: UBA 2014 UBA Source: Germany has made significant progress in reducing emissions, but will need further measures to achieve its 40% target by 2020.

Martha Ekkert 16-03-09 26

Thank you for your attention

Contact details

Bundesministerium für Wirtschaft und Energie Referat IIA1 Scharnhorststr. 34-37 10115 Berlin

[email protected] www.bmwi.de

16-03-09 Referent 27 Additional Slides

16-03-09 Referent 28 Technology specific support levels as of April 2016

Remuneration in cent/kWh Legend: min max solar PV 8 12.7 * The standard payment for wind onshore is 8.69 cent/kWh and for wind offshore* 3.9 18.4 wind offshore 14.9 cent/kWh. wind onshore* 4.83 8.69

geothermal 25.2 biomass 5.79 23.49 landfill, sewage & mine gas 3.8 8.42

hydropower 3.5 12.52

BNetzA 2015 BMWi 2016,BNetzA

0 5 10 15 20 25 30 :

cent/kWh Source Technology-specific payments reflect the varying cost of different types and sizes of renewables.

Martha Ekkert 16-03-09 29

NAPE: Efficiency measures and their expected savings 32-76.5 PJ savings

Quality assurance and optimising of energy consulting 4.0 PJ Incentive programme for energy-efficient renovation up to 40 PJ Continuation and increased funding of the CO2 building modernisation programme 12.5 PJ Promoting “energy performance contracting“ 5.5-10 PJ

National energy-efficiency label for old heating installations 10.0 PJ

85 PJ 2014

savings

National top runner initiative 85.0 PJ BMWi Pilot programme for energy savings meters - 180.5-206 PJ

savings 2015basedon Introduction of a competitive tendering scheme for energy efficiency 26-51.5 PJ Upgrading the KfW energy efficiency programmes 29.5 PJ Energy efficiency networks initiative 74.5 PJ Ecofys

Obligation to perform energy audits for non-SMEs 50.5 PJ Source: A balance of information, support and regulation.

16-03-09 Speaker 30