Renewable Energy in Germany Faces NEW CHALLENGES
he unexpected success of Sueeess 01 Renewables In the last twelve months several Trenewable energy policies in the scenarios have shown that, at least for eleetricity sector has led to new leads to New Questions the electricity market, 100 per cent controversies worldwide. Germany, renewables are achievable weil he German energy debate is with its third highest wind power before 2050 to bring economic entering a new phase. Year by installed capacity, is fighting a hefty T advantages. In the course of about year, renewable energy is gaining two years the focus of the discussion energy policy battle on its home turf. market share in the German electricity has therefore completely changed: It Based on a controversial govern market. Last year, renewable energy is not anymore a question whether mental energy concept and against a provided 16.4 per cent of the overall renewable energy sources will playa vast majority in public polis, a thin electricity consumption, three years major role, as undoubtedly they will in majority in the Parliament has earlier it was only 11.7 per cent. For the new future. The new big issue is extended the permitted lifetime of many years the large utilities have how fast will be the transformation, nuclear power plants. The claim to belittled decentralised power gen wh ich technologies will dominate and provide a bridge into a renewable eration - now they are trying to fight who will control them. This islinked to energy future with this decision has back. Their business model, based on the complicated question of how to neither convinced the re-born anti large centralised power plants and design an energy system relying nuclear movement nor the growing efficient distribution, is being put into essentially on fluctuating energy clean-tech industry and smaller question by new distributed gen sources such as the wind and sun. utilities investing in a renewable eration technologies. On the other future. hand, the renewable energy Germany is one of the first countries promoters are not yet comfortable in Having the world's largest market for where these questions undeniably their new role: They have grown out of emerge; Denmark with its islands has photovoltaics that is more than a niche market and have to prepare to doubling, Germany is currently been a frontrunner on a smaller scale. become responsible for the entire However, in order to solve the ques pondering over how to contain the energy system - and this requires tion, co-operation at the European costs of its frontrunner policy. The completely new answers as level is increasingly seen to be success of wind energy stirs distributed and fluctuating power essential. Important financial, discussions on nature proteetion and production from renewable sources scientific and political resources are new landlines. involves a very different system deployed in this debate which will design. Behind all these issues, the main surely influence discussions and decisions elsewhere. questions are: Who will control the Two years ago, after a long dis future electricity system after the cussion, the European Union decided transition to renewable energy to set a target of 20 per cent for the Government lavours Big sources? How much time will it take to share of renewable energy in overall Ineumbent Utilities get there? Will there be a break energy consumption by 2020. This through towards decentralised has obliged Member States to think year ago, German Chancellor structures? Many of these issues, about how to achieve their specific ngela Merkel from the Christian stirring intense debates in this targets and has triggered a Democratic Party formed a new country, are of international interest. discussion on the prospects for 2050. government in a coalition with the
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~bi!!-"""""""""""'·'-- -IIEI- --"\i>l",·..,,,,,.,,,,·..·,,o.:,,,,--,,_,,-,,,,,1~, Photovoltaics: ADisruptive in triggering the take off of global for supporting PV to 2 Eurocent and renewable energy markets. As has presented corresponding Technology causing Hot regards wind, even though Germany scenarios wh ich require that the Debates has the second largest installed German PV market be contained weil capacity after the US, it has lost its below 6 GW while assuming that PV nshore wind and photovoltaics dynamics. However, in photovoltaics, costs can be halved between today Oare changing the investment Germany makes up for half of the and 2020. This study is a milestone in rhythms of the industry. Last year, $27 global market and till two years ago, the discussion, but has invited billion were invested in renewable German companies were also the criticism from opposite sides. energy generation in Germany. dominating suppliers. Today, Chinese Despite a reduction in feed-in tariffs, PV companies are producing the A major problem is how to contain PV estimations for the new PV insta highest volumes - mostly with pro market growth in Germany. The Solar llations this year turn around 8 Gw. duction equipment made in Germany. Industry Association has lost much of Two-thirds of this new capacity is its credit, repeatedly trying to prevent stemming from roof-top plants with a In October, the transmission grid additional tariff cuts predicting a size under 100 kW. A completely new operators announced that in 2011 the collapse of the market, and regularly kind of investors is entering the extra charge for renewable energy will underestimating market growth. Also market: House owners, farmers, reach 0.035 Euro ($ 0,047) per kWh wind energy representatives have industries, special investment funds. (about half of this for pv, much less for become nervous since they fear that They want to contribute to the wind). In reality, this figure is higher exploding solar power costs could transformation of the electricity than the real additional costs due to call into question the whole feed-in system and are attracted by feed-in the feed-in tariffs paid: Wind and solar tariff system. The problems are tariffs, which guarantee fixed revenue power, produced at no marginal cost, specific to the German PV market: for every electricity unit (kWh) fed into are themselves driving down the spot Due to short construction and the grid during 20 years after market prices for electricity which are permitting times, it reacts very rapidly installation. Following the con used as basis for the calculation. As a to price signals - much more than the siderable cost reduction in study by AT Kearni has shown, for wind energy market. In times of photovoltaics, these tariffs have been photovoltaics this leads to an overcapacity it is the only market reduced considerably - not only with overestimation of additional costs of worldwide that can absorb consider a regular mechanism every year on about 25 per cent. Nevertheless, the able quantities at discounted prices in the 1st of January, but also in an relatively high costs for photovoltaics a short time. Therefore, more extraordinary round this summer. have caused an intense political sophisticated mechanisms will have Nevertheless, as all German utility debate. Hardliners have called for the to be developed to prevent a rapid customers have to pay for the feed-in abolishment of the feed-in tariff overheating ofthe marketwhen prices tariffs, this boom leads to a rise in altogether. Others have called for a drop. electricity prices. much stronger decrease of tariffs or even a cap. But according to public Another serious problem for market By introducing the feed-in tariff ten polis three quarters of the population governance is the current structural years ago, Germany has succeeded are ready to pay a supplement of up to change of the industry: Having much 2 Eurocent per kWh easier access to capital, Chinese for supporting solar companies have strongly expanded power generation. in the last years and can produce at lower costs than most medium-sized The answer to the European producers. Seven out ofthe question "how ten biggest gainers in the industry are much is too much?" Chinese, together they will increase cannot be calcu their cell and module manufacturing lated. It must be a capacity by 6.4 GW this year. A market political one. In its shake-out has started in which many "PV-Roadmap less innovative smaller European 2020", released in companies will not survive. The larger early November, the ones have started to produce in Asia Solar Industry Asso too. The German Solar Industry ciation BSW-solar Association, which has also has proposed to hundreds of small installing com limit the supplement panies among its members, is
,. http://www.phoenixsolar.com/Press/SuNeys/
Vi....:...o::..:l:.:.....6.::..2,~N..:..:o:..:... ..::.51-'O::..c::..:t....:...-...:.N.:::o:....:.v-=2:..::::0...:.10:::...- IIl------.:In:::W..:..:....:::in~d:...;C::::hr~on~i:=:::cl:..::::e therefore in a difficult position: 2015 and 2018 photovoltaics in have sooner or later to be substituted, Different interest groups are calling for Germany will become fully com pro-nuclear governments and different strategies. Generally, petitive with other power sources. The landscape protection initiatives European Industry is stronger in already mentioned roadmap-study worked in a strange alliance for a long specific high-tech products than in presented by BSW-solar comes to a time: Wind energy development has mass production of standardised similar result with another calculation thus remained very slow - with the goods. The entrance of Bosch, a method: Competitiveness in excuse of weak winds in a hilly global leader in automotive, industrial Germany will be reached around landscape. However, with taller and building technologies, into the 2017. These calculations are based turbines, the wind potential in these market is characteristic for the on the expectation of strongly areas has become considerable too. transition in course. The company, growing global PV markets and Growing awareness for climate and which has a worldwide presence, also corresponding cost reductions. In energy issues has led to intense boasts of technologies needed to countries gifted with more intense discussions concerning wind and integrate photovoltaics into a wide sunshine, PV eleetricity is cheaper. A nature conservation and eventually variety ofcontexts. recent report of the European resulted in nearly doubling the areas Photovoltaic Industry Association dedicated to wind energy in spatial As long as market volumes were (EPIA) has confirmed that in many planning all over Germany. Never smalI, it was not a problem for German regions of the world PV already theless, harvesting wind power is support policies to stabilise a dynamic constitutes a competitive form of peak most rewarding on the coast in the world market despite price and power generation and predicts a north, far from the big population and 4 technology jumps. However, with hitherto unexpected growth • industry agglomerations. growing international competition, heavy capital investment, global Wind Energy needs Despite increased subsidies, pro markets approaching three-digit gress of offshore wind in Germany is billion volumes, this gets more difficult Transmission Grids - But slower than expeeted. The four large - and inevitably causes more political How Much? utilities have shown more interest in discussions. In the medium-term, it offshore wind than in all other seems inevitable that the European he development of wind energy in renewables, but prefer to invest in the Union with its larger dimension and TGermany has been much less offshore wind fields in Britain, as risks coordination opportunities must gain dynamic, although it is by far the are lower since the water is less deep; importance. dominating renewable power source and - most important - the eleetricity and will always maintain this role since produced does not direetly compete Nevertheless, this debate on public it also delivers during the winters with German nuclear and coal power support will not last long - the window when solar power in Germany is very plants. of opportunity in which the opponents low. Rising prices of raw materials of photovoltaics can hope to seriously followed by the credit crunch, in damage the industry will definitely combination with long lead times close in a couple of years. Since 2006 have led to a rather steady the cost of photovoltaic systems has development after years of strong dropped by 45 per cent. A study by AT growth. In Europe, 39 per cent of the 2 Kearney for Phoenix Solar has new electricity generating capacity calculated that in 2010 the balance of installed in 2009 was wind energy photovoltaics for the German more than any other type of economy is positive for the first time: generation. Compared to 2008 the The real value of PV electricity in the market grew by 23 per cent, in markets, avoided CO2 emissions and Germany the growth was only 15 per tax incomes generated, all calculated cent. over a 30-year lifetime, over-com pensate the guaranteed feed-in tariffs In densely populated southern for the PV installations this year. Germany (Baden-Württemberg and Considering the different voltage Bavaria) where energy consumption levels, the study claims, between is high and old nuclear power plants
2. See footnote 1 .. Prepared by the consu/ting companies Ro/and Berger and PROGNOS : http://www.so/arwirtschaft.de/fileadmin/contentjiles/roadmap_kurz_eng/.pdf 4. http://www.epia.org/index.php?e/D=tx_nawsecured/&u= O&file=fileadmin/EP/A_docs/publications/epia/EP/A_Un/ockingJhe_Sunbelt_Potentia/_ of_Photovo/taicsJ2.pdf&t=1290860060&hash=b980a3bab7cea537e2dd5ffed1090918
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