Dr. Christine WörlenJuly 2010

Renewable Energy Policy in Germany: A Green Jobs Success Story

Overview

• German industrial transformation• The renewables law: energy generation made easy• Benefits: CO2 emission reduction, income, jobs

Industrial transformation in Germany

Unemployment in Germany since 1950.

Source: BA 2010

Growth trends for renewable energy jobs compared to other industries.

Source: AEE 2010

Indexed to 100 in 1998

Automotive: 745.000; +5%Food: 927.000; +1%Agriculture and Forestry:

856.000; -11%Nuclear Energy: 30.000; -21%Construction: 2.197.999; -2%Lignite mining: 17.000;-35%Hard coal mining: 30.000; -58%

Renewable Energies in Germany

Renewables as share of total final energy consumption in Germany in 2009.

Source: BMU 2010

Renewable heat in Germany, 1997 - 2009.

Source: BMU 2010

Renewable electricity in Germany, 1990 - 2009.

Source: BMU 2010

The Renewable Electricity Law („FIT“) in Germany and its effect

Source: BMU 2010

Installed capacity and energy supply from photovoltaic installations in Germany 1990 - 2009

6,20

0

4,42

0

313

556

1,28

2

2,22

0

3,07

5

1 2 3 6 8 11 16 26 32 42 6476 162

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

[MW

p ]

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

[GW

h]

Electricity supply [GWh]

installed capacity [MWp]

Source: BMU-KI III 1 according to Working Group on Renewable Energies-Statistics (AGEE-Stat); Image: BMU / Bernd Müller; all figures provisional

Source: BMU 2010

Number of wind energy plants and installed capacity in Germany 1990 - 2009

6,185

4,326

1,675

7,861

1,084

9,359

11,438

13,752

15,387

17,556

18,685

3,528

5,178

16,543

405 700

2,467

21,164

19,46120,288

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

[No

. of

pla

nts

]

0

5,000

10,000

15,000

20,000

25,000

30,000

[MW

]

Installations, cumulative No. of plants

installed capacity cumulative [MW]

Source: B. Neddermann: Wind Energy Use in Germany - Status; 31.12.2009; Deutsches Windenergie-Institut (DEWI); Image: BMU / Brigitte Hiss; all figures provisional

German Renewable Energy Sources Act („Feed-in-Tariff“)

• …guarantees that the grid connection is established, • …guarantees that the power is purchased,• …guarantees that this happens at a cost-recovering price• …and over a sufficiently long time frame.• …incentivizes early action, • …is open for everybody, and facilitates the development of

new business models.

Renewable energy purchase prices

• …are fixed through the law• …are granted for 20 years• …vary by technology• …vary by plant (resource quality, plant size, feedstock)• …get lower over the years (degression)• …negotiated such that at current investment prices some

(marginal) profit is attained.

Advantages of Feed-in Tariffs: Simple, stable, fair, effective.

• All of these factors reduce the total cost of deploying renewables – through lower risk and – lower transaction costs, and maximize deployment activity

• Industry has a long-term perspective for large investment and capacity decisions.

• System is open for everybody. Extremely low barriers for becoming „energy systems owner“.

Advantages of Feed-in Tariffs: Simple, stable, fair, effective (II).

• Germany has overachieved her renewable energy targets. – In 2000, the target for 2010 was 12.5%. – This target was actually reached in 2007 with 14.7%.

• Costs for systems in Germany are lower than in other jurisdictions.

Costs and Benefits

FIT costs in relation to power price.

Source: BMU 2010, eigene Darstellung

2000 2002 2004 2006 2008 2009VAT 5,61 6,48 7,24 7,81 10,06 10,81Electricity Tax 3,73 5,22 5,97 5,97 5,97 5,97Concession fees 5,22 5,22 5,22 5,22 5,22 5,22KWK-G 0,38 0,73 0,91 0,9 0,55 0,67EEG 0,58 1,02 1,58 2,2 3,25 3,5Generation, Transport, Retail 25,15 28,32 31,56 34,53 37,95 41,53

0

10

20

30

40

50

60

70

80Eu

ros

per m

onth

Monthly electricity bill(3500 kWh per year)

CO2 avoidance through renewable energy, 2009.

Source: BMU 2010

Turnover from renewable energy installations in Germany, 2009.

Source: BMU 2010

Income from operating renewable energy installations in Germany, 2009.

Source: BMU 2010, eigene Darstellung

19%

9%

23%10%

20%

19%

Wind energy

Hydropower

Biomass electricity

Biogenic Solid Fuels

Biofuels

Photovoltaics

Total: €15,703 million

Total income from renewable energy in Germany, 2007.

Source: BMU 2008

Source: BMU 2010

Jobs in the renewable energy sector in Germany 2004, 2008 und 2009

3,400

9,500

56,800

63,900

4,300

9,300

95,800

85,100

6,500

9,300

9,000

87,100

25,100

1,800

74,400

9,100

109,000

79,600

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000

Geothermal energy

Hydropower

Solar energy

Biomass

Wind energy

Increase: approx. 87 %

Public / non-profit - sector jobs

Figures for 2008 and 2009 are provisional estimate;Source: BMU-KI III Projekt "Gross employment from renewable energy in Germany in the year 2009, a first estimate"; Image: BMU / Christoph Busse / transit

2004 2008 2009

160,500employments

278,000employments

300,500employments

Source: BMU 2010

Share of providers of wind energy installations in newly installed capacity in Germany up to end of 2009

Vestas 19.5 %

Enercon60.4 %

Nordex1.9 %

Fuhrländer4.9 %

REpower Systems8.8 %

GE Energy1.2 %

Others1.9 %

Multibrid1.6 %

New installed capacity (total): 1,917 MW

Deviations in the totals are due to rounding;Source: B. Neddermann: Wind Energy Use in Germany; Version: 31.12.2009;

Deutsches Windenergie-Institut (DEWI); all figures provisional

The solar industry in Germany.

BSW Präsentation Marktentwicklung

26

8%5%

27%

19%

41%

Employees by Qualification Groups in Germany

Master/Technician

Unskilled workers

Office workers

Academic

Skilled workers

Own translated diagram based on: Wissenschaftsladen Bonn et al. 2009, p.4

….solar PV….

Source: BMU 2010

Global wind energy capacity 2009

India3.4 %

China34.7 %

USA26.5 %

Canada2.5 %

Spain6.6 %

Germany5.1 %

Rest of world10.6 %

Portugal1.8 %

Italy3.0 %

France2.9 %

UK2.9 %

Source: Global Wind Energy Council (GWEC): press release; March 2010; all figures provisional

New total installation: 37,446 MW

Renewable energy jobs require more labor than other industries.

Source: Wei, Patadia and Kammen 2010

0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9

BiomassGeothermalLandfill Gas

Small HydroSolar PV

Solar ThermalWind

Carbon Capure and StorageNuclear

CoalNatural Gas

Energy Efficiency

Total Job-Years / GWh (Average)

Total Job-Years/GWh per Energy Technology in the U.S.

Sweetwater, TX

•Nolan County, Texas had 20% of the population living in poverty in 2004. •Now 1,100 of the 15,000 residents have jobs directly related to wind energy. •Sweetwater area is steadily growing again for the first time in decades. •Nolan County‘s property tax base has expanded from $500 m in 1999 to $2.4 bn in 2008.

Source: windpowerworks.org 2009

Conclusion

• Energy efficiency and renewable energies will be among the main vehicles to achieve Germany‘s climate protection objectives.

• But that brings along new opportunities for growth. The policies implemented are having multiple benefits: – increased energy security – decreased GHG emissions, – Creation of an industry of global significance,– Jobs and national income.

• Among the social and economic benefits of these policies is increased resilience against the current global downturn.

Thank you for your attention.

Christine Wörlen, Ph.D.Münzstrasse 19 | 10178 Berlin | Germany mail woerlen@arepo-consult.com