energy transitions in france and germany - cgemp

www.bdew.de BDEW Bundesverband der Energie- und Wasserwirtschaft e.V.

Energy transitions in France and Germany

Convergences, divergences & impact on Europe

Andreas Kuhlmann

Director Strategy and Politics

Paris, 31 May 2013

BDEW Bundesverband der Energie- und Wasserwirtschaft e.V. Energy transitions in France and Germany

For me „Energiewende“

means first and foremost...

25 22 21

32 34

22

38 34 36

26

47 52

32 36 37

31

17

27

all CDU/CSU SPD Linke Grüne Piraten

Nuclear phase-out

Development of renewable energies

Achieving climate targets

By political party

n=1.010

Andreas Kuhlmann 31 May 2013


Energy concept 2010 / overview

Overview of the objectives:

Reduction of greenhouse gases: 2020: 40%, 2030: 55%, 2040: 70%, 2050: 80-95 %

Expansion goals for renewable energy:

Gross final energy consumption: 2020: 18%, 2030: 30%, 2040: 45%, 2050: 60%

Gross electricity consumption: 2020: 35%, 2030: 50%, 2040: 65%. 2050: 80%

Reduction of heating needs: 2020: 20%, 2050: 80% (primary energy needs)

Doubling the rate of energy-related renovation: from today‘s 1% to 2% p.a.

Reduction of primary energy consumption by 20% by 2020 and by 50% by 2050

Increasing energy productivity by 2.1 % p.a.

Reduction of electricity consumption (10% by 2020, 25% by 2050)

E-Mobility: One million e-cars by 2020


BDEW Bundesverband der Energie- und Wasserwirtschaft e.V. Energy transitions in France and Germany Seite 4

Energy concept 2010 / overview

In summary:

Very ambitious!



The „German Energiewende“:

Source: BDEW, BMU-Leitstudie 2011

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000 1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

MW

Thermal waste treatment Water power >5 MW* Water power <5MW*

Biomass Wind onshore Wind offshore

Photovoltaics Geothermal energy**

Renewable Energies Act (EEG) Roads Act

* Partly estimated; **Geothermal energy not visible (2011: 10 MW)

2012

Maximum load: ca. 83.000 MW

Minimum load: ca. 35.000 MW

Photovoltaics

Wind offshore

Wind onshore 2000

?

Andreas Kuhlmann 31 May 2013 Seite 5


Situation 21 to 25 March 2013

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

00

03

06

09

12

15

18

21

00

03

06

09

12

15

18

21

00

03

06

09

12

15

18

21

00

03

06

09

12

15

18

21

00

03

06

09

12

15

18

21

Wind Photovoltaics Load

Thursday,

21.03.2013

Friday,

22.03.2013

Saturday,

23.03.2013

Sunday,

24.03.2013

Monday,

25.03.2013

Residual Load: 65.274 MW

2% load coverage

with Wind&PV

Residual Load: 14.405 MW

69% load coverage

with Wind&PV

Sources: Transmission System Operators, BDEW (own calculation)



Electricity generation capacity (GW) Gross electricity generation (TWh)

• It is necessary to significantly expand capacities for renewable energies to achieve a share of 35 % in

electricity consumption by 2020 and 50 % by 2030 (with constant electricity consumption)

• The conventional generation system must be held available as back-up or system service, however,

electricity generation declines significantly (economic efficiency?)

Challenges for the generation system:

Considerably more capacity fo the same task

Co

nv.

Co

nv.

Co

nv.

Ren

ew

.

Ren

ew

ab

les

Ren

ew

ab

les

0

40

80

120

160

200

240

2010 2020 2030

Co

nven

tio

nal

Co

nven

tio

nal

Co

nven

tio

nal

Ren

ew

.

Ren

ew

ab

les

Ren

ew

ab

les

0

100

200

300

400

500

600

2010 2020 2030


Seite 7


Photovoltaics feed-in, May 15th, 2013

Photovoltaics

For comparison:

Nuclear

0

5 000

10 000

15 000

20 000

25 000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Fee

d-i

n in

MW

Time of day

15 May 2013

Sources: EEX, www.eeg-kwk.net



June 2009 July 2009

June 2011 July 2011

Utilisation gas power plant

Gersteinwerk (427 MW, implemented in 1973)

Source: RWE



Technical challenges: We need…

rapidly adjustable, highly flexible power plants

a reservoir of adequate conventional reserve capacities

new storage technologies

an intensive expansion of the power networks

possibly a new market design

new control technologies and system services

and above all more intelligence in the whole energy supply system. From

the consumer an the power lines to generation itself.

Bottom line: a whole range of new innovations…



German Energiewende:

New issues…

What about security of supply in Germany?

What will be the future market design? Capacity remunerations?

How far will prices for energy rise?

Will there be a real EU framework for energy and climate policy?

How is the Energiewende to be financed?

Can expansion of the networks and infrastructure keep pace with

the expectations and the expansion of renewable energies?

And many other issues…

Result: Uncertainty



What does the public think?

Autor der Präsentation 28.02.2012 Seite 12


Importance and progress of the

Energiewende

41

49

6 2 3

29

58

4

The Energiewende is ... The Energiewende is

progressing…

n = 1.011

very

important

important less

important

not at all

important

very well well not very

well

poorly

As of 06/2012; changes vs. 01/2012 in brackets

(-11)

(+12)

(-1) (-1)

(-1)

(-11)

(+6)

(+3)



When electricity is generated primarily

from renewable energies, …

22 22

48

more

less

no change

16

78

believe it

do not believe it

75

6

18

increase

decline

remain stable

…we will depend …

on electricity imports...

…there will be

major power failures.

…electricity prices

tend to...

n = 1.011

(+3)

(+2)

(-5)

(+/-0)

(-1) (-6) (+1)

(+2)

As of 06/2012; changes vs. 01/2012 in brackets



„Energiewende“ has...

61

19 15

37 35

26

rather advantages

no conse-

quences

rather dis-

advantages

rather advantages

no conse-

quences

rather dis-

advantages

for me individually for the industrial location

Germany

(+9)

(+2) (+/-0)

(-1) (-5)

(+/-0)

n=1.010; changes vs. 01/2012 in brackets



What about jobs?



Development of jobs in the field of

renewable energies in Germany

After continued growth, the number of jobs slightly declined for the first time in 2012. This

was especially due to the crisis in the solar industry. The total number of jobs remained on

the previous year‘s level because wind and bioenergy developed well.

?



Renewable energies:

378,000 jobs in 2012

Number of jobs by sector



-2,9

%

-1,6

%

-3,8

%

-4,1

%

-5,0

%

-3,6

%

-5,5

%

-5,7

%

-6,5

%

-0,8

%

+1

,1%

-4,4

%

+0

,4%

-2,7

%

+1

,0%

-0,4

%

+0

,7%

-0,3

%

+0

,8%

+0

,2%

-1,7

%

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000 1

99

1

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Em

plo

ye

es

Electricity Gas Heat/Cold

Jobs in the „classical“ energy sector

Andreas Kuhlmann 27.05.13 Seite 19

Source: BDEW, Status May 2013


Jobs: Consequences

But:

Almost 42 million employees in Germany

About 29 million social secured employees

Out of which 5.2 million in manufacturing industry sector (18 %)

830,000 employees in energy intensive branches alone.

Challenging questions:

Which consequences will Energiewende have on these jobs?

Will industry sector jobs remain competitive?

Can Germany keep its industrial value change and the successful

medium sized industrial sector?



The money issue



Prices for primary energy Annual averages in €/t SKE

0

50

100

150

200

250

300

350

400

450

500

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

*

€/t

SK

E

Crude Oil (import)

Natural Gas (import)

Coal (import)

Sources: BAFA, Kohlenstatistik e.V. *Crude Oil (import) and Natural Gas (import) until incl. 02/2013, third-country coal until incl. 12/2012



60

80

100

120

140

160

180

200

Jan 0

1

Apr

01

Jul 01

Okt 01

Jan 0

2

Apr

02

Jul 02

Okt 02

Jan 0

3

Apr

03

Jul 03

Okt 03

Jan 0

4

Apr

04

Jul 04

Okt 04

Jan 0

5

Apr

05

Jul 05

Okt 05

Jan 0

6

Apr

06

Jul 06

Okt 06

Jan 0

7

Apr

07

Jul 07

Okt 07

Jan 0

8

Apr

08

Jul 08

Okt 08

Jan 0

9

Apr

09

Jul 09

Okt 09

Jan 1

0

Apr

10

Jul 10

Okt 10

Jan 1

1

Apr

11

Jul 11

Okt 11

Jan 1

2

Apr

12

Jul 12

Okt 12

Jan 1

3

Apr

13

Natural Gas Household

Oil Household

Electricity Household

District Heat Household

Souces: Statistisches Bundesamt (FS 17, R 2), BDEW (Electricity 3,500 kWh) Indexed values: 2005 = 100, As of: incl. 04/2012

The graph shows the price development (indexed rate of price increase, no absolute fuel prices) of heating oil, gas, electricity and district

heating for households since January 2001 relating to base year 2005 (annual average)

Index

Development of energy prices for households

2007 2009 2008 2010 2011 2012 2006 2001 2002 2003 2004 2005



45,00

50,00

55,00

60,00

65,00

70,00 01.0

3.

02.0

3.

03.0

3.

04.0

3.

07.0

3.

08.0

3.

09.0

3.

10.0

3.

11.0

3.

14.0

3.

15.0

3.

16.0

3.

17.0

3.

18.0

3.

21.0

3.

22.0

3.

23.0

3.

24.0

3.

25.0

3.

28.0

3.

29.0

3.

30.0

3.

31.0

3.

01.0

4.

04.0

4.

05.0

4.

06.0

4.

07.0

4.

08.0

4.

11.0

4.

12.0

4.

13.0

4.

14.0

4.

15.0

4.

18.0

4.

19.0

4.

20.0

4.

21.0

4.

26.0

4.

27.0

4.

28.0

4.

29.0

4.

02.0

5.

03.0

5.

04.0

5.

05.0

5.

06.0

5.

09.0

5.

10.0

5.

11.0

5.

12.0

5.

13.0

5.

16.0

5.

17.0

5.

18.0

5.

19.0

5.

20.0

5.

23.0

5.

24.0

5.

25.0

5.

26.0

5.

27.0

5.

Eu

ro/M

Wh

Jahr 2012

Costs of the German Energiewende:

Electricity prices at the European Energy Exchange (EEX),

Derivatives, base load

Source: EEX

Change

on 27/05/11

versus 10/03/11: +12%

plus 6-8 Euros/MWh



0

20

40

60

80

100

120

140

02.0

1.0

713.0

2.0

7

27.0

3.0

711.0

5.0

726.0

6.0

707.0

8.0

718.0

9.0

731.1

0.0

7

12.1

2.0

701.0

2.0

814.0

3.0

829.0

4.0

812.0

6.0

8

24.0

7.0

804.0

9.0

817.1

0.0

828.1

1.0

820.0

1.0

903.0

3.0

9

16.0

4.0

902.0

6.0

914.0

7.0

925.0

8.0

906.1

0.0

9

17.1

1.0

905.0

1.1

016.0

2.1

030.0

3.1

013.0

5.1

024.0

6.1

0

05.0

8.1

016.0

9.1

028.1

0.1

009.1

2.1

025.0

1.1

108.0

3.1

1

19.0

4.1

102.0

6.1

114.0

7.1

125.0

8.1

107.1

0.1

1

18.1

1.1

104.0

1.1

215.0

2.1

228.0

3.1

214.0

5.1

227.0

6.1

2

08.0

8.1

219.0

9.1

201.1

1.1

213.1

2.1

204.0

2.1

318.0

3.1

3

02.0

5.1

3

in E

uro

/MW

h

Year Forward Baseload (rollierend) Year Forward Peakload (rollierend)

Price development at the energy exchange Futures market: Annual futures (01/01/2007 – 22/05/2013)

2007 2009 2008

Source: EEX

2010 2011 2012

: 60,86 €/MWh

: 49,30 €/MWh

: 79,36 €/MWh

: 55,83 €/MWh

: 99,40 €/MWh

: 70,33 €/MWh

: 69,84 €/MWh

: 49,20 €/MWh

: 64,48 €/MWh

: 49,90 €/MWh

: 69,02 €/MWh

: 56,07 €/MWh

EEX Power Derivatives Phelix-Base-Year-Future/Phelix-Peak-Year-Future (rollierend)



Electricity bill for households

37,65 33,83 25,14 25,03 28,29 29,90 31,65 32,73 34,18 35,55 37,89 41,18 40,51 40,25 41,33 41,76

12,25 14,38

15,52 16,74 18,70

20,24 20,74 21,70 22,58 24,65

25,26 26,52 28,59

33,34 34,18 42,04

49,90 48,21

40,66 41,77 46,99

50,14 52,39 54,43 56,76 60,20

63,15 67,70 69,10

73,59 75,51

83,80

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: BDEW, As of: 04/2013

Generation, transport and sales

+ 68 %

Taxes and levies (EEG apportionment, KWK surcharge, surcharge accord. to § 19 Network Charges Ordinance (StromNEV), offshore wind power surcharge, electricity tax, concession fee, VAT)

+ 243 %

+ 11 %

Changes compared

to 1998

Average monthly electricity bill of a three-person household in Euros Yearly consumption: 3,500 kWh



2% 2%

6% 9%

8%

9% 9%

10%

10% 12%

11%

14% 20%

29% 30% 43%

100 95

65 69

73

90 96

104

123 122

142

122 129

150 153 159

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Generation, transport and sales Taxes and levies

Taxes and levies: industrial electricity

Sources: VEA, BDEW; As of: 05/2013 * Including electricity tax

Development of electricity prices for the industry (1998 = 100)

Supply at medium voltage level* Annual consumption 160 to 20,000 MWh



9,15 8,51

5,46 5,61 5,99 6,17 7,02

7,65

9,26 9,00

10,70

8,70 8,63 8,83 8,98

7,61

0,20 0,25

0,35 0,42

0,51

0,69

0,88 1,02

1,16

1,31 2,05

3,530 3,592 5,277

0,36

1,23

1,23

1,23

1,23 1,23

1,23

1,23

1,23

1,54 1,54

1,54

9,34 8,86

6,05 6,47 6,86

7,98 8,92

9,73

11,53 11,41

13,25

11,40 12,07

14,04 14,33 14,87

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Erzeugung, Transport, Vertrieb Konzessionsabgabe EEG-Umlage* KWK-Aufschlag §19-Umlage Offshore-Haftungsumlage Stromsteuer

Electricity prices for industrial customers

also rise considerably due to levies and taxes

0,19

0,08 0,11

Average electricity prices for the industry in Cent/kWh (including electricity tax) Annual consumption 160 to 20,000 MWh (Supply at medium voltage level; feed-in 100kW/1,600h to 4,000kW/5,000h)

0,09 0,11

0,13 0,11

0,05

0,11

0,05

0,11

0,05

0,11

0,05

0,11

0,05

0,11

0,05

0,11

0,05

0,11

0,11

0,05

0,11

0,05

0,11

0,03

0,11

0,07 0,04

0,11

0,10 0,07

0,17

0,15

0,26 0,31

* From 2010 application of the Ordinance on a Nationwide Equalisation Scheme Sources: VEA, BDEW; As of: 05/2013



Most industrial firms have to pay for

renewable energies…

Sources: BDEW (own calculation based on forecast data for EEG apportitionment 2013 of 15/10/2012), BAFA, Stat. Bundesamt

96%

4%

44,865

industrial

firms

Full EEG apportitionment:

rd. 43,000 industrial firms

1,638 businesses/business units benefit from the special equalisation scheme

under Article 16 EEG

* Economic activities defined in sections B (mining and quarrying) and C (manufacturing),

German Classification of Economic Activities, 2008 edition (WZ 2008)

96% of all industrial firms in

Germany pay the full levy

(2013: 5,277 ct/kWh) for the

renewables energy act (EEG)!



…but there are some exceptions:

96%

4%

44,865

industrial

firms

Full EEG apportitionment:

rd. 43,000 industrial firms

1,638 businesses/business units benefit from the special equalisation scheme

under Article 16 EEG

Only 4% of all industrial firms in

Germany pay a reduced levy for

the renewables energy act (EEG):

• electricty intensive industrial

firms (e. g. steel, aluminium,

chemical base materials, paper)

• costs for electricity have to

exceed 14% of the gross value

added

• >1 GWh yearly consumption

• Additionally: Railways

• International competition…

* Economic activities defined in sections B (mining and quarrying) and C (manufacturing),

German Classification of Economic Activities, 2008 edition (WZ 2008)

Sources: BDEW (own calculation based on forecast data for EEG apportitionment 2013 of 15/10/2012), BAFA, Stat. Bundesamt



Financial reliefs for power-intensive industry

EEG 2013: Who will be „relieved“?

47%

25%

8%

4%

16%

243.1 TWh

Source: BDEW (own calculation based on EEG 2013 forecast data of 15/10/2012)

Full EEG apportionment/5.277 ct/kWh:

113.8 TWh

Limited EEG apport.

0.05 ct/kWh: 60.6 TWh

Reduced EEG apport.

1%/0.05277 ct/kWh: 20.9 TWh

Reduced EEG apport.

10%/0.5277 ct/kWh: 9.9 TWh

Full EEG apportionment for nearly half of the industrial electricity consumption!

Without exeptional rules according to §40 EEG 2012, the surcharge in 2013

would be 4.23 ct/kWh, thus 1.05 ct/kWh lower.

Industrial electricity consumption in 2013 according to EEG forecast 2013: 243,1 TWh

Relief from EEG apportionment according to §37 EEG: Industries

consuming approx. 30-40 TWh from own electricity generation plants



Total burden of taxes and levies

2,00 2,00 2,05 2,04 2,08 2,15 2,22 2,07 2,09 2,14 2,17 2,16 2,11 2,15 2,15 2,15 0,28 0,26 0,90 1,15 1,63 1,91 2,30 2,92 3,73 4,30 4,88 5,27

8,33

13,35 14,11

20,36

0,61 0,99 0,67 0,76 0,77 0,85 0,79 0,70 0,52 0,63

0,45

0,15 0,26

0,41

0,44

0,81 0,85

1,82

3,36 4,32 5,10

6,53 6,60 6,46 6,27 6,35 6,26 6,28

6,17

7,25 6,97

7,00

2,3 4,1

6,9 8,5

9,5 11,4 11,9 12,3 12,9 13,5 13,8 14,3

17,1

22,9 23,9

31,6

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012** 2013**

Concession fee EEG apport.*** KWK surcharge §19 surcharge Offshore surcharge**** Electricity tax***** * Burden of VAT 2011 rd. 7.5 bn Euros

** Provisional estimation

*** until 2009 additional costs versus energy exchange price; from 2010 application of the Ordinance on a Nationwide Equalisation Scheme; 2012/2013 according to EEG

apportitionment forecast

**** 2013: Estimation

***** 2012/13: according to AK „Steuerschätzung“ (committee for tax estimation of the Federal Ministry of Finance), May 2013 Source: BDEW, As of: 05/2013

Total electricity price burden in billion Euros (without VAT*)



International Prices of energy



CWE Nordic

CEE

700

1100

2000

800

600 2300

1000

800

2200

900

4165 2575

3200

3500

285

1300

(2600)

1200

1000

610 1500 600

CSE

SWE

UK-CH

CWE – Central Western Europe

CEE – Central Eastern Europe

CSE – Central South Europe

SWE – South Western Europe

Integration of the European energy exchange until

2014 and beyond…

Targets of market integration in the

European energy exchange:

By end of 2014: European Day-ahead

trade (implicit auction and price

coupling)

Intra-day trade of excess capacities on

an integrated market platform

Establishment of a cross-border

electricity balancing market



International energy prices for the industry:

Electricity industry 5

,01

5,1

2

5,3

0

6,9

8

7,5

0

8,1

8

8,2

9

8,4

2

8,4

4

8,6

7

8,7

4

8,7

6

9,0

3

9,0

9

9,1

6

9,4

7

9,6

6

9,9

6

9,9

7

10

,01

10

,70

10

,96

11

,10

11

,31

11

,51

12

,84

12

,88

20

,09

US

A

No

rwa

y

New

Zea

lan

d

Isra

el

Sw

ed

en

Fin

lan

d

Den

ma

rk

Me

xic

o

Lu

xe

mb

ou

rg

Neth

erl

an

ds

Fra

nce

Po

lan

d

Gre

ec

e

Slo

ve

nia

Gre

at

Bri

tain

Sw

itzerl

an

d

Hu

ng

ary

Belg

ium

Tu

rke

y

Po

rtu

gal

Sp

ain

Ire

lan

d

Ch

ile

Ge

rma

ny

Czec

h R

ep

.

Slo

va

kia

Ja

pan

Ita

ly

Pri

ce

in

€c

en

t/k

Wh

2011

Source: International Energy Agency (IEA); consumption not clear * Exchange rate US$/Euro average 2011



International energy prices for the industry:

Gas industry 11

,09

14

,36

17

,09

24

,34

25

,55

26

,22

27

,14

27

,72

30

,63

31

,39

31

,59

32

,51

35

,99

36

,11

36

,13

36

,56

37

,06

39

,12

40

,29

41

,97

43

,32

50

,04

52

,06

Ca

na

da

US

A

New

Zea

lan

d

Tu

rke

y

Gre

at

Bri

tain

Be

lgiu

m

Sp

ain

Neth

erl

an

ds

Po

lan

d

Hu

ng

ary

Ire

lan

d

Fin

lan

d

Lu

xe

mb

ou

rg

Po

rtu

gal

Slo

va

kia

Cze

ch

Re

p.

Fra

nce

Ge

rma

ny

Gre

ec

e

Slo

ve

nia

So

uth

Ko

rea

Sw

ed

en

Sw

itzerl

an

d

Pri

ce

in

Eu

ro/M

Wh

gro

ss

ca

lori

fic

va

lue

2011

Source: International Energy Agency (IEA); consumption not clear * Exchange rate US$/Euro average 2011



Summary



Summary

Problems:

Uncertainty (security of supply, prices, market design…)

What will be our future market design (including Renewables)?

European Framework conditions not precise enough

Growing prices for energy

International competition of German economy

Economic pressure on germans small (but many) industrial champions



Summary

Hope:

Growing awareness of the challenges we are facing.

Financial reliefs for companies under competition.

Still: Germany‘s energy security of supply is one of the best in the world.

Innovation: Energiewende is one of the most interesting and challenging industrial projects of our time.



BDEW

German Association for Energy and Water Industries

Reinhardtstraße 32

10117 Berlin

Phone +49 30 / 300199-0

www.bdew.de

Thank you for your attention!


energy transitions in france and germany - cgemp

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