Headline Germany‘s Experienceswith the „Energiewende“Nedbank and EE Publishers’ seminar “#EnergyTransition4.0 - A seminar on unlocking a just energy transition in South Africa “

Sandton, 7 May 2019

Rüdiger Lotz, Deputy Head of Mission, German Embassy Pretoria

The Energiewende combines security of supply, cost-effectiveness and environmental protection

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Environmentallysound Affordable and

cost-effective

Secure andreliable

The energy transition triad combines efficiency, direct use of renewables and sector coupling

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Efficiency firstDirect use of renewables

Sector coupling

Germany is in a unique position to drive forward the transformation of the energy system in Europe

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Electrical neighbours Germany at a glance

• Population: 82 million

• Largest economy in Europe,4th largest in the world

• Gross electricity production

2016: 648.4 TWh

• Primary energy consumption

2016: 13,383 PJ

The Energiewende is Germany’s long-term energy and climate strategy

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2020 2030 2040 20502025 2035 2045

.Energy Efficiency

% greenhouse gas reduction (vs. 1990)

% gross electricity consumption

Final energy productivity (vs. 2008)

Primary energy demand in buildings (vs. 2008)

Primary energy consumption (vs. 2008)

% gross final energy consumption

Final energy consumption in transport (vs. 2005)

Climate

RenewableEnergy

-40

-55 -70 -80 to -95

+2.1% p.a. (2008-2050)

35 40 to 4550 65

8055 to 60

1830

4560

-20 -50

-10-40-15 to -20

-80

27.6%(2016)

36%

14.8%(2016)

-6%

1.1% p.a.(2016)

-15.9%(2015)

+1.3%(2015)

Achieved 2017

4,380 PJ(2008)

.Energy Efficiency

% greenhouse gas reduction (vs. 1990)

% gross electricity consumption

Final energy productivity (vs. 2008)

Primary energy demand in buildings (vs. 2008)

Primary energy consumption (vs. 2008)

% gross final energy consumption

Final energy consumption in transport (vs. 2005)

Climate

RenewableEnergy

40

5570 80 to 95

+2.1% p.a. (2008-2050)

35 40 to 45 6580

18 30 45 60

-20-50

-10 -40-15 to -20

-80

27.7%

36.2%

14.8%(2016)

-6.0%

1.1% p.a.(2016)

-18.3%(2016)

+4.2%(2016)

Germany plans to complete its nuclear phase-out by 2022 and have a low-carbon economy by 2050

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The energy transition involves all levels of government, the business community and society

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Monitoring report “Energy of the Future”

Federal and state coordination Chancellor / Minister-Presidents of the Länder

In charge of the EnergiewendeFederal Ministry for Economic Affairs and Energy

Stakeholder Dialogue

Energy Efficiency Platform

Electricity Market Platform

Buildings Platform

Research and Innovation Platform

Energy GridsPlatform

0

4

8

12

16

Ton

nes

of

CO

2p

er c

apit

a

Percentage of global population

Global average: 4.9 t CO2 per capita

Per capita carbon emissions of some western economies are still twice as high as those of China

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Ger

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USA

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Res

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Ru

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Mid

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Form

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ovi

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epu

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Lati

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Ind

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4.9

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18

.8%

16

.6%

17

.9%

12.9

%

2.8

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3.0

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5.9

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2.0

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4.7

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2.0

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1.1

%0

.4%

0.4

%

6.1

%

*excluding Russia and EU members

**Rest of Europa includes IS, NO, CH and the Balkans

Additional climate protection measures needed to close mitigation gap in 2020 and 2030

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0

200

400

600

800

1000

1200

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1990 2015 2016 2017* 2020 2020 2025 2030 2030 2035

[mill

ion

to

ns

of

CO

2 e

qu

ival

ent]

targets energy industry agriculture industry

commerce/trade/services transportation households waste & wastewater

Development of greenhouse gas emissions 1990 to 2035: Actual emissions by 2017 and projected emissions

806

(-36%)751

(-40%) 682

(-46%) 563.4

(-55%)

*preliminary values

2020: projection vs. target2030: projection vs. target

The Energiewende enjoys wide support within the German population

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solar thermal solar PV heat pump financialparticipation

in REinstallation

electricvehicle

battery(storage)

CHPinstallation

planned

stock

Participation of German households in Energiewende

technologies (in %)

89%

8%

3%

Do you support the

Energiewende? 75% - The Energiewende is a joint task to which everyone in

society must contribute

14% - I think that the Energiewende is a good thing, but I cannot

or do not want to contribute much to it

Yes

I don’t know

No

In June 2018, the German government mandated the Commission „Growth, Structural change and Employment“ to solve the ongoing political conflict around the future role of coal

The German Commission on „Growth, Structural Change and Employment“

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The commission was staffed with 31 members rather representing social, economic and environmental interests than scientific expertise

The German Commission on „Growth, Structural Change and Employment“

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Expert commission appointed by the German government recommended coal phase-out by 2038

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up

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Inst

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2000 2020 2040

Coal power plants in Germany

2030

2038Coal phase out

Security reserve

9.1 GW

2.9 GW 5.9 GW

Hard coal

LigniteBy 2020: decommissioning / transition to security reserve

Coal capacity reduced to 17 GW

20302016GW

40

20

60

Expected development of coal generation capacity

2022Coal capacity reduced to 30 GW

Decarbonising our energy systems leads to an increased electrification of all sectors

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1. Germany is very active in sharing its experiences with other countries to learn from the good but also still improvable experiences with the Energiewende.

2. The German „Energiewende” shows that it is possible for an industrialized country to transform its entire power and also energy sector sustainably.

3. Even with 38% share of renewables in the power sector, the lights in Germany did not go out and – for the last years – electricity costs remain stable and affordable.

4. The Energiewende has positive effects on job creation, innovation and other macroeconomic aspects.

5. Germany has made progress but more action is needed to achieve German climate mitigation targets.

6. Germany now ventures into a “just” coal exit by 2038 taking all stakeholders and groups of society with it.

Summary and Outlook

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Headline

Thank you for your attention

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Implementation of the Energiewende follows a defined strategy

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The Energiewende forms part of an integrated European energy and climate strategy

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Renewables reduce dependence on energy imports

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0

10

20

30

40

50

60

70

80

90

100

-

10

20

30

40

50

60

70

80

90

100

1990 2000 2010 2020 2030 2040 2050

% o

f to

tal f

inal

en

ergy

co

nsu

mp

tio

n (

RES

tar

get)

% o

f to

tal p

rim

ary

ener

gy s

up

ply

renewables (RES)

lignite

hard coal

gas

oil

other

oil imports

gas imports

hard coal imports

nuclear

RES target (final energy, right axis)

Dependence on imports

domestic production

60% RES target (final energy)

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The EU’s “winter package” aims at deepening European integration in the field of energy

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Governance Regulation

Revision of the Renewable Energy Directive

Revision of the Energy Efficiency Directive

Electricity market design

Each Member State is required to present a national energy and climate action plan for 2021-2030

Binding EU-wide target of 30% renewables in final energy consumption, min. 14% renewables in transport by 2030

Binding EU-wide target of 32.5% increase in energy efficiency by 2030, commitment to put energy efficiency first

Set the course for free price formation throughout Europe to generate investment and create greater flexibility

EU reduced the need for fossil fuels by +10% in 2005-2015 through renewable energy deployment

Ensuring security of supply for gas and electricity

The Energy Union project aims at creating a common electricity and gas market in the EU

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Key dimensions of the Energy Union

Statusof the Energy Union

Establishing an internal energy market By 2017, 30 out of 42 EU borders participated in day-ahead market coupling (electricity)

Raising energy efficiency Collective efforts in 2015 were above linear trajectory to achieve energy efficiency target in primary energy consumption (20% increase by 2020).

GHG emission reduction (20% decrease) target for 2020 already met (23% reduction achieved by 2016)

35% of global patents in renewables come from the EU

Decarbonizing the economy

Conducting energy research

The EU and Germany have set themselves mid-and long-term climate and energy targets

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Germany EU

Targets 2020 2030 2050 2020 2030 2050

GHG emissions

Greenhouse gas emissions compared to 1990 levels (in all sectors)

-40% -55% -80 to -95% -20% -40% -80 to -95%

Increase of the renewable energy share in energy consumption

% gross final energy consumption

18% 30% 60% 20% 32%

Reduction of energy consumption and increase in energy efficiency

Primary energy consumption -20% (vs. 2008)

-50% (vs. 2008)

20% (increase in

energy efficiency vs. BAU)

32.5% (increase in

energy efficiency vs. BAU)

The international energy transition is embedded in a multilateral framework

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IREC: International RenewableEnergy Conferences

The Energiewende forms part of an integrated European energy and climate strategy

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The monitoring process has been set up to track the energy transition on a continuous basis

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Monitoring Report

Annual review of the status of

implementation of the energy transition reforms

Reviewed by an independent commission

of experts

Progress Report on the energy transition

Published every three years

Provides recommendations for future implementation

The Commission’s proposal is a framework, aiming to both allow for Germany meeting its climate targets as well as allow for a Just Transition

Expert commission recommended accompanying measures

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