Renewable Energy Sources Act (EEG) Key features, development and perspectives

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1 Renewable Energy Sources Act (EEG) Key features, development and perspectives Nicolas Oetzel Federal Ministry for the Environment, Nature Conservation and Nuclear Safety Division KI III 1, General and Fundamental Matters of Renewable Energies Berlin, 18. November 2010

2 Outline 1. Development of renewable energies in Germany 2. Renewable energy sources Act (EEG) 3. Perspectives

3 40 Renewable energy sources as a share of energy supply in Germany ) Share in [%] Gross final energy consumption ) Share of RES in total final energy consumption (electricity, heat, fuels) Share of RES in total gross electricity consumption 3.6 German Government targets ) Share of RES in total energy consumption for heat ) Share of RES in fuel consumption for road traffic Targets according to Directive 2009/28/EC Share of RES in total primary energy consumption 3) 4) 1 ) Sources: Energy Concept of German Federal Government, and Renewable Energies Heat Act (EEWärmeG), ; 2) Source: EU-Directive 2009/28/EC on the promotion of the use of energy from renewable energy sources, target for the share of energy from renewable energy sources in gross final consumption of energy and of the final consumption of energy in transport; 3) Total consumption of engine fuels, excluding fuel in air traffic; 4) Source: Working Group on Energy Balances (AGEB); RES: Renewable Energy Sources; Source: BMU-KI III 1 according to Working Group on Renewable Energies-Statistics (AGEE-Stat); Image: BMU / Brigitte Hiss; as at: September 2010; all figures provisional BMU KI III 1 Development of renewable energy sources in Germany in

4 Development of electricity generation from renewable energy sources in Germany , ,000 Hydropower Biomass * Wind energy Photovoltaics EEG: January 2009 Electricity generation [GWh] 80,000 60,000 40,000 StromEinspG: January March 2000 Amendment to BauGB: November 1997 EEG: April 2000 EEG: August , * Solid and liquid biomass, biogas, sewage and landfill gas, biogenic share of waste; Electricity from geothermal energy is not presented due to the negligible quantities of electricity produced; StromEinspG: Act on the Sale of Electricity to the Grid; BauGB: Construction Code; EEG: Renewable Energy Sources Act; Source: BMU-KI III 1 according to Working Group on Renewable Energies-Statistics (AGEE-Stat); Image: BMU / Christoph Edelhoff; as at: September 2010; all figures provisional BMU KI III 1 Development of renewable energy sources in Germany in

5 Renewable Energy Sources Act (EEG) Key features (1) Priority access for RE to the power grid Priority transmission and distribution Obligation of grid operators to purchase the electricity produced from RE Fixed price ( tariff ) for every kilowatt hour produced from RE for 20 years All different types of RE are considered and tariffs are differentiated by source and size of the plant

6 Renewable Energy Sources Act (EEG) Key features (2) Additional or special payment Bonuses (e.g. for technology, innovative procedures, CHP, energy crops, system service, early bird bonus) Initial tariff - Basic tariff (wind energy) Annual decrease (0-9%) of the tariff due to technical development (degression) Growth corridor for solar energy, additional increase/decrease of degression Equalisation of additional costs for electricity from renewable energy

7 Feed-in tariffs for installations in 2010 (according to EEG amendment 2010) 2010 ct/kwh Degression Hydropower 3,47 12,67 0%, 1% Landfill gas, Sewage gas, Mine gas 4,10 8,87 1,5% Biomass ø17,0 1% Geothermal 10,40 15,84 1% Wind energy (onshore) 9,11 1% Wind energy (offshore) 13,0 0% Solar energy 24,26 33,03 9%

8 Feed-in and payment under the Electricity Feed Act (StromEinspG) and the Renewable Energy Sources Act (EEG) in Germany 11,000 10,000 9,000 8,000 7,000 Feed-in under StrEG [TWh/a] Feed-in under EEG [TWh/a] Payment of fees [mill. EUR] EEG: April EEG: August 2004 EEG: 60 January 2009 [Mill. EUR] 6,000 5,000 4,000 3,000 2,000 1,000 0 StromEinspG: January March Amendment to BauGB: November [TWh/a] StromEinspG: Act on the Sale of Electricity to the Grid; BauGB: Construction Code; EEG: Renewable Energy Sources Act; Source: BMU-KI III 1 according to Working Group on Renewable Energies-Statistics (AGEE-Stat); Image: BMU / Bernd Müller; as at: September 2010; all figures provisional BMU KI III 1 Development of renewable energy sources in Germany in

9 EEG costs Strong increase of renewable energies in 2009/2010 leads to higher EEG costs 2010: average EEG apportionment is about 2 ct/kwh 2011: average EEG apportionment will be 3,5 ct/kwh (estimation) Increase of 70% Reasons: high deployment of solar energy and biogas (bonuses) 2011: sample household with 3500 kwh/a pays EEG costs of about 10 Euro/month (2009: 3,40 Euro, 2010: 6 Euro) debate on EEG costs

10 Amendment of the EEG in 2010 (only with regard to solar energy) Strong increase of deployment of solar energy Strong decrease of costs of photovoltaic systems Amendment of the EEG in July and October 2010 immediate total decrease of tariff: 11 16% Abolition of tariff for cropland New growth corridor: MW/a; new additional degression rates 2011: 4% total degression: 13% as from 2012: -7,5% +12% total degression: 1,5% - 21% Support for own consumption: split tariff for installations up to 500 kwh

11 Perspectives EEG Implementation of the RES-Directive until end of 2010; only minor amendments of the EEG Currently evaluation of the EEG Progress report in 2011, Basis for amendment of EEG on Focal points of amendment in 2012: increase of electricity target for 2020 (at least 30% 35%) cost efficiency market and grid integration of renewable energy Following options will be examined for the amendment in 2012, e.g.: introduction of an optional market premium or a consistency bonus for virtual power plants reduction of EEG bonuses

12 Perspectives Renewable Energy (1) Energy Concept Energy Concept: comprehensive energy strategy until % reduction of GHG emissions Renewables should account for the biggest share in future energy mix New targets for renewable energies until : 18% RES 35% RES-E 2030: 30% RES 50% RES-E 2040: 45% RES 65% RES-E 2050: 60% RES 80% RES-E

13 Perspectives Renewable Energy (2) Energy Concept Focal points and new measures for renewable energies, e.g. 5 bn credit programme for offshore wind energy Nationwide grid expansion planning Cluster connections of offshore wind farms Expansion of storage capacities, e.g. biomass Sustainable and efficient use of bioenergy Reliable Financing Monitoring

14 Total CO 2 avoidance via the use of renewable energy sources in Germany million t Electricity million t Heat million t Biofuels Total: approx. 108 million t CO 2, from this approx. 54 million t CO 2 by EEG quantity of electricity recompensed CO 2 avoidance [million t] Hydropower Windpower Biomass Photovoltaics Geothermal energy Solar thermal energy Biofuels EEG: Renewable Energy Sources Act; deviations in the totals are due to rounding; Source: UBA according to Working Group on Renewable Energies-Statistics (AGEE-Stat); Image: H. G. Oed; as at: September 2010; all figures provisional BMU KI III 1 Development of renewable energy sources in Germany in

15 Jobs in the renewable energy sector in Germany 2004, 2007, 2008 and 2009 Wind energy 63,900 85, ,100 95,600 Biomass 56, , , ,500 Solar energy 25,100 49,200 80,600 77,600 Waterpower 7,800 7,900 8,100 9,500 Increase: approx. 112 % Geothermal energy Public / non-profit sector jobs 14,500 14,700 10,300 1,800 6,500 4,900 4,500 3, ,500 employments 277,300 employments 322,100 employments 339,500 employments ,000 40,000 60,000 80, , , ,000 Figures for 2008 and 2009 are provisional estimate; deviations in totals are due to rounding; Source: BMU-KI III1: "Erneuerbar beschäftigt! Kurz- und langfristige Arbeitsplatzwirkungen des Ausbaus der erneuerbaren Energien in Deutschland"; Image: BMU / Christoph Busse / transit; as at: September 2010 BMU KI III 1 Development of renewable energy sources in Germany in

16 Investments in the construction of renewable energy installations in Germany 2009 Hydropower 70 Mill. EUR Total: approx Bill. EUR Geothermal energy * 1,000 Mill. EUR Solar thermal energy 1,250 Mill. EUR Biomass heat 1,350 Mill. EUR Biomass electricity 2,100 Mill. EUR Wind energy 2,650 Mill. EUR Photovoltaics 12,000 Mill. EUR BMU KI III 1 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 [Mill. EUR] * Large plants and heat pumps; deviations in the totals are due to rounding; Source: BMU-KI III 1 according to the Centre for Solar Energy and Hydrogen Research Baden-Wuerttemberg (ZSW); as at: September 2010; all figures provisional Development of renewable energy sources in Germany in

17 Turnover from the operation of plants for the use of renewable energy sources in Germany 2009 Total: approx Bill. EUR Geothermal energy 4 Mill. EUR Hydropower 1,350 Mill. EUR Biogenic solid fuels * 1,700 Mill. EUR Photovoltaics 3,150 Mill. EUR Biofuels 3,150 Mill. EUR Wind energy 3,400 Mill. EUR Biomass electricity 4,300 Mill. EUR ,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 * Only fuels used exclusively to supply heat; Geothermal energy is not shown in this figure, because of the small turnover by operation (EUR 4.0 million); deviations in the totals are due to rounding; Source: BMU-KI III 1 according to the Centre for Solar Energy and Hydrogen Research Baden-Wuerttemberg (ZSW); as at: September 2010; all figures provisional [Mill. EUR] BMU KI III 1 Development of renewable energy sources in Germany in

18 Conclusions Renewable energies have experienced a strong growth in Germany The reasons: ambitious targets, efficient policies and instruments, long-term planning security Benefits of renewable energies: climate protection, job creation, economic growth, avoided energy imports Next steps and challenges: cost efficiency, particularly regarding solar energy market and grid integration of renewable energies expand grid and storage capacities sustainable and efficient use of bioenergy cooperation among EU Member states

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