The integration of wind energy when paving the way for renewables in Germany

Similar documents
Germany's energy transition: Status quo and Challenges.

The Energiewende in the Power Sector: State of Affairs 2014

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

The energy transition in the power sector: State of affairs 2015

The Energy Transition in Germany Past, Present and Future

Germany's renewable energy sector in the context of energy transition.

The German Energy transition State of Play of Renewable Energies

Understanding the Energiewende

Power in Germany: The turning point of 2011

PHOTOVOLTAICS IN THE GERMAN POWER SYSTEM

Energiewende made in Germany - Economic Value and Energy Security -

THE AMENDED RENEWABLE ENERGY SOURCES ACT 2014 (EEG 2014)

Danish Energy Model RE Policy Tools MAIN Asian Dialog, Bali January Mr. Henrik Breum Special Advisor

Heating technology mix in a future German energy system dominated by renewables

Security of electricity supply

ACCELERATING GREEN ENERGY TOWARDS The Danish Energy Agreement of March 2012

Green and Secure. Challenges of increasing RES feed-in from a TSO perspective and from a power market point of view. René Müller

Biogas - Trends in Germany Biogas as a key in future energy systems

Development of renewable energy sources in Germany 2014

Smart Grids initiative. Electrical Engineering Institute of Renewable Energies Dipl.-Wirtsch.-Ing. Alexander von Scheven 1

Fact Sheet on China s energy sector and Danish solutions

Summary of the Impact assessment for a 2030 climate and energy policy framework

1. EXECUTIVE SUMMARY AND KEY RECOMMENDATIONS

German energy policy: Its impact nationally and across Europe Presentation at the Sanea Lecture in Rosebank, Johannesburg, 24 February 2015

THE GERMAN ENERGIEWENDE CHANCES, CHALLENGES AND OUTLOOKS

THE GREEN ELECTRCITY MARKET IN DENMARK: QUOTAS, CERTIFICATES AND INTERNATIONAL TRADE. Ole Odgaard Denmark

RE-POWERING MARKETS Market design and regulation during the transition to low-carbon power systems

Development of Renewable Energy Sources in Germany 2014

One year after Fukushima Germany s path to a new energy policy

Recent developments of feed-in systems in the EU A research paper for the International Feed-In Cooperation

2. The German energy transition is driven by citizens and communities.

Success story: Feed-In Tariffs Support renewable energy in Germany

The German Energy Transition

Technical challenges and R&D in the field of electricity supply systems

US-GERMAN CLEAN ENERGY LEADERSHIP SERIES

Offshore Wind: some of the Engineering Challenges Ahead

FRAUNHOFER INSTITUTE FOR SOLAR ENERGY SYSTEMS ISE

TOWARDS AN AUCTION SYSTEM FOR RENEWABLE ENERGY REMUNERATION: KEY POINTS PAPER PUBLISHED

Germany. Key issues. 1. General overview

Power Generation. Lilian Macleod Power Supply Manager National Grid

Denmark s commitment to 100% renewable energy

Foratom event 29 April 2015

Perspectives for ESS in Germany and Europe legal situation and applications StoREgio energy storage system association

Renewable Energy Sources (RES) Support Levels, 2009

GERMANY AS A SOLAR ROLE MODEL FOR THE WORLD?

Netherlands National Energy Outlook 2014

Anita Rønne. Análisis del marco normativo de las redes inteligentes en Europa The European legal framework for smart grids

A macro-economic viewpoint. What is the real cost of offshore wind? siemens.com / wind

Berlin, June 14, nd Annual Electricity Price & Load Forecasting Forum June Tim Buber

OUTLOOK FOR NATURAL GAS IN EUROPE

OFFSHORE WIND ENERGY IS GETTING CHEAPER

The Power Market Pentagon

International Solar Energy Arena January 23rd, 2009, Istanbul STEAM (Strategic Technical Economic Research Center)

Future Energy Systems

Renewable energy sources penetration in most of BSEC countries

CA Energy Efficiency Directive

Transformation of the energy system in Germany challenges and opportunities for regional development

Financing Hydrogen Projects Business cases and political support

Germany s energy transition (and implications for Australia)

UFZ Discussion Papers

FINDING YOUR CHEAPEST WAY TO A LOW CARBON FUTURE. The Danish Levelized Cost of Energy Calculator

Preparatory Paper on Focal Areas to Support a Sustainable Energy System in the Electricity Sector

Contents. Wind power sector facts. Growth drivers. Immediate challenges. Innovative and global response

The Renewable Energy Sector in Cyprus

R&D in Vattenfall Johan Söderbom

State of the art of solid biomass technologies in Germany

French support schemes for biogas

SPANISH EXPERIENCE IN RENEWABLE ENERGY AND ENERGY EFFICIENCY. Anton Garcia Diaz Economic Bureau of the Prime Minister

GERMAN ENERGY TRANSITION: BEST PRACTICES IN SECURING A RELIABLE AND EFFICIENT ENERGY SUPPLY AND SEIZING NEW MARKET OPPORTUNITIES

1. EXECUTIVE SUMMARY AND KEY RECOMMENDATIONS

Energy Consumption Increases Slightly in Renewables Continue to Grow / Advantages Due to Weather, Economic Trend, and Immigration

SMARTGRID Roadmap 1.

The debate on market design in the EU energy policy

Canada A Global Leader in Renewable Energy Enhancing Collaboration on Renewable Energy Technologies

Role of Natural Gas in a Sustainable Energy Future

Wind Power and District Heating

VISION FOR SMART ENERGY IN DENMARK Research, Development and Demonstration

Smart Energy Systems Energy Efficient Buildings and the Design of future Sustainable Energy Systems

PATHWAYS TOWARDS A 100 % RENEWABLE ELECTRICITY SYSTEM. Summary for policy makers

"Renewable Energies in NRW- Opportunities and Challenges "Erneuerbare Energien in NRW - Chancen und Herausforderungen

Cooperative Solar Power in Germany and Mauritius Port Louis, 15. Nov 2013 Dipl.-Ing., Dipl.-Volksw. Dieter Seifried,

Merit Order of Energy Storages by 2030 The Impact of Technological Megatrends on Future Electricity Prices. Berlin, November 27, 2012

Denmark Country Report

Comparison of Recent Trends in Sustainable Energy Development in Japan, U.K., Germany and France

Direct consumption and power purchase Experience with New Business Models in Germany. Bundesverband Solarwirtschaft e.v.

Trends und Innovationen für ein Energiesystem der Zukunft Prof. Dr. Michael Weinhold, CTO Energy Management Division, Siemens AG Fraunhofer ISE,

The Challenge of the Energy Transition

Challenges and Scenarios for Transmission Systems in Germany and Europe

COMMISSION STAFF WORKING DOCUMENT. Country Factsheet Germany. Accompanying the document

Making the energy transition in Germany successful by pumped storage expansion

Consulting the grid code

FINANCING OF LOW-CARBON ENERGY TECHNOLOGIES

Economic Potential of the Power-to-Heat Technology in the 50Hertz Control Area

Monitoringreport in accordance with 63 Abs. 3 i. V. m. 35 EnWG and 48 Abs. 3 i. V. m. 53 Abs. 3 GWB As of January 2014

Hugh Sharman, Bryan Leyland and Martin Livermore December 2012

European energy market reform Country profile: Germany

Nagel:Renewable Energy in Europe

An attractive investment case for EU renewables NO CARBON EMISSIONS, NO FUEL COSTS AND STRONG DRIVERS FOR CONTINUED GROWTH

Busting Myths about Renewable Energy

Renewable Power - Denmark 2012

Transcription:

The integration of wind energy when paving the way for renewables in Germany EER Academic Seminar No. 6 COPENHAGEN (DTU) 6 NOVEMBER 2015

Agora Energiewende Who we are Think Tank with 20 Experts Independent and non-partisan Project duration 2012-2017 Financed with 14 Mio. Euro by Mercator Foundation & ECF Mission: How do we make the energy transition in Germany a success story? Methods: Analyzing, assessing, understanding, discussing, putting forward proposals, Council of Agora

Agora Energiewende How we work Stakeholder Team of Agora Council of Agora Impulse Team Germany Director Team Europe Central Services Impulse Regular exchange and changing advisory committees in different projects Studies, public events etc. Internal discussion and exchange of the 28 permanent members

Agora Energiewende Council of Agora Holger Krawinkel Prof. Dr. Klaus Töpfer Science Chair Dr. Hildegard Müller Public Utilities Dr. Patrick Graichen Federal Politics Dr. Martin Iffert Energy Sector Energy-Instensive Industry 27 Mitglieder StS Rainer Baake Dr. Boris Schucht Renewable Energies Regional Politics Min Franz Untersteller Grid operators Regine Günther Sales Environmental Associations Federal Authorities Trade Unions European Union Wolfgang Lemb

The Energiewende in the power sector in a nutshell

The Energiewende means fundamentally changing the power system Gross electricity generation 1990, 2014 und 2050 Phase out of Nuclear Power Gradual shut down of all nuclear power plants until 2022 Reduction of Greenhouse Gas Emissions Reduction targets below 1990 levels: - 40% by 2020; -55% by 2030; - 70% by 2040; - 80% to -95% by 2050 Development of renewable energies Share in power consumption to increase to: 40-45% in 2025; 55-60% in 2035; 80% in 2050 AGEB (2015a), BReg (2010), EEG (2014), own calculations * preliminary Increase in efficiency Reduction of power consumption compared to 2008 levels: -10% in 2020; -25% in 2050 6

The Energiewende implies a new energy world characterized by flexibility, decentralized structures and a wide variety of actors Illustrative visualization of the old and the new electricity system Hochspannung Mittelspannung Niederspannung Own illustration 7

Changes in the power sector State of affairs 2015

Renewables are the most important source in the electricity system followed by lignite and hard coal Share in gross electricity generation by fuel 2014 Gross electricity generation by fuel 1990-2014 AGEB (2015a) * preliminary AGEB (2015a) * preliminary 9

Nuclear phase out until 2022 with renewables overcompensating the loss in nuclear power Gross electricity generation of nuclear and renewables 1970 2025 Chernobyl Chernobyl 1. Nuclear 1. Nuclear phase-out phase-out Fukushima Fukushima Start Start Anti-Nuclear Anti-Nuclear Movement Movement Withdrawal Withdrawal of of the the 1. Nuclear 1. Nuclear phase-out phase-out 2. Nuclear 2. Nuclear phase-out phase-out AGEB (2015a), AGEE (2015), BNetzA (2014), Statistisches Jahrbuch der DDR (1973-1988), own calculations 10

The nuclear phase out is stretched over 20 years Agreed shut down of nuclear power plants according to nuclear phase out law 2000-2023 Own illustration based on energytransition.org (2014) 11

Greenhouse gas emissions are currently at -26% compared to 1990 levels with the energy sector being the largest emitter Greenhouse gas emissions by sector 1990 2014 and climate targets 2020-2050 AGEB (2015a), UBA (2015), own calculations * preliminary 12

The Renewable Energy Act aims at increasing the share of renewables to 40-45% by 2025 and 55-60% by 2035 Share of renewable energies in gross electricity consumption 2000 2014 and targets 2025-2035 AGEB (2015a), EEG (2014) * preliminary 13

Key power trends 2010 2014: Nuclear, natural gas and consumption decline, renewable energies, exports and lignite increase Changes in gross electricity generation, consumption and exchange balance, 2010 2014* AGEB (2015) * preliminary 14

Since 2001, Germany has produced more electricity than it consumes 2014 marked a new record with 6% of power production being exported to neighbouring countries Gross electricity generation and gross electricity consumption 2000 2014 AGEB (2015a) * preliminary 15

The Energiewende is based on a broad consensus - public discussion mostly on concrete implementation Voting results in the Bundestag on Energiewende Public opinion on Energiewende 2015 Deutscher Bundestag (2011) BDEW (2015a) 16

The Key Insight: It s all about Wind and Solar!

MW Wind Energy has become a mature technology, with wind turbines of 2-3 MW being standard Size development of wind turbines 1990-2015 3.5 2015: up to 3.0 MW 3.0 2.5 2.0 1.5 1.0 0.5 1990: up to 0.1 MW 1995: up to 0.3 MW 2000: up to 0.8 MW 2005: up to 1.5 MW 2010: up to 1.8 MW IEA (2013) 18

Due to falling module prices, feed-in tariffs for solar PV dropped massively in the last 10 years - and the end of the cost digression is not yet reached Average PV feed-in tariff for new installations 2005-2015 Expected cost digression for large-scale PV 2014-2050 ZSW et. al (2014), own calculations Fraunhofer ISE (2015) 19

The key insight for the Energiewende: It s all about wind and solar! Gross electricity generation of renewable energies 2000-2035 2000 2014: AGEB (2015a); 2015 2035: own calculation on basis of BNetzA (2014)/BNetzA (2015b) * preliminary 20

Which kind of actors have evolved while technology has been developing? Example: Wind energy in Germany Types of wind projects So-called Hofanlagen in the vicinity of buildings at the early beginnings in the 90ies. + Bürgerwindpark citizens wind farms & cooperatives. + Project developers. + Turnkey solutions/ funds. 1991 2000 and revisions (last revision: 2014) Feed-in Law Renewable Energy Act + Investors & institutional actors (banks, investment companies, ). 21

With wind and solar, the new power system will be based on two technologies that completely change the picture Gross electricity generation of renewable energies 2000-2035 Electricity generation and consumption in a sample week 2023 GW Specific characteristics of Wind and Solar PV 1 Intermittent 2 High capital costs 3 Very low variable cost AGEB (2015a), BNetzA (2014), BNetzA (2015b), own calculations Potential for other project developers due to smaller project sizes than largescale power stations. Fraunhofer IWES (2013) Potential for innovation! 22

Wind integration- Key challenges related to the grid

Grid Expansion: Transmission and distribution grids. Expansion of the transmission grid from North to South. Installed wind capacity (103 GW, Scenario Best Sites ) 2033 Planned transmission grid extensions until 2022 Wind power will be installed mainly near the coast in the north of Germany, but consumption centers are located in the south. Additional power lines are necessary to transport wind electricity from north to south. Acceptance issue: prioritization of cable undergrounding and compensation measures. In 2016, the government will propose a new grid development plan which will enable to use underground cables whenever necessary. Fraunhofer IWES (2013) Bundesbedarfsplangesetz (2013) Curtailment of wind (and solar PV) especially in the north. 70% of measures due to congestions in distribution grid in 2013: 555 GWh in total (<1%). Curtailment of RES-E based on 13(2) EnWG amounted to 13 GWh in 2013. New: 3% approach! Electricity Market Law 24

Excurses: Physical flow and price difference on the interconnection between Western Denmark and Germany Price difference: Price in Western Denmark minus price in Germany. Positive flow: Import to Western Denmark. Negative flow: Export to Germany. Even in 2014 and with implicit market coupling, there were situations with the flow direction being contrary to the direction incentivised by price differences. This is likely due to subsequent arrangements in the markets for ancillary services. Source: Ea Energy Analysis (2015). 25

Grid reliability: Provision of ancillary services by renewables. The German electricity system is characterized by high system stability. System Average Interruption Duration Index (SAIDI)* in Europe 2013 CEER (2015) * without exceptional events 26

Provision of ancillary services: Example of regulatory interplay for German wind power Renewable Energy Act (EEG) Reference to Ancillary Services Ordinance ( 9(6) EEG). Ancillary Services Ordinance (SDLWindV, 2009): Obligatory for wind turbines grid connected after 31 st March 2011. E VDE-AR-N 4120 Technical grid connection requirements for 110 kv (high voltage) level. VDE-AR-N 4110 Technical grid connection requirements for medium voltage level. VDE-AR-N 4105 Technical grid connection requirements for low voltage level. German regulation NCRfG Network Code on Requirements for Grid Connection Applicable to all Generators DCC Demand Connection Code European level Source: S. Ropenus, own elaboration In addition in German regulation: Transmission Code 2007

Wind integration - Key challenges related to the market and support schemes

Feed-In Tariff(s) Just one or how many? Technology Feed-in tariff level Annual degression Wind onshore 8.9 ct/kwh (initial feed-in tariff for at least 5 years). 4.95 ct/kwh (basic feed-in tariff). 0.4% on a quarterly basis (flexible cap: degression may increase up to 1.2% depending on higher net increase in capacity; degression may decrease to zero if too little is deployed as compared to target). Photovoltaics 9.23 ct/kwh to 13.15 ct/kwh, depending on installed capacity size. 0.5% on a monthly basis (flexible cap: degression may increase up to 2.8% depending on higher gross increase in capacity; degression may decrease to zero if too little is deployed as compared to target). Wind offshore 15.4 ct/kwh (initial feed-in tariff at least 12 years). 3.9 ct/kwh (basic feed-in tariff). Degression of initial feed-in tariff: of 0.5 ct/kwh in 2018, of 1.0 ct/kwh in 2020, by 1.0 ct/kwh annually from 2021. Biomass/ biogas 5.83 ct/kwh to 23.73 ct/kwh, depending on specific technology and installed capacity size. 1.5% on an annual basis for landfill gas, sewage treatment gas and mine gas. 0.5% for biomass on a quarterly basis (flexible cap: degression of 1.27% if annual gross increase > 100 MW). Hydropower 3.5 ct/kwh to 12.52 ct/kwh, depending on capacity size. 0.5 % on an annual basis.

Challenge: Power Market Design At the current wholesale power prices, no new power plant can be financed be it fossil or renewable Wholesale electricity prices* 2007-2014 Reasons for the decline in power prices CO 2 price dropped: CO 2 prices in the EU Emissions Trading system dropped since 2008 by around 70% due to high amount of excess certificates Falling resource prices: Coal prices decreased by a third since 2008 Merit-Order-effect: Increasing power production of renewables is pushing expensive power plants out of the market Decreasing demand: Power demand is continuously falling since 2007 (-5% by 2014) Excess capacities: Large quantities of lignite and coal power plants are pushing gas power plants out of the market EEX (2015) * rolling annual futures 30

On the way to a new Electricity Market Law (Strommarktgesetz) Green Paper White Paper Strommarktgesetz (Electricity Market Law) October 2014 July 2015 Fall 2015 - Summer 2016 (July) Referentenentwurf Entwurf eines Gesetzes zur Weiterentwicklung des Strommarktes (Strommarktgesetz) 31

Flexibility is the paradigm of the new power system baseload capacities are not needed any more Electricity generation and consumption in a sample week with 50% RES share Competition between flexibility options Flexible fossil and bioenergy power plants (incl. CHP) Grids and transmission capacities for exports/imports Demand Side Management Storage technologies (batteries, powerto-gas) Integration of the power, heat and transport sectors (power-to-heat, electric cars) Own calculations on basis of Agora Energiewende (2015b) 32

Market Model 2.0: Reliance on Energy Only Market (EOM) + new reserves to secure supply in extreme situations ( belt and braces approach ) Netzreserve ( Grid Reserve ) Security of supply and grid INTERPLAY reliability (accounting for congestions in the grid) Climate and capacity reserve Security of supply (after market closure) Capacity reserve: auction Transition period: additional function of climate reserve to contribute to reduction in emissions New! 33

Climate reserve - Implementation 34

Onshore wind high deployment, question of future development Onshore wind installed......in 2014: 4,750 MW gross installation (by comparison: corridor with net deployment of 2,500 MW) => 38 GW in total...in the first half of 2015: 1,185 MW (gross deployment; net: 1,093 MW). 42 GW onshore wind expected by industry at the end of 2015. Support: Classical feed-in tariff. EEG revision last year: Direct marketing & Contract for Difference. Offshore wind:...initially, there were some obstacles due to new technology and challenges specific to offshore wind in Germany (deep sea, high distance to shore) => initial 10 GW target by 2020 reduced to 6.5 GW....in the first half of 2015: 422 offshore wind turbines (1,765 MW) got grid connected. In total there are 668 offshore wind turbines with a total capacity of 2,778 MW. Change to tendering scheme as of 2017. 35

Challenge: Power Market Design The government is planning to propose in 2016 both a new power market law and a new renewable energy law Schematic diagram of the governments envisaged power market design Coordinate supply and demand Guarantee security of supply and build up of renewables Reaching climate targets Own illustration Power Market 2.0 (complemented by flexible markets for balancing energy) Resource Adequacy Capacity reserve (partly consisting of old lignite power plants) Renewables Auctions for large wind- and solar power plants, feed-in tariffs for small scale RES EU Emissions Trading Power Market 2.0 Power market is to become highly flexible, so as to continuously let fossil power plants, renewables, demand and storage interact with each other Resource Adequacy Peak prices in times of scarcity are to refinance fossil backup power plants; for emergency situations, a capacity reserve is installed Renewables Renewables receive 20year-market premium, support level for large wind and solar power farms is to be determined by auctions as of 2017 EU Emissions Trading CO 2 price is to be restored through ambitious EU ETS reform including enhanced market stability reserve and higher emission reduction factor 36

Common Challenges opportunity for exchange of knowledge

Lessons Learned and Energy Transitions Denmark den grønne omstilling Objective: 100% renewables across all energy sectors in 2050 (fossil fuel-free system). 50% wind share in electricity consumption by 2020 (already in 2014: 39%). Germany die Energiewende Objective: More than 80% renewables in electricity consumption by 2050. 40-45% renewable share in electricity consumption by 2025. Transition from a fossil fuel-based towards a renewable energy based system with increasing shares of variable renewable generation. Transition from a fossil fuel-based towards a renewable energy based system with increasing shares of variable renewable generation. Strong integration with the heating sector (CHP), role of wind & biomass. Wind and solar PV as main pillars. 38

Agora s Lessons Learned from Denmark Series Event 1: Renewable Energy Integration and Flexibility 24 th September 2015 in Berlin Wind power integration and the Danish flexibility experience - Report by Ea Energy Analysis Role of the heat sector System integration of wind energy Deep Dives Interconnection and cross-border market integration Event 2: Future Paths of Renewables Scenarios, the Grid and Support Schemes 12th of November in Berlin *Save the Date* - Policy Paper by Agora & DTU Management Engineering Scenarios for the future energy system and the integrated Danish approach Grid expansion and system reliability Support schemes and tendering of offshore wind 39

Agora Energiewende Rosenstraße 2 10178 Berlin T +49 (0)30 284 49 01-00 F +49 (0)30 284 49 01-29 www.agora-energiewende.de Thank you for your attention! Questions or Comments? Feel free to contact me: stephanie.ropenus@agora-energiewende.de Agora Energiewende is a joint initiative of the Mercator Foundation and the European Climate Foundation.