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PowerGen Asia 2014, Kuala Lumpur, September 11, 2014
Energy Turnaround in Germany –
a role model for Asia?
Volkmar Pflug, VP Strategies, Sector Energy
Peter Klüsener, Senior Consultant, Sector Energy
4 All rights reserved.
© Siemens AG 2013
siemens.com
Table of content
1
Targets of German Energy Policy
2
Current Situation in Germany
3
Challenges of the Energy System
4
Role Model for Asia?
© Siemens AG 2014 All rights reserved.
Page 2
September 2014
PowerGen Asia 2014
1
Targets of German Energy Policy
Ambitious targets and far-reaching
legislation are part of the German “Energiewende”
Targets of German “Energiewende”
Energy Mix in Power Generation
Renewables

24%
2013 ̴ 950 Mt CO2e
(-22% vs. 1990)
Mt CO2e
Share of gross power
generation
Energy Efficiency
GHG-Emissions

1.253
250
-40%
35%
80%
Fossil
896
385
50%
Power
20%
5%
2020
2030
2050
 Share of Renewables in power
generation 35% by 2020, 50% by 2030
and 80% by 2050
 Share of renewables in net power
consumption 2012: 24%
 Nuclear phase-out by 2022
Sector
357
1990
214
2020
179
2030
-50%
September 2014
251
50
179
71
2050
Primary Energy
Consumption
0
2008
2050
 GHG emission reduction compared to  Reduction of primary energy
baseline 1990: -40% by 2020, -60& by
consumption by 50% versus 2008 up
2030 and -80% by 2050
to 2050.
 Decarbonization of power sector as
 Improvement of energy productivity
a long-term goal, but targets not
by 2.1% p.a.
specified
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Page 3
150
100
538
60%
2013
+2.1% p.a.
564
61%
Nuclear 15%
-80%
752
Energy
productivity
200
-55%
50%
Other
Index (2008 = 100)
PowerGen Asia 2014
2
Current Situation in Germany
The energy mix in power sector shifted significantly,
Renewables mainly replaced Nuclear power
Gross electricity generation (in TWh)
Nuclear power plant capacity (GW, gross)
first step: shut down of 8 reactors (-8.8 GW) as
an immediate response on Fukushima accident
21.5
12.7
11.3
10.0
2013 Total: 628 TWh *)
Gas
Hard Coal
8.5
19.8%
4.3
147 TWh
10.6%
32%
0.0
2010
2012
2014
2016
2018
2020
23.2%
Renewables
2022
Energy mix in power generation (TWh)
Renewables
627
100
607
624
628
119
139
147
25.8%
Lignite
15.5%
/Waste
21%
Solar
37%
Wind
10%
5.1%
Biomass
Hydro
Oil, Other
Nuclear
Fossil
386
Nuclear
380
386
384
141
108
100
97
2010
2011
2012
2013
*) w/o Hydro Pump Storage
Source:BDEW; Arbeitsgemeinschaft Energiebilanzen, BMWi
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September 2014
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2
Current Situation in Germany
Record level of wind and solar PV installations since
more than one decade
Installed capacity for Wind and Solar (GW)
70.5
Solar PV
63.9
Wind
54.1
44.7
36.3
20.4
2.1
2013 Renewable Installations:
23.5
2.9
26.4
29.9
6.1
4.2
32.4
36.9
25.0
17.6
• Nearly 37 GW of Solar PV (about 5 7 GW of annual capacity additions in
the last 4 years)
10.6
27.2
18.4
25.7
33.7
23.8
31.6
22.2
29.1
20.6
2005
2006
2007
2008
2009
2010
2011
2012
2013
• nearly 34 GW of Wind power (thereof
0.6 GW offshore so far)
2013 Global Solar PV installed capacity
Germany
Total 140 GW
37 GW
(26%)
• Germany is the biggest Solar PV
market in terms of cumulated
installed capacity. But new
installation in China of about 12 GW
in 2013 have set a new record.
103 GW
(74%)
Rest of World
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September 2014
Source: BNetzA, BDEW, IEA, EPIA
PowerGen Asia 2014
2 Current Situation in Germany
High standard of power sector in terms of
sustainability and reliability
Carbon intensity in power sector (in kgCO2/kWh)
0.8
1.200
-1.7%
0.7
1.050
-1.2%
0.6
0.55
0.5
Shift from Coal to Gas,
increasing Nuclear
0.4
0.3
0.550
Renewables installations,
ongoing shift from Coal to Gas
(together counterbalance
decreasing Nuclear)
0.600 0.620
0.440
0.2
1990
1995
2000
2005
2010
2015
Germany EU
USA South China Russia
Korea
Non-availability (in minutes per year)
1.320
526
16
Germany
51
37
Austria
Italy
Record level of availability in
German power system compared
to other countries
66
France
USA
China
Source: IEA, BDEW
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September 2014
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3
Challenges of the Energy System
Flexible backup power required to compensate the
fluctuation of wind and solar power
Impact of Wind Power (example week February 2012)
Wind Power 2012:
03.01.2012, 17h
Maximum feed-in: 24.1 GW, about 35% of total load
Fluctuation between 0.1 and 24.1 GW per hour
Total supply 45 TWh (= 7.3% of annual generation)
Mo
Mo
Di
Do
Di
Mi
Sa
14.09.2012, 13h
Mi
Do
Fr
Fr
Sa
So
Combined Wind and Solar Power:
Maximum feed-in: 31.8 GW, about 45% of total load
So
Impact of Solar PV (example week May 2012)
Maximum hourly load ramps: +/- 5.9 GW per hour
25.05.2012, 13h
Solar Power 2012:
Maximum feed-in 24.4 GW, about 30% of total load
Fluctuation between 0 and 24.4 GW per hour
Mo
Di
Mi
Do
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September 2014
Fr
Sa
So
Total supply 28.5 TWh (= 4.6% of annual generation)
Source: enervis, EPEX
PowerGen Asia 2014
3
Challenges of the Energy System
Collapse of CO2 allowance price pushed power
generation by coal and therefore emissions again
CO2 allowance spot price (€/t CO2)
25
Carbon pricing in Europe:
20
• European Emission Trading System
(ETS) established since 2005
Oversupply of certificates caused
collapse of CO2 price
15
• In general too generous offering of
certificates resulted in a quite low CO2 price
in history
10
5
• Oversupply as a consequence of non
required certificates due to low energy
demands in recent past caused a collapse
of CO2 price
0
1/1/11 7/1/11 1/1/12 7/1/12 1/1/13 7/1/13 1/1/14 7/1/14
Generation shifting to coal again
372
in TWh
527
3%
29%
7% 2%
-19%
302
305
317
323 CO2 Emission
(in MtCO2)
+6%
627
607
624
628
17%
20%
23%
24%
22%
14%
5%
18%
14%
16%
12%
4%
4%
15%
11%
42%
43%
44%
46%
1990
2010
2011
2012
2013
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September 2014
Nuclear
• Carbon price too low to really stimulate
clean technologies by itself
Gas
Oil/Other
59%
© Siemens AG 2014 All rights reserved.
Renewables
• Current carbon price promotes power
generation from coal, while gas plants
suffer from low load factors
Coal
Source: BMWi, BDEW
PowerGen Asia 2014
3
Challenges of the Energy System
First step of nuclear phase-out completed without
impact on supply security due to comfortable capacity
Development of spark spread for CCPP (€/MWh)
Constellations:
• Renewables push back conventional plants
in merit order
• Lowered load factors of conventional plants in
recent past and they will even more decrease
• Average wholesale price reduced (esp. peak
load price at noon time caped by solar PV)
• Spark spread for conventional plants
insufficient or even negative
Secured capacity / system load balance (GW gross)
175
170
184
195
.
206
Renewabl
Fossil
Nuclear

85
85
max. load
89 84 GW
22
13
13
13
2010
2011
83
2012 2013
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September 2014

81
2013: No gap in dispatchable capacity after first
wave of shut-down of Nuclear power plants
2022: Reserve margin expected to get stressed
when all Nuclear plants decommissioned
2022
Source: BDEW, own analysis
PowerGen Asia 2014
3
Challenges of the Energy System
EEG levy in Germany is projected to reach a maximum
level of 7.28 €ct/kWh after 2020
EEG levy – Historic development and projection up to 2030
[€ct/kWh]
10
8
7,20
6,95 7,10 7,15 7,28 7,20 7,02
6,92 6,78
6,67 6,80
6,44
6,24
6,08
5,74
5,28
5,11
6
4,10
4
2
3,53 3,59
2,05
1,02 1,16 1,31
0,51
0,88
0,69
0,25
0,42
0,35
0,20
0
2000
2005
2010
2015
Source:BDEW, BNetA, BMU, Prognos, Siemens own calculations
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September 2014
PowerGen Asia 2014
2020
2025
2030
Challenges of the Energy System
Affordability: Power Prices in Germany already far
above European average
Power prices in Germany and other European countries in 2012 (€ct/kWh)
26.0
23.3
Households
+38%
21.9
21.3
18.9
13.9
13.9
16.8
15.0
14.2
13.1
9.1
8.5
17.0
19.2
+20%
14.2
Industry
3
Deutschland
13.0
8.3
EU27
Belgien
Bulgarien
11.2
13.3
13.8
11.3
14.3
12.5
10.2
5.2
Frankreich
Griechen- GroßItalien
land britannien
Polen
Spanien
Tschechien
Türkei
USA
German Households are paying already 38% and Industry 20% above European average
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September 2014
Source: BDEW, Eurostat, Arbeitsgemeinschaft Energiebilanzen, Siemens
PowerGen Asia 2014
4
Role Model for Asia?
Lessons need to be considered to make the German
‚Energiewende‘ a role model for Asia
Issues with German Energy Transition
Lessons learnt for Asia
 Overinvestment in Renewables through feed-in
tariffs imposed long-term burdens for subsidies on
electricity consumers
 Secure affordability of energy/electricity prices
through optimized energy mix and proper market
regulation
 Surge of electricity prices due to high Renewables
subsidies and grid expansion
 Energy policy needs to create market mechanisms
to foster investment in reliable low-carbon back
up capacities
 Collapse of CO2 price pushed power generation to
Coal again resulting in increasing CO2 emission
 Insufficient revenues from power-only market for
conventional power plants  lack of investment in
reliable power generation capacity
 Missing incentives for required flexible gas-fired
power plants for stabilization of power system
 Integration of record level of Renewables would
require expansion of transmission grid capacity
 Stabilize power system through sufficient
investment motivation in flexible gas-fired power
plant capacity
 Provide adequate power transmission capacity
fast enough to link renewables resources and
consumer areas
 Coal-to-gas shift to be promoted as a huge lever
for reduction of CO2 emissions (economics
stimulated by a stable CO2 price)
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