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									Energy Law Spring 2004




                         Germany
                                      Huzaifa Husain
                                      Volker Bergner
                                      Jamie Lipsey
                                      Onsiri Sodabanlu


                           02/26/04
Agenda
       Primary Sources and Energy Consumption
       Nuclear Phase Out
       Renewables
       Energy Policy
                 Climate Change
                 Supply Security
                 Economic Efficiency
       Future
Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu   02/26/04
    Primary Energy Consumption by Source
                                                                           (CAGR: -0.35%)
                       Nuclear
                                                                                                      Nuclear   Other
Hydropowe              Pow erOther                     Hard Coal                                                        Hard Coal
                                                                                                      Pow er    2.3%
r and Wind              11.2% 0.8%                       15.5%                                                            13.2%
                                                                                                       12.6%
  Power
  0.4%                                                                                 Hydropower
    Natural                                                                             and Wind                              Lignite
      Gas                                                                                   Power                              11.6%
     15.5%                                                                                   0.9%
                                                                       Lignite
                                                                        21.5%               Natural
                                                                                              Gas
                                                                                             22.0%

                                                                                                                        Mineral Oil
                      Mineral
                                                                                                                          37.5%
                        Oil                                   1990                              2002
                       35.1%
           Source: Arbeitsgemeinschaft Energiebilanzen, own analysis
           Note: Electricity trade balance was excluded

    Energy Law Spring 2004
    H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu                                02/26/04
Primary Energy Consumption by Sector
                    Commercial
                   and Services,                                    Consumption
                      11.7%                                         and Losses
                                                                   w ithin Energy
                                                                   Sector, 29.9%
        Residential
        Use, 16.0%                                                                                         2002
                                                                         Non-energetic
                                                                         Consumption,
                                                                             6.4%           Commercial             Consumption
              Transport,                                                                   and Services,           and Losses
                16.0%                                           Mining and                    10.6%               w ithin Energy
                                                               Manufacturing                                      Sector, 28.2%
                                                                 , 20.0%                   Residential
                                                                                           Use, 18.9%                     Non-energetic
                                           1990                                                                           Consumption,
                                                                                                                              7.4%

                                                                                                                           Mining and
                                                                                         Transport,
                                                                                                                          Manufacturing
                                                                                           18.7%
                                                                                                                            , 16.3%


       Source: Arbeitsgemeinschaft Energiebilanzen, own analysis
       Note: Electricity trade balance was excluded

Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu                                  02/26/04
 Electricity Generation by Source

                                                                    Hard Coal         CAGR: -0.08%
              Nuclear
                                                                      23.4%
              Pow er
               30.6%
                                                                                                         2002
   Water
  and Wind                                                                                                           Hard Coal
    1.6%                                                                                   Nuclear                     22.3%
                                                                                           Pow er
Natural             Other                                                                   33.5%
 Gas                solid                                      Lignite
 0.4%               Fuels                    Fuel Oil           33.1%
                     1.2%                     2.0%                               Water and
                                                                                   Wind
                                                                                   3.1%
                                      1990                                                                                 Lignite
                                                                                                                            29.1%
                                                                                                  Other
                                                                                      Natural
                                                                                                solid Fuels     Fuel Oil
                                                                                       Gas
        Source: Arbeitsgemeinschaft Energiebilanzen, own analysis
                                                                                                   1.7%          1.2%
        Note: Electricity trade balance was excluded                                   0.9%
 Energy Law Spring 2004
 H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu                                  02/26/04
Nuclear Phase Out

       Nuclear power makes up 30% of electricity
        generation
       June 11, 2001 – Government and nuclear
        industry agree to phasing nuclear plants
       Each nuclear plant will be shut down after 32
        years in operation
       By 2021, Germany is scheduled to be nuclear-
        free
       Final repositories must be operational in 2030

Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu   02/26/04
Renewable Energies Potential

       Target: Double renewables share by 2010
                 No detailed targets for each renewable
                 Main efforts: wind power, solar energy and
                  hydropower
                 Governmental incentives spurred growth
                 Utilities promote renewables to end-users
       Long-term potential: 50% of electricity
        generation (2050)

Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu   02/26/04
Renewable Energies

       1991 Electricity Feed Law (amended 1994)
          Forces utilities to buy all electricity from IPP

          Feed in price calculated as % of retail electricity
           price
       1998 Energy Industry Act
          Ceiling for quantity of electricity from renewables

       2000 Renewable Energy Act
          Guaranteed feedin prices (cost-based) until 2020

          Sharing of burden among network operators

Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu   02/26/04
Energy Policy Objectives


                          1.             Environmental Compatibility &
                                         Externalities
                          2.             Supply Security
                          3.             Economic Efficiency
                          4.             Nuclear Phase Out




Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu        02/26/04
Environmental Compatibility

Energy Dialogue 2000
 Climate Change Mitigation

 Promotion of Energy Efficiency

 Continue use of Domestic Coal & Lignite

 Promoting Renewable Energies

 Creating a level playing field for energy
  companies
 Creating more competition in energy market

Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu   02/26/04
Climate Change

       Centerpiece of Germany’s Energy Policy
       Issues:
                       Nuclear power phase-out
                       Coal subsidies

       Emissions Reductions Targets:
                       National – Reduce C02 25% by 2005
                       Kyoto – Reduce greenhouse gases 21%
                        between 2008 and 2012

Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu   02/26/04
Climate Change & Externalities
Methods to Combat Climate Change
                 Voluntary agreements with Industry
                 Taxes
                           Ecological Tax Reform, aka the Eco-Tax
                                      Motivation: Theory of Two Dividends
                                      Limited impact on labor market
                                      Inefficient internalization of externalities
                                      Beneficial treatment for some energy sources
                                      Exemption rules for energy-intensive industries
                           Tax-incentives for low-emission cars and houses
                 Technology
                           Renewables and Co-Generation


Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu              02/26/04
Supply Security

       Reduce import dependency by Promoting
                 Indigenous Fossil Fuel
                 Renewable Energy
                 Energy Conservation
       Adequate Energy Infrastructure
       Market Liberalization
       Secure Domestic Production
Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu   02/26/04
Economic Efficiency


       Technical and Financial Support Project
       Industry
                 Voluntary agreements
       Residential & Building
                 Regulatory measures
       Transportation
                 Voluntary agreements
                 Gasoline to Diesel in passenger vehicle
                 Promotion of rail transportation

Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu   02/26/04
The Future
       GHG emission reductions on track
                 Replacement of Nuclear energy will be a challenge
       Aspiring renewables growth goals

       Reduce coal subsidies
                 Economic and social consequences
       Reform ineffective energy excise tax system
       Promote similar measures in EU and G7 countries




Energy Law Spring 2004
H. Husain, V. Bergner, J. Lipsey,O. Sodabanlu   02/26/04

								
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