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The Renewable Energy Sources Act
&
The Feed-In Cooperation
RA Sonja Hemke
Maribor, May 2006
Outline
Overview of German electricity sector
Expansion Objectives
Overview of the Renewable Energy Sources Act (RE Act)
Mechanism
Achievements
The Feed-In Cooperation
Electricity Supply in Germany in 2005
Lignite
25,4%
Natural Gas
Hard Coal 11,5%
21,9%
Oil
1,9%
Others
2,4%
Nuclear Energy
26,7% Renewables
10,2%
Reference: BMU, Renewable Energy Sources in Figures, 2005
Objectives of the Federal goverment
Targets for the share of RE electricity:
2010: > 12.5 %
2020: > 20 %
Targets for primary energy supply
2010: > 10 %
2050: ~ 50%
Overview of the Renewable
Energy Sources Act
The RE Act
Gives RE priority access to the electricity grid
Obliges grid operators to purchase the RE
electricity
Fixes the price (tariff) for RE electricity
How does the RE Act work?
1. RE Act sets tariffs and pay period
2. RE producer feeds electricity into the grid
3. Grid operator pays remuneration (no state aid involved!)
4. Transfer of RE electricity and costs to the consumers
RE Act: Transfer Mechanism
Transmission
Grid
Operators
Supply
Distribution Companies
Grid Operator
Renewable
Electricity
Payment
RE Power Plant Consumers
Why different tariffs?
All types of RE are needed to reach the RE targets
Costs for RE electricity depend on different factors, e.g.
kind of RE or size of plant
Consequences:
tariffs need to be differentiated by source and size of plant
tariffs for new plants need to decrease every year to further
technological development and to bring costs down
Feed-in tariffs in Germany
2005 (Cent/kWh) Degression
(%/a)
Hydropower 6.65-9.67 0
Biomass (<20MW) 8.27-17.33 1.5
Geothermal energy (<20MW) 7.16-15.00 1.0
Wind energy (onshore) 5.39-8.53 2.0
Wind energy (offshore) 6.19-9.10 2.0
Solar energy 43.42-59.53 5.0
Degression: The tariff remains constant for commissioned installations, but depends on the
year of the initial operation. The later an RE installation is commissioned, the lower the tariff
How do we calculate the tariff ?
Scientific studies investigate specific cost per kWh.
Payback period: 16 to 20 years
Internal rate of return: e.g. wind power: ~10%
RE Electricity Generation in Germany
Reference: BMU, Renewable Energy Sources in Figures, 2005
60,000
Electricity from:
55,000
50,000 Photovoltaics
45,000 Biomass
40,000 Wind energy
35,000
[GWh/a]
Hydropower
30,000
25,000
20,000
15,000
10,000
5,000
0,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Wind Energy in Germany
30,000 18,000
Electricity generation Capacity 16,000
25,000
14,000
20,000 12,000
[GWh/a]
10,000
[MW]
15,000
8,000
10,000 6,000
4,000
5,000
2,000
0,000 0,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Photovoltaics in Germany
500 800
450 C apacity E lectricity generation
700
400
600
350
500
300
[GWh/a]
[MW]
250 400
200
300
150
200
100
100
50
0 0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Quelle: BMU, Renewable Energy Sources in Figures, 2005
Achievements (2005)
Share of RE electricity about 10% by the end of 2005
[1999: 4.6 %]
170,000 jobs
16 billion euro turnover per year
8,7 billion euro investment per year
83 million tonnes of CO2 reduction
(38 million tonnes by REA)
Cost for the Promotion of RE just 3%
Share of costs for one kilowatt hour(18 Ct)
Production,
transport and
marketing of
electricity
60%
VAT
14%
EEG
3%
Concession levy
Electricity tax CHP Act
10%
(Ecological Tax 2%
Reform)
11%
Reference: BMU, Renewable Energy in Figures, 2005
Expected Development
150
125 Erzeugte Strommenge in Mrd. kWh je Jahr
produced (billion kWh p.a.)
Electricity ab 2003: erwartete Entwicklung
[billion kWh/a]
100
75
50
25
0
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Hydro Power Wind Onshore Wind Offshore Biomass
Photovoltaics Geothermal Energy RE not included in REA Additional Costs for RE
Reference: BMU, Renewable Energy in Figures, 2005
Electricity Scenario up to 2050
700 Nuclear energy Coal/gas
Combined heat/power generation Biomass
600
Water
Hydropower Wind
Geothermal energy Photovoltaics
Imported ren. energy
500
400
[TWh/a]
300
200
100
0
2000 2010 2020 2030 2040 2050
Quelle: Fischedick, Nitsch u.a
Conclusions:
European Commisison (12/2005) „feed-in tariffs are
currently in general cheaper and more effective than so
called quota systems“, because
they give high planning and investment security
involve lower risks for the investor
cause low transaction costs
But: Success depends highly on details of regulation ->
design carefully and properly!
Different tariffs
Sufficient pay periods
Administrative framework conditions, e.g. admission regulations,
electricity grid capacity etc.
The International Feed-In
Cooperation
Cooperation on the development and promotion of a
feed-in system to increase the use of renewable energy
sources in the production of electricity
Objectives of the Feed-In Cooperation
to exchange experience on feed-in systems
to support other countries to introduce a feed-in system
to improve existing feed-in systems
to cooperate on the above mentioned issues
to increase the share of renewable energies in the overall
national and global primary energy supply
The EU Commission
European Commission, Communication COM(2005) 627
on the support of electricity from RES (from December
2005):
„The Commission considers a co-ordinated approach to support
schemes for renewable energy sources to be appropriate, based on two
pillars: cooperation between countries and optimisation of the impact of
national schemes.“
„Intensified co-ordination between countries in the form of
“cooperation” could be useful for the development of the different
support systems within Europe. The emerging cooperation between the
feed-in tariff systems in Germany, Spain and France, or on the Iberian
market and the new planned common Swedish-Norwegian green
certificate system can set examples for others.“
History
June 2004: Initiated on the Renewables2004 Conference
in Bonn, Germany as part of the International Action
Programm (IAP)
January 27th, 2005, 1st workshop in Madrid, Spain
October 6th, 2005, a Joint Declaration was signed in
Madrid between the two parties of the cooperation,
Germany and Spain.
December 15th and 16th, 2005: 2nd workshop in
Berlin, Germany: 50 representatives of the European
Commission and the European Parliament, of
governments, authorities and associations from 11 EU
Member States
2006 Next workshop in in Madrid
Membership
The Feed-In Cooperation is open to all EU Member
States.
Benefits of membership:
Impact on the agenda
More members strengthen the political weight of the
International Feed-In Cooperation
For more information, please visit:
www.feed-in-cooperation.org
Thank you for your attention!
www.erneuerbare-energien.de
www-feed-in-cooperation.org
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