christoph menke - lessons learnt from german feed-in tariff policy

8/6/2019 Christoph Menke - Lessons Learnt From German Feed-In Tariff Policy

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Lessons learnt from GermanFeed-in Tariff Policy

for policy approaches in ASEAN countries

Asia Clean Ener Forum 2011

04.07.2011 Seite 1

04.07.2011 page 1

June 20 21, 2011 in Manila

Prof. Dr.Ing. Christoph Menke

University of Applied Science, Trier, GermanyJoint Graduate School of Energy and Environment, Bangkok,

ThailandSenior Consultant for Renewable Energy Policy, GIZ GmbH,

Germany


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Reduction of CO2 emissions by 80% until 2050

Availability of Oil & Gas in 40 years questionable

Foreign exchange requirement for imported fuels

Framework Conditions for Energy Future:

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2 Nuclear? No option for most countries

We have to go for 100% RE electricity in the longrun!

If we want this by 2050, we need to start now!


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New business opportunities especially for SME

Employment, jobs and income for people

More independence from oil price fluctuations

Additional pension fund for people

RE is much more than CO2 reduction:

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Is that really possible or is this a Green Dream?

Germany: 2010 = 17% RE electricity; 2050 = 80%! In Bavaria last year 30 000 new PV plants built!

150 000 new jobs created in last 5 years!


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Scenario 2010- 2030 Germany (Guiding Scenario 2010)

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Beitrag der erneuerbaren Energien zur Stromerzeugungin Deutschland

80.000

100.000

120.000

]

Wasserkraft Windenergie

Biomasse * Photovoltaik

EEG:

April 2000

EEG:

August 2004

EEG:

Januar 2009

Contribition from RE Electricty to German grid (about 18% now)

04.07.2011 Seite 504.07.2011 page 5

BMU KI III 1Development of renewable energy sources in Germany in 2009 5

0

20.000

40.000

60.000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

[G

W

* Feste und flssige Biomasse, Biogas, Deponie- und Klrgas, biogener Anteil des Abfalls; 1 GWh = 1 Mio. kWh;

Aufgrund geringer Strommengen ist die Tiefengeothermie nicht dargestellt; StromEinspG: Stromeinspeisungsgesetz; BauGB: Baugesetzbuch; EEG: Erneuerbare-Energien-Gesetz;

Quelle: BMU-KI III 1 nach Arbeitsgruppe Erneuerbare Energien-Statistik (AGEE-Stat); Bild: BMU / Christoph Edelhoff; Stand: Mrz 2011; Angaben vorlufig

StromEinspG:

Januar 1991 - Mrz 2000

Novelle BauGB:

November 1997


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Entwicklung der Anzahl und installierten Leistung vonWindenergieanlagen in Deutschland

20.000

25.000

30.000

hl[-]

20.000

25.000

30.000

Anlagenanzahl, kumuliert [-]

installierte Leistung, kumuliert [MW]

Novelle BauGB:

November 1997

StromEinspG:

Januar 1991 - Mrz 2000

27.204 MW

Development of wind power installations in number and in MW in Germany

04.07.2011 Seite 604.07.2011 page 6


405

700

1.0

84

1.6

75

2.4

67 3.5

28

4

.326

5.1

78

21.5

85

20.9

71

20.1

51

19.3

44

18.5

78

17.4

74

16.5

18

15.3

71

13.7

39

11.4

15

9.3

59

7.8

61

6.1

85

0

5.000

10.000

15.000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Anlagen

za

0

5.000

10.000

15.000

[M

W]

Quelle: J. P. Molly, "Status der Windenergienutzung in Deutschland", Stand: 31.12.2010;

Deutsches Windenergie-Institut (DEWI) und Bundesverband WindEnergie e. V. (BWE); 1 MW = 1 Mio. Watt; Bild: BMU / Brigitte Hiss; Angaben vorlufig

EEG:April 2000

EEG:

August 2004EEG:

Januar 2009


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Entwicklung der Stromerzeugung und installierten Leistungvon Photovoltaikanlagen in Deutschland

12.000

14.000

16.000

18.000

12.000

14.000

16.000

18.000

Energiebereitstellung [GWh]

installierte Leistung [MWp]

17.320 MWp

Development of PV installations in number and in MW and GWh/a

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12.0

00

6.5

78

4.4

20313

556

1.2

82

2.2

20

3.0

75

1 2 3 6 8 11 16 2632 42 64 76

162

0

2.000

4.000

6.000

8.000

10.000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

[MWp]

0

2.000

4.000

6.000

8.000

10.000

[GW

h]

Quelle: BMU-KI III 1 nach Arbeitsgruppe Erneuerbare Energien-Statistik (AGEE-Stat); 1 GWh = 1 Mio. kWh; 1 MW = 1 Mio. Watt; Bild: BMU / Bernd Mller; Stand: Mrz 2011; Angaben vorlufig


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Total Greenhouse-Gas (CO2 equiv.) avoidance via the use

of renewable energy sources in Germany 2009

16.5 29.9 22.4 3.8

1.1

Electricity72.7 million t

31.3 million t

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29.9

0.4

5.1

0 10 20 30 40 50 60 70 80

Biofuels

Heat

GHG avoidance [million t CO2 equiv.]

Hydropower Windpower Biomass Photovoltaics Geothermal energy Solar thermal energy Biofuels

5.1 million t

Total: approx. 109 million t CO2 equiv.,

from this approx. 57 million t CO2 equiv.

by EEG quantity of electricity

recompensed

GHG: Greenhouse-Gas; 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


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Total turnover from renewable energy sources in Germany2009 (investments and operation)

1,420 Mill. EUR

1,004 Mill. EUR

Hydropower

Geothermal energy *

Total: approx. 37.5 Bill. EUR

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12,600 Mill. EUR

6,050 Mill. EUR

16,400 Mill. EUR

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000

Solar energy **

Biomass

Wind energy

[Mill. EUR]* Large plants and heat pumps; ** Photovoltaics and solar thermal energy; 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


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Jobs in the renewable energy sector in Germany2004, 2008 und 2009

56,800

63,900

95,800

85,100

87,100

74,400

109,000

79,600

Solar energy

Biomass

Wind energy

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3,400

9,500

4,300

9,300

6,500

9,300

9,000

25,100

1,800

9,100

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000

Geothermal energy

HydropowerIncrease: approx. 87 %

Public / non-profit -sector jobs

Figures for 2008 and 2009 are provisional estimate;

Source: BMU-KI III Projekt "Gross employment from renewable energy in Germany in the year 2009, a first estimate"; Image: BMU / Christoph Busse / transit; as at: September 2010

2004 2008 2009

160,500

employments

278,000

employments

300,500

employments


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Clear Regulation of the interactions between private marketparticipants

Priority access for RE electricity delivery to the grid

Right to connect to the grid can not be refused

Shallow cost pricing principle for connection to nearest grid line

Long term Financing: 20 years payment for each kWh

Lessons Learnt (LL): Preconditions for FiT (1):

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FiT differs for each RE technology FiT is size specific, sometimes even site specific (wind)

Tariffs are degressive, depending on technology developmentprogress and year of start of operation

FiT is regularly reviewed, Assumed: IRR only: 6 - 8%!

No need for a PPA, banks accept future FiT payments

Reduced red tape: by clear rules, setting up clearing house


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Make sure local people/communities and SME canparticipate in RE market!

In Germany private people invested in 15 000 MW PV mainly asaddition to their pension fund

Communities invest in local wind parks to generate local tax andincome

LL: Preconditions for successful FiT (2):

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nsure ear y s a e o er commun ca ons w us ness anwith civil society, so both support the RE development

Develop local/national industry:

FiT is the precondition to develop a national RE industry

FiT is a low entry barrier for new business, esp. SME to enter market

But remember: It took Germany nearly 20 years to developits RE Markets!


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No caps, but clear targets, which are regularly adopted

Caps lead to distortion and prevent market development

Actual FiT that is valid on date of completion of project, not on day ofsigned PPA, but new FiT only after 12 months

Better: FiT degression as function of realized targets

Strong monitoring of the market behavior is required

Stakeholder consultation with rivate sector and consumer rou s

LL: Preconditions for successful FiT (3):

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Support of academic institutions to monitor/study RE

Need for clarifying the macro economic advantage of FiT

Clarify external costs of conventional power & subsidies for power

Evaluate & publish side effects: jobs & economic growth Financing of FiT through surplus to electricity rates makes it

independent from national budgets & tax discussion (Spain)

Avoid Stop and Go policy! Continuity is required


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FiT is the most stable, long term financial scheme

To allow private market development especially SMEs

To lower project costs as it reduces the risk in RE investments

You need to develop the infrastructure for RE market dev. But it needs to discussed which RE technologies are most

appropriate for each country

Lessons Learnt for ASEAN (1):

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.

To lower the costs of RE projects needs time

Service industry needs to be developed and ensured to stay in themarket (Thailand)

Invest in capacity building/institutions Need for local academic involvement to monitor RE market and

assist in adjustment of regulations

Develop national centers of excellence in RE /EE


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In the long term: Restructuring of energy grids and energymarkets is required

Grid integration & system services are required in future

Dont expect, that national/big utilities are in favor of it! They will obstruct development as long as possible through red

tape in the administration of grid access, excessive pricing, notpassing through benefits of e.g. merit-order effect, etc.

Lessons Learnt for ASEAN (2):

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Because they might loose market shares and influence But RE is the chance for SME und civil society for regional

economic development, jobs and additional income

Be prepared for a constant adjustment of FiT rules

Because of technology changes, especially in PV Changes of commodities, like steel, financing costs, etc.

=> Therefore build up monitoring of the RE market developmentthrough academic sector / stakeholder consultation process


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Avoid the pitfalls and the myths

Avoid the pitfalls and the myths:

1. RE electricity is a burden to consumer2. PV and Wind power is not predicable

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. 2

4. Nuclear is a solution...5. We can wait until RE technologies are cheaper


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FiT is the policy tool to support regionaleconomic development and to create jobs!

It requires:1. Long-term financial framework: Feed-In Tariff2. Access to reasonable long term loans3. Transparent procedures / administrative rules4. Monitoring of regulation and market behavior

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5. Establishment of stakeholder dialog:Government, Utilities, Private Sector & Consumer Groups

6. Technology Transfer7. Capacity Building

GIZ is active in this as an international partnere.g. Vietnam, Thailand, The Philippines and ACE /ASEAN


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RE Support Programme for ASEAN

Cooperation : ASEAN Centre for Energy (ACE) und GIZ GmbH

Via Renewable Energy Subsector Network (RE-SSN)

Objective: Support realization of the ASEAN Plan for Action in Energy

Cooperation (APAEC) 2010-2015

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1. RE Networking

2. RE Policy

3. RE Capacity Building


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Activities: RE Networking

Set up of webpage and online newsletter

Install internet based Information Platform (iip)

Steer promotion networks

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Develop ASEAN RE networking concept

Promote ASEAN Hydropower Competence Centre (HYCOM)*


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RE Networking: HYCOM

ASEAN-RESP promotes HYCOM and its services through its

regional and international networks

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Training and expertise provided by HYCOM are expected to serve

as a role model and will be included into ASEAN-RESP capacity

building measures


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Activities: RE Policy

Promote RE financing mechanisms and bankable RE

approaches

Facilitation of intra ASEAN exchange on feasible RE financing mechanisms; focus on

the attraction of private sector investment

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Disseminate RE rural electrification approachesPromotion of best practices regarding RE rural electrification in ASEAN; focus on

successful business models and isolated/mini grids

Develop guideline for RE standards

Identification of RE technical standards in the ASEAN; aiming at develop a roadmap

on specific RE standards and potential harmonization


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RE Capacity Building

Facilitate intra ASEAN exchange of RE training institutions

Support to quality ensurance and improvement of RE curricula through train-the-

trainer measures and regional exchange

Conduct RE ractitioner trainin s

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Conduction of demand oriented practitioner trainings for regional participants

Facilitate the setup of ASEAN RE Competence Centres

Support to further ASEAN RE Competence Centres (need/demand based approach!)


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Project 1: Legal Framework for Wind Power

o Project goal: Establishment of a Legal Framework

and Improvement of Technical Capacities for Grid-Connected Wind Power Development

GIZ activities in RE Policy in Vietnam

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Project 2: Renewable Energy Agency

o Project goal: Support to the build-up of anRenewable Energy Agency for the promotion of

renewable energy

Both supported by BMU, Germany


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Thank you for your kind attention!

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ro . r. ng. r s op en e

University of Applied Science, Trier, Germany

Joint Graduate School of Energy and Environment, Bangkok, Thailand

Senior Consultant for Renewable Energy Policy, GIZ GmbH, Germany

[email protected]

christoph menke - lessons learnt from german feed-in tariff policy

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