V O I C E O F F U T U R E G E N E R A T I O N S

International Reactions to the

German Transition and

International Best Practices

V O I C E O F F U T U R E G E N E R A T I O N S

AGENDA

26 September 2012 2

How was the German energy transitionreceived internationally?

What other countries provide best practicesfor an energy transition?

How does the international policy landscapefor RE look like?

V O I C E O F F U T U R E G E N E R A T I O N S

KEY ELEMENTS OF THE GERMAN ENERGY TRANSITION

EnergyTransition

1) Nuclear phase out

2) RE targets (RE energy: 60% by 2050)

3) Diversification of energy market

4) Decentralisation of energy production

5) Plant is where energy source is

26 September 2012 3

V O I C E O F F U T U R E G E N E R A T I O N S

REACTIONS TO GERMANY‗S ENERGY TRANSITION

• This Energiewende is being watched very closely. If it works in Germany, it will be a template for other countries.

• "The German Energy Experiment"

• Key questions raised:

Can a heavily industrialized country power its economy with wind turbines and solar panels?

Who should pay this in times of financial crisis?

• Only little attention for underlying factors like decentralization/ empowerment aspects

26 September 2012 4

V O I C E O F F U T U R E G E N E R A T I O N S

26 September 2012 5

How was the German energy transitionreceived internationally?

What other countries provide best practicesfor an energy transition?

How does the international policy landscapefor RE look like?

V O I C E O F F U T U R E G E N E R A T I O N S

GERMANY IS NOT ALONE WITH PHASING OUT

NUCLEAR POWER

Europe

– Ireland, Denmark, Austria, and Norway had dismissed the nuclear option years ago

– Sweden, Switzerland, the Netherlands, and Belgium are in the process of phasing out nuclear power.

– Spain has banned the construction of new reactors.

– France's government (14th Sept 2012) begins a review one of the world's most nuclear-dependent country's energy policy, strongly in support of its small and ailing renewables sector in an effort to boost local jobs and growth.

• Other remarkable country’s decisions

– Japan (14th Sept 2012): "We will use all possible political resources to realize the goal of having no nuclear plants operating by the end of the 2030s," the report from the government's energy and environmental committee said.

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V O I C E O F F U T U R E G E N E R A T I O N S

RE SHARES: TOP FIVE COUNTRIES

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Source: Global Status

Report 2012

V O I C E O F F U T U R E G E N E R A T I O N S

AMBITIOUS TARGET SETTING – A KEY POLICY

• Countries with a 100% RE target– Denmark: 100% RE by 2050 in power, heating, and transportation sector

– Scotland: 100% RE in power sector by 2020

– Upper Austria: 100% RE in power and heat sectors by 2030

• Cities with 100% RE target– Barcelona, Spain - Masdar City, UAE

– Munich, Germany - Msheireb Downtown Doha, Qatar

– San Francisco, USA (sustainable downtown regeneration project)

• Small Island States with 100% RE target– Islands of Tuvalu - Maledives

– Cook Islands

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V O I C E O F F U T U R E G E N E R A T I O N S

UK - BEST PRACTICE FOR ENERGY TRANSITION?

Change of Policy led to substantial increase of RE share

Before April 2010 :Quota obligations based on

Tradable Green Certificates

After April 2010Feed-in tariffs

Source:

The UK FiT: A User Survey

Miguel Mendonça, 2011

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V O I C E O F F U T U R E G E N E R A T I O N S

FITS ENABLE PARTICIPATION

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“It [FiTs] is evidently acting as a connecting policy – linking people, policy, energy and economy.“

Miguel Mendonca: The UK FiT: A User Survey, 2011Source: Co-operative renewable energy in the UK, Rebecca Willis and Jenny Willis 2012

V O I C E O F F U T U R E G E N E R A T I O N S

ONTARIO - BEST PRACTICE FOR ENERGY

TRANSITION?

robust regime for encouraging renewable electricity generation while maximizing the local economic benefits of this new power generation, because of the following elements:

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domestic content provision

community project price adders

Special program for small scale projects

50,000 jobs (by 2018) and dozens of new manufacturing plants

V O I C E O F F U T U R E G E N E R A T I O N S

AGENDA

26 September 2012 12

How was the German energy transitionreceived internationally?

What other countries provide best practicesfor an energy transition?

How does the international policy landscapefor RE look like?

V O I C E O F F U T U R E G E N E R A T I O N S

POLICY INSTRUMENTS -

REGULATIONS AND INCENTIVES ?

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Type of instrument Formal Market Informal Organisational

Examples in the

field of

renewable

energy

Regulation

Feed-in tariffs (can

also be seen as

regulatory)

Advice Public enterprises

Self-regulation User chargesInformation

provision

Public Private

Partnerships (PPP)

Regional

development

plans

Congestion charge

Network between

cities to share

renewable energy

strategies

Climate and

energy agency

Environment

impact

assessment

Land use taxesAwareness raising

campaign

Unit for climate

change and energy

in mayor’s office

Based on Howlett (2009)

V O I C E O F F U T U R E G E N E R A T I O N S

POLICIES ARE THE DRIVING FORCE

• 118 countries had renewable energy targets in place (by early 2012)

– more than half are developing countries

• Most common type of support policy: Renewable power generation

policies: at least 109 countries (by early 2012)

• Feed-in-tariffs (FITs) and renewable portfolio standards (RPS) are the

most commonly used policies

• At least 19 countries have specific renewable heating/cooling targets in

place and at least 17 countries and states had obligations/mandates to

promote renewable heat. (frontrunner Europe)

• Lack of long-term policy certainty and stability result in setbacks

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Source: Global Status Report 2012

V O I C E O F F U T U R E G E N E R A T I O N S

15

Costs and pricingdistortion from subsidies for fossil fuels; nuclear energy;externalities; high initial capital costs; high taxes on renewable energy equipment

Legal and regulatoryNo legal framework for independent power producers; planning restrictions (long lead times); lack of coordination amongst authorities; spatial planning, grid access (grid capacity, grid extension plans)

Market performancelack of access to credit; perceived technology uncertainty and risk; lack of technical or commercial skills and information

Usual obstacles to progress at the renewable energy sector

V O I C E O F F U T U R E G E N E R A T I O N S

Feed in tariffs in 1995

Source: IFOK/REN 21

V O I C E O F F U T U R E G E N E R A T I O N S

Source: IFOK/REN 21

Feed in tariffs in 2000

V O I C E O F F U T U R E G E N E R A T I O N S

Source: IFOK/REN 21

Feed in tariffs in 2010

V O I C E O F F U T U R E G E N E R A T I O N S

Implement regulatory

frameworks

consequently

Research and

Development

(and its political support)

Abolishment of all

subsidies for fossil fuel

(and nuclear)

Acceleration of

administrative processes

and infrastructure

measures

Strengthen

renewable heating

sector

Binding target setting

on regional,

national and

international level

Notwendige Politische Maßnahmen für die EnergiewendeNeeded political measures for the energy transformation

V O I C E O F F U T U R E G E N E R A T I O N S

Thomas Edison 1920:

―We are like tenant farmers

chopping down the fence

around our house for fuel

when we should be using

Natures inexhaustible sources

of energy — sun, wind and

tide. ...

I'd put my money on the sun

and solar energy. What a

source of power! I hope we

don't have to wait until oil and

coal run out before we tackle

that‖

V O I C E O F F U T U R E G E N E R A T I O N S

GLOBAL MARKET AND INDUSTRY OVERVIEW

• Global final energy consumption supplied by renewable

energy in 2010: 16.7%

– 8.2%: modern renewable energy (counting hydropower, wind, solar, geothermal, biofuels and modern biomass)

– 8.5 % traditional biomass (primarily for cooking and heating in rural areas of developing countries)

• Continued growth in equipment manufacturing, sales, and

installation across most technologies during 2011

• Globally there are more than 5 million jobs in renewable

energy industries

Source: Global Status Report 2012

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V O I C E O F F U T U R E G E N E R A T I O N S

INVESTMENT FLOWS

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Global new investment in

renewable energy increased 17%

in 2011, to a new record of USD

257 billion.

= more than six times the figure for

2004

= 94% more than the total in 2007

V O I C E O F F U T U R E G E N E R A T I O N S

GROWTH RATES BY TECHNOLOGY

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Source: Global Status

Report 2012

V O I C E O F F U T U R E G E N E R A T I O N S

100% RE Scenarios

• Germany Federal Environment Agency: 100% RE in Germany by 2050

• Greenpeace: 100% RE in Germany by 2050

• McKinsey: 100% RE in Europe by 2050

• PWC: 100% RE in Europe and North America by 2050

• European Renewable Energy Council (EREC): 100% RE in Europe by 2050

• Jacobson/ Davis, Stanford University: 100% RE in the world by 2030

BUT: political and regulatory challenges

Pre-condition: Enabling Policy Framework

V O I C E O F F U T U R E G E N E R A T I O N S

The WFC builds its work on the expertise and networks of Councillors

worldwide

The Council consists of fifty highly

respected personalities represented in

governments, civil society, business,

science, education, and the arts

V O I C E O F F U T U R E G E N E R A T I O N S

26

Academic research, sufficiently understanding the challenges and their interdependency, identification and development of best policies to cope efficiently and quickly with the challenges

Awareness raising, making the legislation/politicians and the public aware of what needs to be done and how it could be done

Political Engagement/Advocacy, educating, consulting/engaging legislation/politicians what to implement and how

Political Empowerment/Enabling Legislation, developing tools to empower legislation/politicians to introduce the policies in question

Step 1

Step 2

Step 3

Step 4

The WFC working process to achieve our

objectives

V O I C E O F F U T U R E G E N E R A T I O N S

27

WFC

Principles

and Values

Climate/

Energy

A world of

climate

stability

Future

Justice

A world of

justice

Sustainable

Ecosystems

A world of

stewardship

Sustainable

Economies

A world of true

wealth

Peace and

Disarmament

A world at

peace

1

2

3

4

5

The five interacting programs of the WFC

V O I C E O F F U T U R E G E N E R A T I O N S

Department Climate Energy

26 September 2012 28

V O I C E O F F U T U R E G E N E R A T I O N S

Decentralization – sharing benefits