page 1 international forum on low-carbon industry and green economy november 20 th 2013, beijing dr....

International Forum on Low-Carbon Industry and Green EconomyNovember 20th 2013, Beijing

Dr. Sven-Uwe MuellerHead of Energy Sector, Director of the Sino-German Renewable Energy Programme

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

Why a share of 80% electricity from renewable energy sources is no utopia and

why a share of 80% fossil fuels will soon be history.

Because…

• Levelized Cost of Electricity (LCOE) of RES are rapidly catching up with fossil fuels – as proven by:

• World Energy Council (WEC) World Energy Perspective: Cost of Energy Technologies

• Fraunhofer ISE Levelized Cost of Electricity: Renewable Energy

• IRENA Renewable Power Generation Costs

• Grid integration of variable RES is technically feasible provided that …

• Grid integration of variable RES is economically feasible provided that …

WEC: Most RE technologies close to reaching parity

LCOE analysis shows that the cost range across RE technologies is wider than those of conventional energies.

But the most mature and widely deployed clean technologies (i.e. hydro and onshore wind) are close to reaching parity with traditional sources.

Source: World Energy Council. World Energy Perspective: Cost of Energy Technologies. 2013. http://about.bnef.com/white-papers/world-energy-perspective-cost-of-energy-technologies/

LCOE of onshore wind electricity by region (USD/MWh)China USD 49-93/MWhIndia USD 47-113/MWh

LCOE of coal electricity by region (USD/MWh)China USD 35-39/MWh

Australian wind power: A success story

Source: RE New Economy: Tracking the next Industrial Revolution. By Giles Parkinson. July 25, 2013. http://reneweconomy.com.au/2013/bugger-the-utilities-wind-and-solar-will-be-built-anyway-74216

Fraunhofer ISE: LCOE in Germany: Renewables are catching up rapidly

Source: Fraunhofer ISE. ““Stromgestehungskosten Erneuerbare Energien.“ November 2013. http://www.ise.fraunhofer.de/de/veroeffentlichungen/veroeffentlichungen-pdf-dateien/studien-und-konzeptpapiere/studie-stromgestehungskosten-erneuerbare-energien.pdf .

Lignite Coal CCGT

IRENA: LCOE for RE technologies are continuing to decline (as of Nov 2012)

The LCOE for Renewable Power Generation TechnologiesNote: Assumes the cost of capital is 10%. The bands reflect ranges of typical investment costs (excluding transmission and distribution) and capacity factors. PT = parabolic through, ST = solar tower, BFB/CFB = bubbling fluidized bed, AD = anaerobic digester, CHP = combined heat and power.

Source: IRENA. Summary for Policy Makers: Renewable Power Generation Costs. November 2012; http://www.irena.org/menu/index.aspx?mnu=Subcat&PriMenuID=36&CatID=141&SubcatID=261

Chart shows cost-effectiveness of today’s RE technologies. However, the cost ranges are wide and very site-specific.

A rapid deployment of RE technologies has a significant impact on costs due to the high learning rates for RE.

Because…







… wind and solar fluctuation patterns are compensated for by a more flexible electric system

Source: AGORA. “12 Insights on Germany’s Energiwende.” Feburary 2013. http://www.agora-energiewende.org/fileadmin/downloads/publikationen/Impulse/12_Thesen/Agora_12_Insights_on_Germanys_Energiewende_web.pdf

Fossil FuelsSolarWind OffshoreWind OnshoreHydroBiomassElectricity Demand

Fluctuation is the main technical challenge for an electric system with high levels of RE penetration.

Technical requirements for the successful integration of variable RES

Conventional plants as baseload providers

Zero flexibility of dispatchable generation

Hierarchical grids as distribution mechanism

Electricity as an isolated system

Conventional plants as residual load providers

Maximum flexibility of dispatchable generation

Grids as an aggregation and balancing instrument

Electricity as part of the overall energy, heat and transportation system


Ways of thinking must change, a new approach is needed!

The NREL Renewable Electricity Futures Study comes to similar conclusions…

Conventional plants as baseload providers

Conventional plants as energy-providers

Zero flexibility of dispatchable generation

Electric Sector not flexibile enough to accommodate higher levels of RE generation

Hierarchical grids as distribution mechanism

Today’s grid infrastructure poses a constraint

Conventional plants as residual load providers

Conventional plants as reserve-providers

Maximum flexibility of dispatchable generation

Increased flexibility of the electric system

Grids as an aggregation and balancing instrument

Expansion of transmission infrastructure to share and balance reserves

Source: National Renewable Energy Laboratory (NREL). “Renewable Electricity Futures Study.” 2012. http://www.nrel.gov/analysis/re_futures/

Because…







… new market rules and regulations are designed

• Today's electricity market is about trading kilowatt hours – it does not guarantee system reliability;

• Wind and PV cannot be principally refinanced via marginal-cost-based markets – with good weather conditions they create excess electricity and thereby destroy there own market value

• The new market design must actively engage the demand-side;


Mechanism of an energy only market works against RES


A transformed energy system needs a new market design and regulations


Fed. government

1. BMU: http://www.erneuerbare-energien.de/en/

2. Think Tanks: http://www.agora-energiewende.org/

Agora Paper online: http://climatepolicy.cn/en/capacity-building-for-climate-change-

mitigation-and-adaptation/40

3. GIZ Projects ： Climate Change: www.climatepolicy.cn

Biogas: www.biogas-china.org

Wind Energy Programme: www.cwpc.cn/cwpc (temporarily not available)

For more information please go to:

Thank You for Your Attention ！

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