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TheGermanenergytransition(Energiewende)

Policy,EnergyTransformationandIndustrialDevelopment

ÁlvarezPelegry,Eloy

OrtizMartínez,Iñigo

MenéndezSánchez,Jaime

May2016

CuadernosOrkestra2016/15_ENG

ISSN2340‐7638

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ÁlvarezPelegry,Eloya;OrtizMartínez,Iñigob;MenéndezSánchez,Jaimec

C/HermanosAguirrenº2.EdificioLaComercial,2ªplanta.48014Bilbao

Tel.a:3494.413.90.03‐3150.Fax:94.413.93.39.

E‐mail:[email protected]

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JELcodes:H2,J63,L5,N74,O13,Q4,R28,R58

Keywords:energytransition,Germany,regulation,industry,costs.

Theopinions,analysesandremarkscontainedinthisdocumentarethoseoftheauthorsanddonotnecessarilyreflecttheopinionsoftheinstitutionsofwhichtheyformpart.All

mistakesareattributabletotheauthors.

TheauthorswishtothankClaudiaSuárezDiezandMacarenaLarreaBasterrafortheirassistanceinthisproject.

Theywouldliketothanktoothemanyprofessionalsfromdifferentsectorswhohavesharedtheirknowledgeandofferedsuggestions,allowingustocompareandcontrastdifferentideas.TheseincludePeterBirkner,RodnanKarimGarcíaRamírez,Alfonso

GonzálezFinat,UliDanielKalim,FernandoLasheras,PedroAntonioMerinoGarcía,MaríaTeresaNonayDomingo,RamonRodríguez,AlanThomsonandDirkVetter.

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“EnergyDocuments”isaserieswhichincludespapersthatareendorsedorproducedbytheEnergyChairofOrkestra,

TheGermanEnergyTransition

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PRESENTATION

EmilianoLópezAtxurra

PresidentoftheCommitteeofSponsorsoftheEnergyChairofOrkestra‐BIC

In the European Union and particularly in the French‐German axis the energytransitionhastakencentrestageinthedebateonenergypolicy.Historically,suchtransitions have occurred when the structures of energy sources have beenmodified in different regions or countries, or when technological changes havebrought about important transformations, thus creating opportunities for newenergysourcesandrelegatingothersinimportance.

InEurope,countriessuchasGermanyandFrancehaveinitiatedprocessesofchangeintheirenergystructuresfromdifferentperspectives.ThetransitioninGermanyisparticularlyimportantfortworeasons:firstly,becauseofthecountry’simportanceandweightinEurope;andsecondly,becausetheprocessofenergytransitionandtransformationislinked–sometimesstructurally–toindustrialpolicy.

Asthisstudyshows,theseprocessesofchangebeganseveralyearsagoinGermanyandhave gained greatermomentum since the 21st Conference of theParties onClimateChange,heldinParisatthebeginningofDecember2015.

For a number of reasons of varying importance, including a recognition of thepreeminentroleofGermanywithintheUnionandbecauseofitsroleasareferencepoint in industrialand technologicalpolicycentringonenergyandmobility, andbecauseofitsparticulardefenceofitsindustrialmodel,theEnergyChairofOrkestrafeltitwouldbeofinteresttomakeanin‐depthandwide‐ranginganalysisoftheissueofGermanenergy,rigorouslyidentifyingwhattheEnergiewendeinvolves,whatitsaimsareandatwhatphaseitcurrentlystands.

“TheGermanEnergyTransition(Energiewende).Policy,EnergyTransformationandIndustrialDevelopment”addresseskeyaspectsofthisimportantprocessfromanall‐embracingperspective.

Thereportisdividedintofourbasicblocks:thefirstdealswithpolicy;thesecondwiththeenergystructureinGermany;thethirdwiththeconceptanddetailsoftheEnergiewende; and the fourthwith industrialmatters. The study concludeswithsomereflectionsandfinalconsiderations.

The first block (on policies) reviews the background and reasons for energytransitionsandgoesontoanalysethepoliticalframeworkandtheimportantroletheauthorsbelievetheGreenshaveplayedintheprocess.

TounderstandtheEnergiewendeitisimportanttoknowthecurrentsituationandhistoricaldevelopmentoftheGermanenergytransition.Thesecondblocktherefore


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provides analysis of primary and final energies, examining oil, gas, coal andelectricityindetailtogiveacomprehensivepictureGermanenergystructure.

The third block,which constitutes the core section of the report, dealswith theEnergiewendeitself.Itidentifiesthebasicobjectivesandthewayinwhichtheyarebeing developed, looking at key issues of the energy transition in Germany andsketchingoutthefuturevisioncontainedinthehorizonto2050.Italsoanalyseskeybasicregulation,enteringintosomedetailonthemechanismsofthe“feed‐intariffs”forrenewableenergiesandhowtheyhavedeveloped.

Giventheimpactofthisprocessonincreasesinelectricityprices, italsoanalysestrendsinprices,particularlyforthehighenergy‐consumingindustriesmostaffectedbytheprocess.

Nolessimportantly,thissectionalsocontainsadiscussionoftheimplicationsanddifficultiesthathavearisen.

Thelastblock,beforethefinalreflectionsandconsiderations,examinestheindustrysurrounding renewables, with a comprehensive analysis of wind energy,photovoltaics,biomassandbiogas.Theauthorsprovideadetailed listofGermancompaniesoperatinginthesesectors,analysingtheeffectoftheenergytransitionontherenewablesindustries.Inordertoputthisissueintocontext,areviewoftheperspectivesofbothEuropeanandGermanindustrialpolicyisalsoprovided.

Thestudythusallowsabroadfirst‐handanalysisfromwhichtheauthorsdrawanumberofreflectionsandfinalconsiderationsinthefinalchapter.

Giventheimportanceoftheenergytransitionandenergyefficiency,adiscussionofGermany’spositionwithregardtoEUindustrialandenergypoliciesmaybeuseful,offeringrelevantreferencepointsforthefuturedesignofourenergyandindustrialpolicies.

Iwouldliketoconcludebythankingtheteamthathavepreparedthisstudy–EloyÁlvarez Pelegry, Iñigo Ortiz Martínez and Jaime Menéndez Sánchez– for theircommitmentanddedicationtotheworkoftheChair.

TheGermanEnergyTransition

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CONTENTS

1. INTRODUCTION..............................................................................................................1

I.POLICY

2. PRECEDENTSANDCAUSES..........................................................................................7

2.1. Precedents...........................................................................................................................7

2.2. Motivations.Aninitialapproach.............................................................................13

3. THEPOLITICALCONTEXTANDTHEGREENS.....................................................16

3.1. Generalpoliticalcontext.............................................................................................16

3.2. TheGreens........................................................................................................................18

II.ENERGY

4. ENERGYSTRUCTURE..................................................................................................22

4.1. Energy.Primaryandfinal..........................................................................................22

4.2. Oil..........................................................................................................................................26

4.3. Gas........................................................................................................................................31

4.4. Coal.Ligniteandhardcoal.........................................................................................35

4.5. Windenergy,photovoltaicsandbiomass...........................................................39

4.6. Electricity..........................................................................................................................42

III.ENERGIEWENDE

5. OBJECTIVES.VIEWANDIMPLICATIONS...............................................................69

5.1. Basicobjectives..............................................................................................................69

5.2. Avisionforthefuture.Horizon2050...................................................................74

5.3. KeypointsfortheEnergiewende.............................................................................78

5.4. Thecostofrenewables................................................................................................84

6. RELEVANTBASICREGULATION..............................................................................88

6.1. Chronologyofthemainregulatorymeasures...................................................88

6.2. Actionsintheregulatoryfield..................................................................................90


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6.3. Feed‐inTariffs(FiTs)...................................................................................................96

7. ELECTRICITYPRICES...............................................................................................105

7.1. Electricityprices..........................................................................................................106

7.2. Energiewendesurcharge...........................................................................................110

7.3. Exemptions.....................................................................................................................113

8. SOMEIMPLICATIONSANDDIFFICULTIES........................................................116

IV.INDUSTRY

9. INDUSTRIALPOLICY................................................................................................123

9.1. ThepositionofEuropeanindustrialpolicy......................................................123

9.2. IndustrialpolicyinGermany..................................................................................125

10. THERENEWABLES‐RELATEDINDUSTRY.........................................................131

10.1. Windenergy..............................................................................................................132

10.2. Solarphotovoltaics.................................................................................................136

10.3. Biomassandbiogas................................................................................................143

10.4. SomeconsiderationsontheimpactoftheEnergiewende.....................146

V.REFLECTIONSANDFINALCONSIDERATIONS

11. THREEPRELIMINARYCONSIDERATIONSANDSEVENTOPICS.................147

11.1. Threepreliminaryconsiderations...................................................................147

11.2. Seventopics...............................................................................................................148

12. BIBLIOGRAPHY..........................................................................................................153

13. APPENDIXES...............................................................................................................167

13.1. APPENDIX1:Abbreviationsandacronyms.................................................167

13.2. APPENDIX2:BasicinformationonGermany.............................................171

13.3. APPENDIX3:TheGreens.....................................................................................174

13.4. APPENDIX4:LegaldevelopmentoftheEnergiewende..........................177

13.5. APPENDIX5:PlansandfiguresonenergystructureinGermany......183

13.6. APPENDIX6:Germancompaniesintherenewableenergiessector........ .........................................................................................................................................191

AUTHORS..............................................................................................................................202

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1. INTRODUCTION

Thisintroductionprovidessomereferencesandthoughtsonenergytransitionsandsetsoutthescopeandobjectivesofthestudy.

Onenergytransitions

According to Smil (2010),2 there is no generally accepted definition of the term“energy transition”. The concept is normally used to describe the change incomposition or structure of primary energy supply, as well as the gradualtransformationfromaspecificmodelofenergysupplyintoanewstageoftheenergysystem.

Nordensvärd, J. et al.3 argue that the term refers to changes involving thereplacementofcertainenergysources thataffectacountry’seconomicactivities.Therehavebeenanumberofenergytransitionsthroughouthistory,particularlyindevelopedcountries.Certainkeylandmarkscanbeidentified,suchasthetransitionfromtheuseofmanpowerandbeastsofburdentotraditionalbiomass(firewood,harvestwasteandmanure);fromtraditionalbiomasstocoal(with1860asthekeyyear); from coal to oil (1880); and finally from oil to gas (1900). Other keymilestonesincludetheintroductionofnaturalgasinpowerandheating(between1900and1910)andtheintroductionofnuclearpower(1965),renewablesystemsandhydroelectricplants(1995)inpowerproduction.

Theterm“energytransition”mayalsorefertothegradualspreadofnewdevices,suchasthereplacementofhumanandanimallabourbymechanicalengines.Thismainly consists of changing patterns of energy use,modifying energy quantities(fromenergyshortagetoabundanceorviceversa)andmakingsubstantialchangesinenergyresources,suchastheproductionofelectricityfromwood.

Comprehensiveenergytransitionsinlargeeconomiesinherentlytakealongtime.Various decades are usually needed to complete these processes. Normally, thegreater the dependence on a particular source of energy or driving element, thelongertheuseofexistingsourceswillpersistsand,consequently,thelongerthetimerequiredfortheirreplacement.Thismightseemobviousbutitisseldomtakenintoaccount,hencetheabundanceoffailedpredictionsontheimminentsuccessofnewenergysourcesornewtechnologies.

Drivingelementsalsoplayanimportantroleinenergytransitions.Smil(2010),forexample, notes the extremely long periods of time between the discovery ofscientificprinciplesandthedevelopmentofpatentsandindustrialapplicationswithgrowingeconomiesandvolumes.

Therefore,notonlydoenergytransitionsrequiretime,buttheydonotguaranteethe totaleradicationofearlier,profitableenergysourceseither (with lowprices,costsorotheradvantages).Furthermore,technologyclearlyplaysakeyroleintime‐

2(Smil,2010)3(Nordensvärd&Urban,2015)

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to‐market.Andfinally,butnolessimportantly,thecombinationofthemarketwithtechnological and energy developments is also required for successfultransformations.

Thecurrentcontextofenergytransitions

TherecentCOP21(Twenty‐FirstConferenceoftheParties)organizedbytheUnitedNationsFrameworkConventiononClimateChange(UNFCCC)(Paris,30November‐12December2015)accepted4thattheglobalenergytransitionhadalreadybegunandwouldcontinuetodevelop.

Inrelationtotheenergytransitionscurrentlybeingimplementedandthoseyettobeundertaken,Jean‐ClaudeJuncker,PresidentoftheEuropeanCommission,5toldtheconferencethat“Europeancities,andattheforefront,innovativecompanies,arecommittingtoenergyefficiencyandthedevelopmentofrenewableenergies.Thisenergy transition is charting a new world, a low‐carbon world, rich inopportunities”. Speaking in similar terms, Miguel Arias Cañete, EuropeanCommissionerforEnergyandClimateaction,said6that“thisCOPhasaveryclearmessage;everycountryhastomakeatransitiontowardscleanenergies,renewableenergies, energy efficiency and goodmanagement of agriculture, forestry policy,transportandbuilding”.

Europeanenergypolicyiscurrentlydesignedtowards2020,2030andeven2050.As IPPC and IEA energy scenarios show, energy systems are very likely to seesubstantial changes in the future (IEA, 2014b) (IPPC, 2012), highlighting theimportanceofdesigningappropriateenergypolicies.

InEurope,energyisanissueofgreatconcernfortheEuropeanCommission,duetoits position as an input in industry and the key role it plays in achieving anenvironmentallysustainableeconomy.AsaresultoftheCommunicationfromtheCommissiontotheEuropeanCouncilandParliament,AnEnergyPolicyforEurope,someregulationinthisareawasdevelopedwhichisexpectedtoextendbeyondtheenergysector(Directive2009/28/EC,Directive2009/29/EC,amongothers).

Directive 2012/27/EU, published in the Official Journal of the European Union(OJEU)inOctober2012,setsageneraltargetofreducingEuropeanprimaryenergyconsumptionby20%by2020,aswellasachievingnewimprovementsinenergyefficiency. Energy efficiency is therefore also a major aspect in the Europeanstrategyforsustainablegrowthto2020.Itisalsooneofthepathwaysforensuringenergysupplysecurityandreducinggreenhousegasemissions.

TheEuropeanUnionremainscommittedtomeetingits20‐20‐20targetsby2020.Theseconsistof:a)20%reductioninGreenhousegas(GHG)emissions,comparedto 1990; b) a 20% reduction in energy consumption, through greater energy

4(Pellerin‐Carlin&Vinois,2015)5Statementretrievedfromhttps://www.youtube.com/watch?v=WorPDG0be9Y6Statementretrievedfromhttps://www.youtube.com/watch?v=m0Ko9buZ1sM


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efficiency; and c) a 20% contribution of renewable energy to final gross energyconsumption.

Italsotargetsareductionof40%inGHGby2030(comparedto1990levels)and80‐95%by2050;27%renewablesinfinalenergyconsumptionby2030anda27%reductionintotalenergyconsumption(comparedtocurrentlevels)by2030.

Anyachievementofclimatetargetsbyamemberstate(whetherself‐imposedorsetbytheEU),hastobeperformedwithinthecurrentcontextofamovetowardsanEnergyUnion, another importantdevelopment in theEuropean energy scenario.Through this process, the EU intends not only to achieve environmentalimprovements,butalsogoalsrelated, interalia, toissuessuchassupplysecurity,completing the energy market and improving interconnections in peripheralcountries.

Inthiscontext,GermanyannouncedthestartofitsenergytransitioninJune2011,withtheestablishmentofitsenergyplanfollowingtheFukushimaaccidentinJapaninMarch2011.7TheGermanenergytransition(EnergiewendeinGerman)aspires8totransformtheGermanenergysystembyfocusingonrenewableenergiesasthefundamentaltoolforimprovingenergyefficiencyandconfrontingthechallengeofclimatechange.

TheEnergiewende isbeingplayedoutat a timewhenanumberof countriesarestudyingorsearchingforenergysystemswithloweremissionsofgreenhousegases,particularlyCO2; such systemsarenormallyknownas low‐carboneconomiesorlow‐carbonenergysystems.

IntheUnitedStates,theObamaadministrationhaslaunchedanambitiousprogramforpromotingrenewablesandclosingcoal‐poweredplantsundertheCleanAirAct,furtherbackedbythelowpriceofnaturalgas(Burtraw,Linn,&Mastrangelo,2014).

On 4August 2015, speaking in theWhiteHouse, PresidentObama launched theCleanPowerPlan,whichtargetsa32%reductioninemissionsfromthermoelectricplants compared to 2005 levels. In this way, Obama hopes to meet the US’scommitmenttoreduceitscontributiontoclimatechange(RedacciónBBCMundo,2015).

SomeauthorsalsoconsiderthecaseofJapantobeimportant.Thecountryappearstobepursuingasimilar linetoGermany,althoughit is importanttonotethatitsobjectivesaredeterminedmorebynecessity(Heuskel,D.,2013).SincetheaccidentatFukushima(hereaparallel canbeseenwith theGermansituation), Japanhasbegun cutting nuclear generation. The result has been an energy shortage in allsectors,whichhassparkeddebateontherightlevelofreduction.Thepotentialofrenewable energies and distributed generation to cover this shortfall has been

7(Bayer,2015)(MartíFont,2014)(Öko‐Institute.V.,2013)(VonHirschhausen,2014)8PossibledatesforthebeginninganddevelopmentoftheEnergiewendeareexaminedindetailinPoint2.Aswillbeseen,theoriginsoftheEnergiewendeconceptcanbetracedtobeforethisdate.


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considered,althoughJapan’ssmalllandareaisamajorlimitationtoconcentratedsolarandwindgeneratingoperations.

TurningagaintotheEuropeanframework,on4August2015,afterseveralmonthsof discussions, France published a new act setting out targets for the country’senergytransition:a40%reductioninGHGemissionsby2030(comparedto1990levels);a75%reductionfromcurrentemissionratesby2050;a50%cutin2012energyconsumption levelsby2050anda32%contribution fromrenewablesby2030.Thesemeasuresaffectnotonlyenergyandindustrialoperations,butalsotheconstructionandtransportsectors.

In these contexts, theEnergiewende has therefore aroused considerable interest,being seen as an example for other areas, especially other EU countries, sinceGermany is the first developed countrywith an ambitious plan for changing itsenergysystemandalsooneofthestrongestEuropeaneconomies.Theinterestisnotjust inanalysing thesituationanddevelopmentof theEnergiewende. It isalso inpredictingthepossibleimpactitmighthaveinothercountries,andindeterminingbest practises that can be implemented and drawing conclusions from them.However,itisdebatablewhetheranenergytransitionliketheEnergiewendecanbeundertakenbyothereconomieswithsimilarambitions.

ChampionsofEnergiewendedefenditspotentialwhiledetractorsaremorescepticalaboutthepolicies,pointingtothecostandtheeconomicandfinancialsustainability.

Objectiveandrangeofthestudy

Theaimof thisstudy is toanalyse theenergysituation inGermanyandexamineEnergiewende targets from various perspectives ranging from political andregulatoryissuestoquestionsofenergystructureandcompetitiveness.Therelationbetweenenergyandindustryisalsoconsidered.

Takingintoaccountthecontinuedstronginfluenceofpolicyandregulation,ithasbeenconsideredadvisabletoaddressthesetopicsinBlockIofthisstudy,dealingwithprecedentsandincentives.

Theanalysisshowsthat,farfrombeingarecentissue,agreatnumberoftheideasof the energy transition date backmany years. For this reason,we examine thepolitical context and path of the “Greens”, since it is difficult to understand theprocesswithout examining and understanding the political context inwhich theenergytransitionhasdeveloped.

NoanalysisoftheenergytransitioninGermanycanbeentirelydivorcedfromthehistorical evolution of its energy structure, in terms both of primary and finalenergies and “basic” energies, such as oil, coal, gas and electricity. Following adescription of the current situation, Block II therefore looks at the historicdevelopmentoftheenergystructure.


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BlockIIIexaminesthebasicobjectives,withshortandmedium‐termtrends.Italsolooksat the futurevisionof theEnergiewende, in termsof its targets.Finally,weconcludewithachapteridentifyingtenkeytopics.

Naturally, this section also deals with the regulatory framework, carefullyexaminingchangesinregulationoftheGermantransitionprocess.

Finally, this block addresses the implications for competitiveness and industry,trends in electricity prices and the cost of this transition, in order to provide acomprehensiveunderstandingofthelistoftargetsandtheirimpactonprices.

In this chapter we also examine some other implications and review certaindifficultiesthathavearisenintheprocess.

BlockIVtacklesakeyelementfortheenergytransition:industrialpolicy.Withbothsuccessful andunsuccessfuldecisionsalong theway, thishasgonehand inhandwiththeimplementationofenergypolicies.WewillthereforetrytoreflectGermanindustrialpolicywithinthewidercontextofEuropeanindustrialpolicies.

Giventhatmuchofthedebateandtherelationshipbetweenenergyandindustryintheenergytransitionfocusesonthedevelopmentofrenewables,BlockIVcontainsa chapter specificallydevoted to this issue.Weofferadetailed list of companiesoperating in the wind, photovoltaic, biomass and biogas energy fields, with anumberofappendicestosupporttheanalysis.

Finally, in theconclusionssection,we identifykeyelements in the resultsofouranalyses.

Thereareanumberofareaswhichmeritfurtherexamination,basedontheresultsofthisstudy.Althoughnotincludedinthisreport,theymightbeearmarkedformoredetailedanalysisinthefuture.

The first is related to energy efficiency and to analysing why, despite all theregulationandeffort,progresstowardsthestatedobjectiveshasbeensoslow.

Thesecondinvolvestransport;althoughallauthoritiesagreeontheneedtoincludethisareainanyintegralenergytransition,itstillpresentsnumerousdifficulties.

Thethirdgreatissueinvolvesananalysisoftherelationshipbetweenenergyandindustrytocomplementtheanalysesmadeinthisreport,intermsofnetcreationofindustry and jobs, in the current situation of the Energiewende. A comparativeanalysis is alsoneededof the repercussions for industryof introducing energiessuchasoil,coalandnuclearpower.Inthisregard,itwouldbeofinteresttoexaminethetotalandnetcostsoftheEnergiewendeingreaterdepth.

Finally,oneinterestingtopicfrombothfromaconceptualpointofviewandintermsof itspractical implications, istheroleofmarketsand,particularlytheelectricitymarkets,giventhatacombinationofincentivesandsubsidies,boundtoregulationand a policy with binding targets, together with the growing development and


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incorporation of renewables, is inconsistent with the potentiation of electricitymarketsandhasimplicationsfortheirfunctioning.


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I.POLICY9

2. PRECEDENTSANDCAUSES

Germanyhasimplementedaprocessthatwilllastfordecades.Itisdesignedtobaseitsenergysystemonrenewablestothegreatestpossibleextentandtoreducetheuseoffossilfuelsandnuclearenergyasfaraspossible(includingtheeliminationoftheir use in power generation). This “technical/economic/political” project isknownastheEnergiewendeandhasreceivedconsiderablesupport inparliamentandfromsocietyatlarge.10

TheGermanEnergiewendemightbesaidtobeaunique“historical‐political”projectthat cannot and should not be transferred in its entirety directly to any othercountryorregion.Nonetheless,anumberoflessonscanbelearnedfromthisprojectoflarge‐scaletransformationofexistingenergysystems.

OneofthemainthrustsoftheGermanenergytransitionisamovefromanenergymix (including not only electricity, as we shall see) with a relatively smallcontributionfromrenewableenergytooneinwhichREplaysavitalrole,11althoughreducinggreenhousegasesemissionsandincreasingenergyefficiencyareparallelobjectives.Thesegoals,whichincludethephasing‐outofnucleargeneration,pursueeffectiveresultsinthefightagainstclimatechange,whileatthesametimereducingexternalenergydependencyandboostingtheeconomy.Theyarebothdifficultandcomplexinnature.

One idea underlying this transition is to link energy policy to industrial andeconomic policy, together with an opportunity to develop new technologies orindustrialsectors,especiallythoserelatedtoenergy.

Asweshallsee,theissueofcompetitiveness–akeyelement–hasbeenaddressedpartly by charging the highest costs for domestic consumption and partly bygrantingexemptionstopower‐intensiveindustry.

ThefollowingsectionsofferananalysisofthehistoryoftheEnergiewendeandthefactorsbehinditsmomentum.

2.1. Precedents

Although the termEnergiewende has only recently come into vogue and usuallyreferstotheperiodfrom2011,itsoriginscanbetracedbackfarearlier,totheearly1970s.

9AmapofthedifferentfederatedstatesorLänderinGermanyisincludedinAppendix13.2.10Thedecisiontobeginthenuclearshutdownwaspassedbyanabsolutemajorityinparliamentin2011(withsupportfromtheSPD,GreensandFDP,aswellastheCDU/CSU)(Müller,2011).69%ofGermans favour the Energiewende and consider that its advantages outweigh its disadvantages(Morris&Pehnt,2012).11Toprovideawidercontextforthestartingpointofthetransition,in2014theprimaryenergymixinGermanycontained11.1%ofrenewables.InSpain,thefigurewas27.1%(seeChapter4Energystructure).


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1970s

Debateson the creationof anenergypolicy intended toestablish a roadmap forabandoning fossil fuelsandnuclearpowergoback to thepoliticalmovementsof1968. It is important to remember themonopolist context of the time, inwhichpowerfacilitieswerebecominglargerandlarger.ThetermEnergiewendebecamepopular to refer to greater democratic control, environmental activism andoppositiontothenuclearindustry.

ErhardEppler,leaderoftheSocialDemocraticParty(SPD)andFederalMinisterofEconomic Cooperation, was the first person to establish the notion of wende(transition) in his bookEndeoderWende.VonderMachbarkeitdesNotwendigen(End or Transition. From Necessity to Facilitation) in 1968 (Von Hirschhausen,2014).

Atthesametime,followingpublicationoftheClubofRome’sreportTheLimitsofGrowthin1972,theideaofmakingsustainableuseoffossilfuelsandoppositiontonuclearenergybegantospread(VonHirschhausen,2014).

The oil crisis of 1973 and 1979 led to the first energy efficiency policies anddeliberationonwaysofachievingan“alternative”energysupply.Italsohighlightedtheeconomicriskofrisingoilprices.InGermany,energyconservationwasalsoseenasawayofreducingdependencyonenergyimports.

The Energiewende movement emerged at the same time as the anti‐nuclearmovementofthe1970s.In1973,whenplanswerepublishedtobuildanuclearplantinWyhl(awine‐growingregionborderingFrance),studentsfromtheneighbouringregionofFriburg joined forceswithwinegrowers fromtheregionandscientistssuchasFlorentinKrause.InFebruary1975,theylaunchedtheGermanantinuclearmovement.12

Nonetheless, the oil crisis of 1973 spawned a feeling that the country’s energysupplywasvulnerable,whichhelpedsustainsupportfornuclearenergy.

1980s

ThetermEnergiewendeappearstohavebeenfirstcoinedin1980inastudybytheGerman Institute of Applied Ecology (Öko‐Institut) which set out the energyalternatives for ending the use of uranium and oil. The report, published at theheightoftheantinuclearmovement,arguedthatanalternativeenergysupplywaspossible(Aykut,2015).

Thiswasoneof the first reports toargue thateconomicgrowthwasviablewithlowerenergyconsumption–anideathatwaslatertakenupinothertexts,suchasFactorFourin1998,thoughnospecificsolutionswereproposed.

AnotherofthefirstreferencestoEnergiewendeappearedinthecontemporarybookGrowthandWealthwithoutOilandUranium(Krauseetal.,1980).Thiswasoneof

12(MartíFont,2014)


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the first treatises to contain consistent proposals, fundamentally based onrenewableenergiesandenergyefficiency.

Thereafter, the Energiewende philosophy was promoted on various fronts. InadditiontotheInstituteofAppliedEcology(Öko‐Institut),anumberofpoliticiansalsocameoutinsupportofrenewableenergies,amongstthemPeterAhmelsoftheChristianDemocraticUnion(CDU),directoroftheGermanWindEnergyAssociation(BWE or Bundesverband WindEnergie) for eleven years. Another prominentsupporterwasFranzAlt,authorin1999ofDerökologischeJesus(JesustheEcologist).

In1983,asaresultoftheantinuclearmovement,thegovernorofthestateofBaden‐Württember called a halt to the Wyhl muclear plant project. This successencouragedthemovementtobelieveitwasreallypossibletostoptheconstructionofnuclearpowerplants.ItwasalsooneofthefactorsleadingtotheformationoftheGreensas apoliticalparty in1980.Oneof the reasons for their successwas theinclusivenatureofthemovement,withconservativesandecologistsworkingsidebysidefromtheoutset(Morris&Pehnt,2012).Itisworthmentioningtoothattheideaofenergyrenovationincludedtheintentionofpromotingandextendingtheuseofrenewables.

InApril1986,theaccidentatthenuclearplantinChernobyl(Ukraine)thatledtomeltdownofthereactorcoresparkedinternationalalarmduetothehighlevelsofradioactivity detected and the subsequent environmental disaster. The resultingradioactive rain in Germany (as in other parts of Europe), together with otherfactors,ledtoacollapseintheGermanpublic’sconfidenceinthesecurityofnuclearpower,leadingtoanincreaseinsocialalarm.

InAugust198,asaconsequenceoftheaccidentatChernobyl,theSPD–whichhadsupportednuclearenergyin1979–calledfortheabandonmentofallnuclearenergyintenyears.ThemostimmediateresultofthispoliticalchangewastheterminationofR&DprogrammesintheSPD‐governedstateofNorth‐RhineWestphalia,bothinhigh‐temperature gas‐cooled reactors and in fast breederones, after30 years ofwork(WorldNuclearAssociation,2016).Thefederalgovernment,ledbytheCDU,meanwhilemaintaineditssupportfornuclearenergyuntilthepartylostthe1998elections(seeSection3.1).

AfterChernobyl,theconservativegovernment13withChancellorHelmutKohlandenvironmentministerProfessorKlausTopfer,enactedthefirstlaw“onpaymentofrenewable energy tariffs” in 1990. The actwasdevised following the suggestionmadebytheEuropeanCommissiontostimulaterenewableenergy.

1990sandreunification

Attheendofthe1980s,severalpubliccompaniesinthreeGermanstatesintroducedtheconceptof“totalcostcompensation”,regulatingthefirstFeed‐inTariffs(FiTs)inGermany.ActivistWolfVonFabeckbecamethefirstpersontoimplementthefeed‐

13(Morris&Pehnt,2012)


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intariffsinordertopromotesolarenergyinhishomevillageofAschenattheendof the 1980s. In 1991, a law on FiTs –the Stromeinspeisungsgesetz (StrEG)–wasenacted.

TheEnergiewendemovementwasfurtherstrengthenedbytheGreen’s firstentryintoaGermangovernment,inHessenin1985.In1998,14JurgenTrittin,aleadingfigureintheGreenParty,becameministeroftheenvironment,thusgainingaccesstothedossiersonrenewableenergyheldbytheministryfortheeconomy,whichhadtraditionallyheldtheportfolio.ThechangesinGermanrenewablepolicymaypartlyexplainthesuccessfulinceptionoftheEnergiewende.

In1998thecoalitiongovernment(seeSection3.1)decidedtochangethe lawonprogressive withdrawal from nuclear energy and in June 2000 it agreed to anarrangementsettingalimitforoutputfromnuclearplants(equivalentto19reactorsoperatingfor32years).Thiswascombinedwithothercomplementarymeasures,suchasataxexclusionandanexaminationofthesafetyofreactorsinGermany,aswellasmaintenanceofwastestoragefacilitiesinKonradandGorleben.

Startofanewcentury

The Renewable Energy Sources Act of 2000 (Erneuerbare‐Energien‐Gesetz, EEG)maintainedthephilosophyoftheStrEG(LawforFiT)forspecifictechnologiesandasalong‐term(20‐year)supportmechanismforrenewableenergies(mainlywind,solarPVandgeothermalandlaterextendedwithregulationscoveringbioenergy).In addition, FiTs were disassociated from the percentage of the retail fee anddifferentiatedbytheactualcostsofthespecificinvestmentintermsofsizeandtypeoftechnology.TheideologicalchampionsofthislawwereMPsHermanScheerandDietmar Schütz for the SPD, and Hans‐Josef Fell15 andMichaele Hustedt for theGreens.

Specifically, theact led todevelopmentofmorewindenergy.The “conventional”energysectordecidedtotakelegalaction.EUCommissionerforCompetition,KarelVanMiert,wentontherecordasstatingthatheconsideredtheFiTstobeunlawfulsubsidies and the German power company Preussenelektra (whichmergedwithBayernwerkin2000tocreateE.ONEnergie),decidedtotakethemattertocourt.The case reached theEUCourt of Justice,which in 2001 ruled that FiTs did notconstitute public subsidies and were therefore not illegal, thus enabling thedevelopmentofrenewableenergies.

Anothertangibleresultofthepoliticalmovement,withinwhichtheconceptoftheEnergiewendecanbeencompassed,wasthenucleardecommissioningapprovedin1998 and implemented through an agreementwith the nuclear industry in June2001.Thatcommitment involveda reduction inoutputafter32years in service,leadingtoclosureofStadeandObrigheim(2003and2005respectively)andofthe

14(VonHirschhausen,2014)15Section3.2,explainingthephenomenonoftheGreens,discussesFell’sessentialinfluenceinthedraftingoftheact.


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inoperativeMülheim‐Kärlichreactor,whichbegantobedismantled in2003.Theagreement also banned construction of new nuclear plants and introduced theprincipleofstoringspentnuclearfuelatasinglesite(WorldNuclearAssociation,2016).

TheRenewableEnergySourcesAct(EEG)in2000wasamendedin2004,andthe100,000SolarRoofs16 programme for photovoltaic energy –whichprovided for abonus(appliedtothepurchaseprice)–wascancelled;initsplacesolarpanelswereofferedtheadvantagesofFiTs.In2009,theactwasagainamendedbythecoalitionofSocialDemocratsandChristianDemocrats(withouttheGreensingovernment)and it was realized that this support needed to focus on the markets. Thisencouragedwindenergyproducerstosellpowerdirectlytothemarket,insteadofreceivingFiTs,wheneveritwasmorecost‐effectivetodosoandofferedamarketingbonus(Morris&Pehnt,2012).

Anotherimportantelement,andonethatitisnotoftendiscussedintheliterature,istheboostgivenbytheEuropeanCommissiontowhatlaterbecameincludedasthe “third package” of energy policy, capable of breaking some of the verticalmergersincountrieslikeGermany,resultinginmajorpenaltiesfromtheEuropeanCommission.GonzálezFinatwritesthat“itwasnecessaryin2006fortheEuropeanCommission, using its exclusive authority on competition policy, to make ananalysis17 of the industry showing that the conduct of various stakeholderswasopposedtoTreatyprinciples.Thethreatofaconsequentsanctionledtowhatwasknownas the “thirdpackage”, launchedby theCommission in January2007andadoptedin2009.ThisrepresentedaqualitativeandimportantstepforwardontheroadtothecreationofaninternalelectricityandgasmarketwithintheEuropeanUnion, given that theprevious legislationhadnot achieved its statedobjectives”(GonzálezFinat,2013).

From2010/2011

On28September2010,theGermanFederalMinistryfortheEnvironment,NatureProtection,BuildingandNuclearSecurity(BMUorBundesministeriumfürBildungundForschung)andtheGermanFederalMinistryforEconomicAffairsandEnergy(BMWi or Bundesministerium für Ernährung und Landwirtschaft) published18 adocumententitledEnergyConcept,whichsetoutGermany’senergypolicyto2050.Itwasbuiltonanincreaseinrenewableenergyandthedevelopmentofdistributiongridsandimprovementsinenergyefficiency.

Theconservativegovernmentthatcametopowerin2009changedthetimelinefornuclear decommissioning approved in 1998, extending the operating lifespan ofGermannuclearplantby8yearsinthecaseofpowerstationsbuiltbefore1980,andby14years for thosebuiltafter thatdate.At thesametime, italso implemented

16Itbeganin1988as1,000SolarRoofs.17(EuropeanCommission,2007)18(BMWi&BMU,2010)


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other measures, increasing the percentage of renewables, with a further €200millioninsupportfortheperiod2013‐2016andsettingtargetsforGHGemissionsreductions.Ataxonnuclearfuelwasalsoincluded.

On 11March 2011, the Daiichi nuclear plant in Fukushima, Japan, was severelyfloodedanddamagedasaresultofatsunami,causingradioactivecontamination.Thatsamemonth,theGermangovernmentdeclaredathree‐monthmoratoriumontheoperationofallnuclearplantsinordertoconductinspectionsandreconsiderthecountry’snuclearpolicy.On14March2011,itwasannouncedthatsevennuclearplantswouldclose19 inGermany,tobefollowedbyallremainingplantsby2022.ThisclosureplanhasbeendubbedtheAtomausstieg.

InMay2011theGermanCommissionforReactorSupervision,havingexamined17reactors, concluded that there was no problem in their continued operation.Nevertheless, given theopposition tonuclearpowerof someof the states in thefederation, the Government decided to progressively close the plants by 2022,whilststillmaintainingthetaxonfuel.TheBundestagapprovedthemeasureswith513votesinfavourattheendofJuneandthedecisionwasratifiedbytheBundesraton8June.Bothchambersapprovedtheconstructionofnewcoalandgasplants,aswellasthedevelopmentofmorewindenergy20(WorldNuclearAssociation,2016).

ChancellorMerkelmightthereforebesaidtohaveadopteda“nuclearshutdown”intheEnergyConceptplan,favouringapprovalofthemove.On6July2011,Germanypassed21the2010energypack;thedatecanbeseenasmarkingthebeginningofitsenergy transition, the Energiewende. The influence on this decision of a 2011report22bytheEthicsCommissionforaSecureEnergySupplyisimportant.

In social terms, Energiewende is a project that requires enormous citizeninvolvementandimplementationofitsvisionwillprobablyrequirechangesindailylifeandpossiblyineconomicstructureandactivities.Itwillalsorequireprofoundsocialchanges,notonlyintheareaofenergy,butinarchitecture,urbanplanning,agriculture and the economy. Some analysts consider that the transformation iscomparabletothechangefollowingtheeconomicmiracleofthepost‐waryears.

Onehundredandeightyuniversitiesandpolytechnicschoolsarenowworkingonthe energy transition program and between 2011 and 2013, the Ministry forResearchhadafundforgrantsrelatedtothisprogrammeof€2billion.23

Surprisingly,thechangeingovernmentfollowingthefederalelectionsofSeptember2013didnotalterenergypolicyortheobjectivesoftheEnergiewende.Thecoalitionagreement, known as the “Grand Coalition” of Christian Democrats and Social

19NotethatthisfollowedananalysisbytheOko‐InstitutandtheWWF(WorldWildlifeFund)(Öko‐Institute.V.&WWF,2011)20FortheWorldNuclearAssociation,theEnergiewendeisthissubstitutionofnuclearenergybyfossilfuelsandsubsidedrenewables.21(BMWi&BMU,2011)22(ECSES,2011)23(MartíFont,2014)


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Democrats (whichenjoysamajority inparliamentofmore than two thirds),haslargely met the targets, confirming that the Energiewende is here to stay andremoving any doubts as to possible changes to the programme of nucleardecommissioning.

2.2. Motivations.Aninitialapproach

ForCraigMorris,24therearevariousreasonsforswitchingtorenewableenergyandincreasingenergyconservationandsavings.Amongstthemostimportantare:a)tostopclimatechangeandreduceGHGemissions,b) toreduceenergy importsandachievedgreaterenergysecurity,c)toboostthenationaleconomyandd)nuclearenergydecommissioning.

Asweshallseebelow,theinstrumentsrequiredtoaddressthesetargetsfocusonincreasingrenewables,energyefficiencyandnucleardecommissioning(whichrunscontrary to a reduction in GHG emissions).We shall address these objectives inChapter5.

Climatechange

Theburningofcoal,oilproductsandgasallcontributetoglobalwarming.Oneoftheobjectivesof theGermanEnergiewende is to removecarbon fromenergysupply,with increased incorporation of renewable sources and a reduction in demandthroughhigherefficiency.

Inordertomaintainthecarbonbudget25at450ppmofCO2equivalent,azerolevelofgreenhousegasemissionswouldberequiredbythebeginningof2030.Moreover,if we accept that developing countries will slightly increase emissions as theyachievegreaterdevelopment,theburdenofemissionsreductionwilllieevenmorewithindustrializedcountries.Onthisbasis,itmaybepredictedthatGermanywillhavetoreduceitsemissionsby95%–ratherthan80%–by2050(comparedto1990figures)inordertoreachitstargets.

TheWorldWildlifeFund(WWF)commissionedastudyfromtheInstituteofAppliedEcology of Germany, the Öko‐Institut, and the consultancy firm Prognos26 toestablish the actions needed to achieve the 2050 targets, inter alia the 95%emissions reduction, without affecting Germans’ standards of living. The studyfound that first and foremost, greater efficiency was needed to reduce energydemand,includingenergyinheating.

24(Morris&Pehnt,2012)25ThecarbonbudgetwasestablishedbytheGlobalCarbonProject(GCP)in2005andisdefinedasthemaximumquantityofcarbonthatacountryoreconomycanemitinagiven(andsufficientlylong)timeperiod,forwhichadequatemechanismsmustbeintroducedtoensurethelimitisnotexceeded.Itisassumedthatinordertolimittheaverageglobaltemperatureriseto2°C,emissionlevelsmustnotexceedCO2eq.450ppm(GCP,2015)(Greenpeace,2014)(pwc,2013).26(Ziesing,Prognos,&Öko‐Institute.V.,2009)


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Secondly,energysourceswouldneedtobeswitchedtorenewablesources.Indeed,renewableenergiescancoveraneverlargerportionoftheenergystillrequiredforconsumption.

Thelargestproblemstillremainsinthetransportsector,whereevermorecomplexsolutionswill be required. However, according to the study, emissions from thetransportsectorcanbereducedby83%comparedtothecurrentlevelby2050.

Energysecurity

Asthetablebelowshows,Germanyisamajorimporterofprimaryenergyandanexporterofelectricity.Thecountryimportsapproximately70%oftheenergyitusesand,in2012,thecountryspent€87billiononenergyimports.

TABLE1.Germanenergymix:importsofconventionalenergyfrom2005to2013(%)

NATURALGAS COAL OIL URANIUM SOLIDFUELS DEPENDENCYONIMPORTS2005 79.6 57.5 97 100 31.7 60.42010 81.2 73.7 96 100 40.1 60.12012 86 81 98 100 40 61.32013 87.2 86 96.1 100 44.5 62.7

Source:Ownelaborationfrom(EuropeanCommission,2014),(EuropeanCommission,2015)andBMWin(Morris&Pehnt,2012)

Energy security can be defined as the secure availability of energy at affordableprices.Inthisregard,Germanyisinaparticularlyvulnerablesituationwithregardtoavailabilityandprice,sinceitimportsmostoftheenergyitconsumes.

FordefendersoftheEnergiewende,renewableenergiesreduceGermandependencyonenergyimports,withaconsequenteconomicbenefit,andmakethecountrylessvulnerabletoariseinfuelpricesandtothepoliciesofexportingcountries.

Energy efficiency can also contribute significantly to reducing energy imports. Ascenariowithmoreefficientenergyconsumptioncouldreduceenergyimportsbyapproximately€4billionby2030(ascomparedtoascenariowithnoprogressinefficiency,inwhichcasethefigurewouldcontinuetogrow).

Renewable energies and energy efficiency therefore help to reduce imports,increasingenergysecurityandavoidingdependencyonenergy‐exportingcountries.The energy transition proposed under the Energiewendewould therefore be asolutionforreducingimports.

Localcommunitiesandeconomy

InGermany,about380,000peoplenowworkintherenewableenergyindustryandthe German Renewable Energy Federation (BEE or Bundesverband ErneuerbareEnergiee.V.)estimatesthatthisnumbercouldincreaseto500,000by2020.Thereare also nearly a million jobs in the environmental technology industry (water


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treatmentplants,recycling,etc.)27Nonetheless,asaresultofthecrisisfacingsomecompaniesinthephotovoltaicindustry,thefigureof380,000fellto320,000in2013.However, it should be noted that these figures do not take into account net jobcreation,astherewasareductioninotherenergysubsectors.

Furthermore, it is medium‐sized companies that benefit most from a growth indemandforenergyefficiencyproductsandapplications.Morethanhalfofthesalesrevenueofthesecompanies28comesfromgoodsforenvironmentalprotection(ofwhichenergyefficiencyisasubcategory).

SupportersoftheEnergiewendeareguethatwhen“communities”themselvesinvestinprojects,theeconomicbenefitsmoreagentsthanwheninvestmentismadebylarge companies. As a consequence, citizen ownership of renewable energygeneration systems (distributed generation)providesprofit for the communitiesmakingtheinvestment.Theyfurtherarguethatitisawayofkeepingenergypovertyincheck.29

Nonetheless, there appear to be no studies offering a complete analysis of netemploymentinenergy,takingintoaccountthereductionofemploymentinnuclearindustryandcoal‐firedgeneration.AstudyconductedinMarch2013bytheBostonConsultingGroup,entitledTrendstudie2030+, indicatesthat therealeffectsof theenergytransformationonnetemploymentandGDPcannotbemeasured,partlyduetotheexistenceofpossibledistortionsthatwouldprobablyinfluencetheestimatesofanystudy(BCG,2013b).

Nuclearenergy

The various factors cited above (the rise of the antinuclear movement and theGreens,ChernobylandFukushima)ledtheGermanGovernmenttoadoptaproposalbytheÖko‐InstitutandWWFfornucleardisconnection.

TheresultingcontroversyonnuclearenergyinGermanywasthereforeoneofthefactorsleadingtotheEnergiewende,asifagradualtransitiontowardsclosureanddecommissioning of nuclear plants would remove the risks facing the Germanpopulationandputanendtotheresultingprotestsandoppositionmovements.

Itisalsoarguedthatasaresultoftheenergytransition,therehasbeenanincreaseintheinstallationofnewnuclearplantswithinadistanceof20kilometresacrosstheDutchandFrenchborders.Thisposesariskwhichshouldbeavoidedasitwouldmeanbeingequally“surrounded”bynuclearplants(Sánchez,2014).

27 These numbers must be viewed within the context of a reduction in employment in othercompaniesand/ortechnologies.SeeSection4.6.28Thecompaniesprovidinginformationarethosewithfewerthan250employees.29Energypovertyisdefinedasbeingthesituationinwhichahouseholdisunabletopayforsufficientenergyservices tomeet theirdomesticneedsand/orhavetospendanexcessiveportionof theirincomeonthehouseholdenergybill(AsociacióndeCienciasAmbientales,2015).


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3. THEPOLITICALCONTEXTANDTHEGREENS

We shall now examine the political context in which the Energiewende hasdeveloped.

Amongotherissues,itisnecessarytolookattheroleofdifferentgovernmentsateach stage in the German energy transition, from the first environmentalmovements,throughthe“decision”toimplementtheEnergiewende,tothecurrentsituation.

3.1. Generalpoliticalcontext

TheFederalRepublicofGermanyisademocraticmodelwithamulti‐partysystem.Five major political forces have developed, following the consolidation of theGreens,inthe1980sandthesuccessoftheUnifiedSocialistParty(SED)fromtheformer DDR following reunification of the country in 1990. Indeed, in the 2009generalelections,itwasnotonlytheCDU/CSU30andSPD,(traditionallyconsidered“popular parties” because of their wide transversal representation amongst theelectorate)thatachievedtwo‐digitresultbutalsoanumberof“smaller”formations.

The tablebelowshows thevarious federalgovernmentsand theirparliamentaryrepresentation.

FIGURE1.TimelineofGermangovernments

ELECTIONS GOVERNMENTCOALITIONS CHANCELLORS TERMINOFFICE

I(1949)

SinceWWII

GermanReunification

CDU/CSU+FDP+DPSeats

115/24+52+17

KonradAdenauerPresidentofthe

ChristianDemocraticUnion

15September1949‐

16October1963

II(1953)

CDU/CSU+FDP+DP+GB/BHE191/52+48+15+27

III(1957)

CDU/CSU+DP

Seats215/55+17

IV(1961)

CDU/CSU+FDP

Seats192/50+67

LudwigErhardPresidentofthe


16October1963‐

1December1966

V(1965)

CDU/CSU+FDP

Seats196/49+49

CDU/CSU+SPD

Seats196/49+202

KurtGeorgKiesinger

PresidentoftheChristianDemocratic

Union

1December1966‐

21October1969

30ThepartiesintheUnion,whichbelongtothefamilyofEuropeanChristianDemocraticparties,aretheChristianDemocraticUnion(CDU)andtheChristianSocialUnion(CSU).Althoughthetwoareclosely linked, the formeroperates throughoutGermanywith theexceptionofBavaria,while thelatteroperatesexclusivelyinBavaria(LaactualidaddeAlemania.2015).


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VI(1969)

SPD+FDPSeats224+30

WillyBrandtPresidentoftheSocialDemocratic

Party

21October1969‐

7May1974VII(1972)

SPD+FDPSeats231+41

WalterScheel(Interim)

7May1974‐

16May1974

HelmutSchmidtPresidentoftheSocialDemocratic

Party

16May1974‐

1October1982VIII(1976)

SPD+FDPSeats214+39

IX(1980)

SPD+FDP:218+53

CDU/CSU+FDP174/52+53

HelmutKohlPresidentofthe


1October1982‐

27October1998

X(1983)

CDU/CSU+FDP

Seats191/53+34

XI(1987)

CDU/CSU+FDP

Seats174/49+46

XII(1990) German

Reunification CDU/CSU+FDPSeats

268/51+79

XIII(1994)

CDU/CSU+FDP

Seats244/50+47

XIV(1998)

SPD+B90/Greens

Seats295+47

GerhardSchröderPresidentoftheSocialDemocratic

Party

27October1998‐

22November2005

XV(2002)

SPD+B90/Greens

Seats251/55

XVI(2005)

CDU/CSU+SPD

Seats180/46+222

AngelaMerkelPresidentofthe


22November2005topresent

XVII(2009)

CDU/CSU+SPD

Seats194/45+146

XVIII(2013)

CDU/CSU+SPD

Seats255/56+193

Note:inordertoobtainseatsintheBundestag(GermanParliament)apoliticalpartymustobtainaminimumof5%ofthetotalshareofvotes.

Source:Ownelaboration.

GiventhekeyroleplayedbytheGreensintheEnergiewende(seenextsection),itisworthnotingthattheyfirstenteredparliamentin1983.

ItisalsorelevantthatAngelaMerkeloftheChristianDemocraticUnionwaselectedforasthirdterminofficebytheGermanpopulationin2013,followingthedecisiononnucleardecommissioning(2011)andtheEnergyConcept(2010).

Greensgainfirstparliamentaryrepresentation:(5.7%,28Seats)


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3.2. TheGreens

TheGreenshavehadafundamentalinfluenceonthedevelopmentoftheGermanenergy transition. They promoted essential regulation for the Energiewende,includingtheLawonRenewableEnergies(EEG).Indeed,ashasbeendiscussed,theGreensdeveloped into a political party as a consequence of the first antinuclearmovements.

TheGreens(DieGrünen)31wereformedinthemid‐1970sintheFederalRepublicofGermany (FRG) as an alliance between diverse groups and popular initiatives,mainly representing the “new social movements” (environmentalism, feminism,pacifism, etc.). Several small environmental parties stood in regional and localelections,althoughtheyachievedalmostnorepresentation.However,betweenthattime and the mid‐1980s, some environmental local groups enjoyed a degree ofsuccessinlocalelections,thusbecominganimportantbaseforthefoundationoftheGreenparty.

Thepartywasfoundedon13January1980,mainlyrepresentingtheincipientsocialmovementsofthetime.Followingreunification(1990),in1993theymergedwiththeEastGermancivilrightsmovement,Bündnis90(Alliance90),andwererenamedBündnis90/DieGrünen(Alliance90/TheGreens).However,theGreens’principalvoterbasecontinuestobeinthewestofthecountry.Despiteitsoriginsontheleft,withmostmemberscomingfromarangeofcivilgroups,thepartyhasnowmovedcloser to the centre of the political spectrum. It formed part of the federalgovernment from 1998 to 2005, combining its environmentalism with liberalpositionsoncivilrights(Decker&Neu,1980)(Bündnis90/DieGrünen,2015).

Parliamentaryrepresentation3233

The party first stood on a national platform in the European elections of 1979,headedbyactivistPetraKelly,previouslyamemberoftheSocialDemocraticParty(SPD),andHerbertGruhl,aformermemberofparliament.Thelistwon3.2%ofthevoteandoneseatintheEuropeanparliament.

The Greens first achieved representation in the Bundestag in the 1983 federalelections,whentheywon5.6%ofthenationalvoteand28MPs.

Followingthefederalelectionsof1998,inwhichthecoalitionCDU/CSUandtheFDP(FreeDemocraticParty) failed toachieveamajority,acoalitiongovernmentwasformed, led by the SPD and theGreens,withGerhard Schröder from the SPD aschancellor.ThiswastheGreens’firsttimeingovernmentandalsothefirstcoalitionbetweentheGreensandtheSPDatfederallevel.Atthe2002elections,theGreens

31ForfurtherinformationontheGreens,seeAppendix13.3.32Databelowhavebeengatheredmainlyfrom(Bündnis90/DieGrünen,2015)(Nordsieck,2013)(Sawin,2013)(Marcellesi,2008)and(BMU,2015).33ForadditionalinformationonGermany,seeAppendix13.2.


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obtained8.6%ofthetotalvoteand55seats,itsbestresultstodate,allowingthemtoformagovernmentwiththeSPD.

Between1998and2002,therenewableenergysectorbenefitedgreatlyfromthepresenceoftheGreensinthefederalgovernment.Aneco‐taxwasleviedonenergyconsumption,aplanwasenactedtoabandonnuclearpower(althoughonlyafter2021)andtheRenewableEnergiesAct(EEG)34waspassedintolaw.

Inthefederalelectionsof18September2005,theGreensobtained8.1%ofthevote,a slight fall compared to the2002 results (8.6%).This, combinedwith theSPD’selectorallossesandtheentryofDieLinke(TheLeft)intotheBundestagpreventedanewred‐greenmajorityandtheGreenmovedtotheoppositionbenches.

In recent years, the Greens have continued to enjoy good results in regionalelections,mainly in thewestof thecountry.However, largelyasa resultofpoorshowingsbytheSPD,between2005and2007theyfailedtoentergovernmentinanystate inthefederation. InMay2007,theGreensobtainedtheirbestelectoralresulttodateintheelectionstotheBürgerschaft(regionalParliament)ofBremen35witha16.4%shareofthevotes,enablingthemtoreturntoregionalgovernmentthereincoalitionwiththeSPD.

InApril2008, the firstcoalitionbetweentheGreensandtheCDUwas formed inHamburg,headedbyOlevonBeust(CDU).Thispact,whichsomeyearsearlierwouldhave seemed impossible on ideological grounds, highlighted an increasingrapprochementbetween the twoparties andwas seenas amodel for apossiblecoalitionatafederallevel.However,thecoalitioncollapsedattheendof2010.Inanotherstate,Sarre,aCDU‐FDPcoalitionsurvivedforlonger.

Inthe2009federalelections,theGreensincreasedtheirshareofthevoteto10.7%,but remained in opposition due to the victory of the CDU and FDP. The maincandidatesintheseelectionswereRenateKünastandJürgenTrittin.Inthecomingyears, the party benefited from changing public opinion on nuclear energy,particularlyafter theFukushimaaccident,andfor the first timetheyscoredover20%invoterintentionpollsandmanagedtogainafootholdintheparliamentsofRhineland‐PalatinateandSaxony‐Anhalt.

InMarch2011,theGreensbecamethesecond‐largestpoliticalforceintheregionalparliament of Baden‐Württemberg, obtaining 24% of votes – more than twelvepercentagepointsupontheir2006result.Forthefirsttime,thisgavethemenoughseatstoleadaregionalgovernmentincoalitionwiththeSPD.WinfriedKretschmann(Alliance90/TheGreens)waselectedfirstministeroftheländer.TheseresultswerefurtherimprovedinMarch2016,whentheywon30%ofthevote.

34Hans‐JosefFell,amemberoftheGreens,wrotethedraftfortheEEGwithHermannScheeroftheSPD.Fellwasalsoinvolvedindraftingtheamendmenttothelawin2004.35TheGreens’presenceinthedifferentfederatedstatescanbeseeninAppendix13.3.


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Inthe2013federalelections,theGreenscamefourth,with8.4%ofthevoteand63seats(onelessthanTheLeft,thethirdmost‐votedparty).AtaEuropeanlevel,theyformpart of the EuropeanGreen Party and havemore than 11members in theEuropeanParliament(EP).

Electoralresults

ThegraphsbelowshowtheGreensresults(votesandpercentages)inelectionstothefederalandEuropeanparliaments.36

GRAPH1.Greens:resultsinfederalelections


GRAPH2.Greens:resultsinelectionstotheEuropeanParliament(EP)


36MoredetailsofpoliciesandresultsatfederalandLänderlevelaregiveninAppendix13.3.


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EnergymeasuresproposedbytheGreens

Therelationshipbetweenenergyandtheenvironmenthasbeenanissuethathasconcerned theGreens since theirorigins.This sectiondescribes their ideologicalpositionandtheenergymeasurestheyhaveproposed.37

Inthe1990elections,thefirstinthereunifiedGermany,thepartyhadanassociatednewspaper, TZ, whose slogan was “a newspaper as a lifestyle and as anenvironmentally‐responsible way of life”. They championed closure of thetemporaryradioactivewastestoragefacilitiesatGorleben(northernGermany),afavouritehobby‐horseoftheantinuclearmovement.

In2000,theGreenssupportedtheRenewableEnergiesAct(EEG)toguaranteeacostthatwouldcover the tariffsofpowergeneration frombiomass,windenergyandsolarenergyandtrytoincreaseGermany’sshareofrenewables.38

In2005‐2010,thefederalgovernment,withproposalsandsupportfromtheGreens,earmarkedabout€800mforscientificresearch,limitedtosustainabledevelopment,inthecountry.

ThesloganoftheEuropeanGreenPartyConferenceinBerlinin2010was“Weneedtochangeourminds,notourclimate”.Thecongresswasnotableforpromotingarangeofvalues,suchasasocialEurope,humanrights,environmentalprotectionandjobcreation.

Three months later, in the German general elections, Alliance 90/The Greenscommitted to creatingonemillion jobs in theareasof renewableenergy, energyefficiencyandhealthandcareofchildrenandoldpeople.Theiraimwastotransformecologyintoalifestyle.

AbasicplankoftheGreens’environmentalpolicyissustainabledevelopment.Thisincludes respect for the environment, protection of natural resources and thepromotion of renewable energies. Indeed, in the last elections to the GermanParliament,thefirstitemintheelectoralprogrammestates:“Wearecommittedtoan energy supply that is ‘citizen‐owned’, clean, secure, affordable and of course100%renewable”.

RespectfortheenvironmentandtheabandonmentofnuclearenergycontinuetobethekeypointsoftheGreens’electoralprogramme.In2011,followingalonginternaldebate,theGermanGreensdecidedatabitterextraordinarycongressinBerlintosupportthenuclear“blackout”for2022,proposedbythefederalchancellor.

37BasedonProbst,2007andGómez,2011.38Asmentioned,itappearstohavebeenHans‐JosefFelloftheGreens,incollaborationwithHermannScheer,DietmarSchütz(bothfromtheSPD)andMichaeleHustdt(Greens),whodraftedthelaw.FellwasthereforeinvolvedfromtheamendmentoftheEEGin2004.


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II.ENERGY

4. ENERGYSTRUCTURE

HavingdescribedthewidercontextoftheEnergiewendeandinordertoprovideabetter understanding of the importance and implications of the aims of theprogramme, we need to look at the country’s energy structure, considering itscurrentandpastposition,andwaysinwhichithasdeveloped.

This chapter describes the German energy structure through an analysis of itsprimaryandfinalenergy,oil,gas,coal,electricityandenergyflows.Theprincipalpower companies arealsobriefly examined.Adescriptionof each componentofGermany’s current energy situation is followed by an analysis of its historicaldevelopment,toshowhowthecurrentsituationhasbeenreached.

4.1. Energy.Primaryandfinal

Thissectiondescribestheenergystructureinrelationtoprimaryandfinalenergy.Figuresrefertothecurrentsituationandtrendsoverformeryears.

Currentsituation

Thegraphbelowshowstheprimaryandfinalenergystructurein2014.Throughoutthetext,wewillalsomakereferencetothesamesituationinSpain,asweconsideritaninterestingpointofreference.

It is important tonotethatrenewableenergiesrepresent11.1%of totalprimaryenergyconsumption.This isa longwaybehindotherenergysources, suchasoil(35%),coal(24.6%includingbothhardcoalandlignite)andnaturalgas(20.4%).Onemight draw a comparison between German consumption of non‐renewableprimaryenergysources(55.4%fromhydrocarbonsand80%fromfossilfuels)andthesituationinSpain(62.6%and72.7%respectively).Thisshowstheimportanceofcoal,andthesmallshareofrenewableenergyinGermany(11.1%)(inSpainthefigureis14.5%(2014)).

Graph6showsthefinalenergysituationinGermanyin2014.Here,hydrocarbonsaccount for62%,givinganoverall fossil‐fuel totalof67%.InSpainthefigureforhydrocarbonswas68.4%andforfossilfuelsingeneral,70%.InSpainoilproductsplayamoreimportantrole,whichpartlyexplainsthesedifferences.

Spainhasaconsiderablyhighershareofrenewables–23.5vs.6.6%inGermany.Thelargeshareofoilproductspartlyexplainsthesedifferences.


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GRAPH3.Primaryenergy39(top)andfinalenergy40structure(bottom)inGermanyin2014

Hydrocarbons=55.4%

Fossilfuels=80%

Hydrocarbons=62%

Fossilfuels=67%

Source:Ownelaborationfrom(AGEB,2015)

Mostusageofrenewableenergieswasforgrosspowerproductionandonly6.6%wasuseddirectly(forheating,biofuels,etc.).Thiscomparestoafigureof6.3%inSpain. However, the percentage in Germany is still a long way from theEnergiewendetargetof18%for2020(seeSection5.1below).

39PrimaryenergystructureinSpainin2014wasasfollows:oil,42.7%;naturalgas,19.9%;nuclear,12.6%; hydroelectric, 2.8%;wind, solar and geothermal, 6.4%; biomass, biofuels and renewablewastes,5.3%;coal,10.1%(MINETUR,2014).40FinalenergystructureinSpainin2014wasasfollows:oilproducts,50.8%;gas,17.6%;electricity,23.4%;renewableenergies,6.3%;coal,1.6%;coalgas,0.3%(MINETUR,2014).

Hard coal (12.6%)

Lignite (12%)

Oil (35%)

Gas (20.4%)

Nuclear (8.1%)

Renewables (11.1%)

Other (1.6%) Net power imports (‐0.9%)

Hard coal (4%)

Lignite (1%)

Oil products (38.6%)

Gas (23.4%)

Electricity (21.2%)

Urban heating (4.5%)

Renewables (6.6%)

Other (0.7%)


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Historicaldevelopment

The following tables and graphs show the development of the primary energystructureinGermanyoverrecentyearsintermsofdemandandproduction.

TABLE2.Developmentofprimaryenergyconsumption(Mtoe)

1995 2000 2005 2010 2012 2013341.6 342.3 341.9 333.0 318.6 324.3

Source:OwnelaborationfromEuropeanCommission,2015)

TABLE3.Primaryenergyproductiondevelopment(Mtoe)

1995 2000 2005 2010 2012 2013

Solidfuels(hardcoal)78.9(38.1)

60.6(24.2)

56.5(18)

45.9(9.2)

47.6(7.6)

45.1(5.5)

Oilandproducts(petrolandLPG)

4.3(3) 4.7(3.2) 7.5(3.5) 8.1(2.5) 8.3(2.6) 8.5(2.6)

Naturalgas 15.1 15.8 14.3 11.1 9.6 8.9Nuclearenergy 39.5 43.8 42.1 36.3 25.7 25.1Renewable 6 9 16.9 27.7 32.1 33.7

Non‐renewablewastes 1.4 1.7 1.8 3.9 4 4.1

Total 145.3 135.6 139.1 133 127.3 125.3

Source:OwnelaborationfromEuropeanCommission,2015

Theenergystructurehasbeencharacterizedbyafallindemandofalmost14%inthe same period. There was also an almost complete collapse of domestic coalproduction,whiletheriseinrenewableshasnotcompensatedforthereductioninfossilfuelandnuclearpower.

GRAPH4.Developmentofconsumption(left)andprimaryenergyproductionperyearandaccumulated(Mtoe)

Source:OwnelaborationfromEuropeanCommission,2015

TurningtothedistributionofenergybysourceinGermanprimaryenergyoverthelast century (see graph below), one can distinguish different periods. From the1920son,coal(ligniteandhardcoal)waswidelydominantwithpercentagesof40‐

+0.2%‐0.1%

‐2.6%

‐4.3%

+1.8%

305

310

315

320

325

330

335

340

345

Mtoe

‐5.1% between 1995 and 2013

‐6.7%

+2.6%‐4.4%

‐4.3%

‐1.57%

115

120

125

130

135

140

145

150

Mtoe

‐13.8% between 1995 and 2013


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50% of hard coal and 20% of lignite. This situation continued until the 1960s.Betweenthe1950sandthe1970s,anddespiteafallintheshareofhardcoal,theproportion of lignite remained constant. From 1970 (see graph below), nuclearenergybegan to gain in importance, as did gas,which grewquite sustainably toattainashareofcloseto20%.Finally,inthe1990sandfollowingyears,theshareofcoalweakenedandstartedtodecline,coincidingwithastrongfallinnuclearenergy.Allofthesefactorsencouragedfosteredagrowthingaswhileoilremainedstable.

Renewables,firstintroducedinthe1970s,sawgreaterandmoresustainedgrowth,particularlyinthecaseofbiomass,risingtoashareofnearly10%.

GRAPH5.Historicaloriginsofprimaryenergybysource

Source:Ownelaborationfrom(EuropeanCommission,2015)

The implementation of nuclear energy was conditioned by restrictions imposedafterWorldWar II. The allies (France, United States and the UK) occupying thewesternareaofthecountryavoidedobstructingtheintroductionofnuclearpower,inordertofacilitatethedevelopmentofanindustrialbase.

The construction of facilities for fuel enrichment and waste treatment, wasconditionedbytheriskofarmsmanufacturing.TheaimwastobuildpartnershipsbetweenGermanyandthirdcountries.Forthisreason,theUnitedKingdomandtheNetherlands (Treaty of Almelo, 1970) allowed projects to be developed throughinternationalisation(Ruttem2014).

Asregardsfinalenergy,thetableandgraphbelowshowtrendsbetween1995and2013,whenadownwardtrendbegan(particularlyintheuseoffossilfuels)withagrowthinelectricityandrenewables.

Hardcoal

Oil

Gas

Lignite

Biomass

Hydroelectric

Nuclear

Wind

Solar,geothermal,tidal


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TABLE4.Developmentoffinalenergyconsumption(Mtoe)

1995 2000 2005 2010 2012 2013Solidfuels 13.9 11 8.2 9.4 9.6 9.7

Oilandproducts 105.6 99.7 90.3 83.2 81 83.9Gases 51.8 56.1 55.1 56.5 52.9 55.2

Biomassandrenewablewastes

2.7 4.7 8.5 12.1 11.6 11.9

Solar 0 0.1 0.3 0.5 0.6 0.6Geothermal ‐ ‐ 0 0.1 0.1 0.1Electricity 38.8 41.6 44.9 45.8 45.2 44.5

Derivativeheat 8.7 6.8 10.8 11.3 10.3 10.4Non‐renewablewastes ‐ ‐ 0.3 1 0.9 1

Total 221.6 220 218.5 219.7 212.1 217.3


GRAPH6.Developmentoffinalenergyconsumptionbyyearandtotal(Mtoe)


4.2. Oil

Currentsituation

In2013,Germanyproduced2.6Mtofoil,accountingfor2.8%ofitsdemand.Theremainderofthecountry’sconsumption,97.2%(90.4Mt),41wasimportedatacostof€55.3billion,provingmoreexpensivethancoalorgasimports(Amelang,2015).ProductionandthegeneralsituationareshowninamapinAppendix13.5.

Theconsumptionofoilproducts,whichaccountedfor35%oftotalprimaryenergyin2014,hasbeengraduallyreducedsince1995,asTable12shows;theprincipalconsumer industries have been transport and heating. Based on these figures, itseems unlikely that the Energiewende, which focuses so heavily on powergeneration,willhaveamajor impactonoildependency.Nevertheless,whatmay41Bycomparison,importsinSpaincameto57.8Mtin2013(MINETUR,2013).

‐0.7%

‐0.7%

+0.6%‐3.5%

+2.5%

206

208

210

212

214

216

218

220

222

224

1995 2000 2005 2010 2012 2013

Mtoe

‐1.9% between 1995 and 2013


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drive a reduction in consumption is the plan to increase vehicle efficiency andreduceGHGemissionsbypromotingelectricvehicles.

Inanycase,oildependencyishigh,makingtheGermaneconomydependentmainlyonsuppliesfromRussia(31.4Mtor35%in2013),followedbyNorwayandUK(11Mt and 9.3Mt respectively). The graph below shows a diversification in supplyroutes(six).

GRAPH7.Oilimportroutesin2006

Source:Ownelaborationfrom(BGR,2009)

Mostoftheoilinfrastructureshowninthefigurebelowisalegacyofthecountry’spre‐reunificationwest,whererefining facilitieswerebuiltontheperiphery,neartheboundariessharedwithneighbouringcountriesthroughwhichoilpipelineshadtopass(astheystilldo).Theinterchangecapacityofoilproductsthroughthispartofthenationaloilstructurecurrentlystandsat2,530kb/d,ascomparedto745kb/dthroughthecountry’seasternboundaries.

8

Others (6%)

Wilhelmshaven (26%)

Trieste (24%)

Druzhba pipeline (21%)

Rotterdam (15%)

Lavera (8%)


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FIGURE2.Oilinfrastructure

Source:(IEA,2014a)

Totalrefiningcapacitycameto2,060kb/din2014(Statista,2015).ThelocationandownershipoftherefineriesareshowninAppendix13.5;notethestrongpresenceof the leading oil and gas companies, such as Shell, BP, Esso and Eni. DifferenttechnologiesarealsoshowninAppendix13.5.

Despiteareductionininvestmentinrecentyears,therefiningindustryhasadaptedtoitsdeterminants,suchasenvironmentalimprovements,whichaccountedforanaverageof20%oftotalinvestmentsbetween2007and2012,asGraph12shows.Thiscanbecomparedtootherindustrialsectors,suchasmanufacturing,wheresuchinvestmentsaccountedforjust8%inthesameperiod(AssociationoftheGermanPetroleumIndustry,2015).


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GRAPH8.Recentinvestmentsinrefining

Source:(AssociationofGermanPetroleumIndustry,2015)

Historicalevolution

OilproductioninGermanypeakedduringthe1960sandpartofthe1970sat8‐9Mt/year.Sincethen,productionhasgraduallyfallen,to3Mtin2007and2.7Mtin2013.

Imports from other countries have also declined, with supply sources graduallyshiftingfromtheMiddleEastandAfricatowardsWestEuropeandRussia‐Eurasiaduringthesameperiod,asthegraphbelowshows.


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GRAPH9.Oilproduction(above)andimportsbyorigin(below)

Source:(BGR,2009)

Development of the industry is linked to a parallel development in the refiningindustry.InThefollowinggraphsshowhowafallinproductionandimportsledtohighrefiningcapacityin1980(3,422kb/d)afigureneversubsequentlymatched.By 2014, capacity had fallen to 2,000 kb/d. Despite the strong investment inenvironmentaladaptation,therehasbeenageneralreductionincapitalinflow.

This contraction in oil processing has had an effect on the use of refineries inGermany,ascanbeseenbelow.Followinganinitialsurplusincapacityfrom1980to the mid‐1980s, during the following 20 years facilities were in full use (theincrease in imports from1985canbeseen in the followinggraph).Finally, from2005,therewasareturntoasituationofsurpluscapacity.


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GRAPH10.RefineryuseinGermany

Source:(HWWI,2010)

GRAPH11.Nationalrefiningcapacity(thousandbarrelsperday)

Source:elaborationfrom(Statista,2015)

4.3. Gas

Currentsituation

Germany consumed 91 bcm in 2013, of which 90% was imported.42 Domesticproduction currently stands at 9.7 bcm, although output from German fields isexpectedtofalloverthenexttenyears.Mostgasisusedfordomesticandindustrialpurposes, accounting for only a small share of the powermix (Amelang, 2015).

42Forcomparison,gasimportsinSpaincameto375,421GWhin2013MINETUR,2013).


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These gas fields and the general situation of extraction are shown on amap inAppendix13.5.

In2013,39%ofallimportedgascamefromRussia.OthermajorsuppliersincludedNorway and Holland. Practically all gas comes to Germany through large gaspipelines, whilst liquefied natural gas (LNG) is exclusively imported from entrypoints in neighbouring countries (Zeebruge LNG in Belgium and Gate LNG inHolland),andthecountryhasnoregasificationplantsofitsown.

Thepossibilityof importing liquefiednaturalgasthrough itsowninfrastructuresrequirespoliticalandfinancialsupportforsomeoftheprojectsconsideredinrecentyears.Mostof these initiativeshavecentredontheterminalatWilhelmshaven,a€1.5 billion project which failed to get a green light, partly due to existinginfrastructuresinHolland(DerTagesspiegel,2015).TheprojectiscurrentlybeingreappraisedtoallowtheplanttobeusedinthefutureforLNGsupplyforbunkeringshipsandLNGfortrucks.

Anotherterminalforgasimportsisalsounderconsideration,althoughforthetimebeingtheprojecthasnotbeen launched.This is theoneatBrunsbüttel,whichat€500 million is considered more affordable than the other (DVZ, 2015). OtherprojectsinwithachancearethoseinHamburgandLübeck.Inthesecircumstances,theonlyprojectstillinwithastrongchanceisasmall‐capacityterminalinRostock,whichwould be developed in collaborationwith the Russian company Gazprom(GIE,2015).

Germanyhasamajornetworkofgaspipelines.Asthefollowingfigureshows,theseprovidethecountrywithvariousconnectionsacross itsborderswithPoland,theCzechRepublicandAustria,throughwhichRussiangasisimported.Therearealsoimportant connections with the Netherlands and the North Sea, which allowGermanytoimportgasfromtheNorthSeaandNorway.

OneofthemostimportantofthegaspipelinesistheNordStream,whichcameonline in2011andallowsdirectconnectionbetweenWesternEurope(throughtheBalticSeaandGermany)andRussia,thusavoidingEastEuropeantransitwithitsgeopolitical complexities. This consists of a 1,220 km pipeline with an initialcapacityof27.5bcmperyearwhichwasextendedwithasecondpipelinein2012,togiveacapacityof55bcmperyear.


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FIGURE3.Gasinfrastructure

Source:(IEA,2014a)

However,thisconnectiondoesnotimplyareductionindependencyonRussiangas(60bcmwhichdoesnotcomedirectlyfromRussiaasopposedto258bcmthatdoes)andnocomparisoncanbemadebetweenroutesnotpassingthroughtheEastandthosethatdo(115bcmvs.203bcm).

TABLE5.MainsupplygaspipelinestoWesternEuropethroughGermany

Pipeline Annualcapacity(bcm)NordStream 55

UkraineCorridor 170Yamal‐Europe 33EuropipeII 26EuropipeI 18Nordpipe 16

Source:Ownelaborationfrom(NordStream,2009)

Inaddition,Germanyhasvariousstoresofnaturalgas,oilandoilproducts,locatedinvariousplacesinthecountryasreserves,showninamapinAppendix13.5.


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AsseenintheassessmentofprimaryenergyinGermany(Graph3),gasexperiencedsteadygrowth fromthe1970s,outstripping lignite in the1990sand leading toahistoricchangeintheenergymix,sinceoilisthesourcewiththegreatestweightinGermany.

Domesticgasproductionandimportsbothsawcontinuedgrowthupto2005.Inthefollowingdecade,productionflatlinedwhileconsumptiondeclinedsomewhat.ItisimportanttonotethattheincorporationofimportedgashasbenefitedNorwegian–and particularly Russian– imports, without a similar effect on imports fromHolland,despitethiscountryhavinganinitialmajormarketshare.Anoverviewofproductionandimportscanbeseeninthegraphbelow.

GRAPH12.Domesticgasproductionandoriginofimports

Source:(BGR,2009)


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4.4. Coal.Ligniteandhardcoal.

Currentsituation

CoalplaysanimportantroleinGermany’spowermix,althoughdependencyvariesfromonekindofcoaltoanother;inthecaseoflignite,importsarenotrequiredbutforhardcoaltheyare.Together,thetwoaccountedfortotalconsumptionof241Mtin2013.

Lignite is particularly important.Thehighproduction rate in the country,whichconsistsof183Mtsetaside forgeneration,43makesGermanytheworld’s largestligniteconsumer,whileitalsohasimportantreserves.Despitethis,on2July2015,Germany agreed to close its large lignite plants before 2020. This will involvedisconnecting13%oftotallignitecapacityor2.7GWfromthegrid(Amelang,2015).ThisagreementwithChancellorAngelaMerkelwassignedbytheFederalMinisterofEconomyandEnergy,SigmarGabriel,andtheleaderoftheSocialChristianUnion(CSU),HorstSeehofer,44inanattempttoachievecarbonreductiontargetsof11MtofCO2emissionsperyear.

TheCDUleadersaidshewasconvincedthatGermanycouldmeetitscommitmenttoreduceGHGemissionsby40%in2020,althoughsheacknowledgedtheneedtostrikeabalancebetweenthattarget,jobprotectionandasustainableenergysupply.Shealsopointedoutthat“wehaveneverpromisedthatwewouldhaveabandonedcoal by 2020, but this is still a cornerstone of our longer‐term strategy” (EFE,2015a).

Somecoalplantsareparticularlyimportant,sincetheirlargecapacitieshavecreatedimportant economies of scale, which togetherwith the associated lignitemines,involvemajorinfrastructures.OnekeyexampleistheligniteplantinJänschwalde(Brandenburg)which has a capacity of 3,000MW and is operated by VattenfallEuropeGeneration.

Thefigurebelowshowsanopen‐pitlignitemineintheJänschwalderegion.

43Bycomparison,inSpaintheconsumptionofligniteforpowergenerationin2013cameto1.6Mt(MINETUR,2013).44(Fortaleza,2015)


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FIGURE4.LignitemineinJänschwalderegion(Brandenburg)

Source:(TAZ,2013)

Thecompetitivenessoflignitemeansitcanbedevelopedwithoutsubsidies,makingGermany the world’s largest consumer and producer of this kind of fuel,outstrippingevenAustralia,RussiaandtheUS,withestimatedreservesof5billiontonnesincurrentexploitations(Appunn,2015).Theseconcessionsareforopencastprojectsinveinsclosetothesurface,whichoccurinfourmainareas:theRhineland,Lusatia,CentralGermanyandHelmstedt(seeFigure5).


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FIGURE5.Coal(ligniteandhardcoal)locationsandlignitemines

Lignite

extractionareas

NumberofMines

Owneroroperator2005

(milliontonnes)

2012(milliontonnes)

Variation(%)

Rhineland 3 RWEPower 97.2 101.7 4.64

Lusatia 5VattenfallEurope

MiningAG59.7 62.4 4.53

Helmstedt 1

BraunschweigischeKohlen‐BergwerkeAG(BKB),whichis100%

ownedbyE.ONKraftwerkeGmbH

2.1 2 ‐4.79

CentralGermany

2Mitteldeutsche

BraunkohlengesellschaftmbH(MIBRAG)

19.1 19.2 0.73

1 RomontaGmbHBavaria ‐ ‐ 0.032 0 ‐100Total 12 ‐ 178.2 185.4 4.23

Source:(IEA,2013)

Less than10%ofnationalproduction isused formanufacturingcommercialanddomesticfuelintheformofbriquettesandpulverized.


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Asforhardcoal,despitetheexistenceofminesinthecountry,90%isimported–53milliontonnesin2013.45Aswithoil,Russiaisthemainsupplier,accountingfor29%ofimports,whilstothersourcessuchasColombiaandtheUS,represent21%and20%respectively.Theseimportsaresettorise,asGermanyhasdecided46tocloseallhardcoalminesby2018,whichwillmeanimporting100%ofitsrequirements.Thegraphbelowshowsthemainsourcesofimports.

GRAPH13.Importroutesforhardcoalin2007

Source:Ownelaborationfrom(BGR,2009)

Asthegraphaboveshows,importedhardcoalmainlyentersGermanybysea,andwithin this route, most commercial volume comes through the “ARA” portsd(Amsterdam,RotterdamandAntwerp).Theremaindercomesbyrail,mainlyfromPoland(BGR,2009).

Domesticproductionisconditionedbytheprofitabilityofthisactivity.Iftheaveragecostofimportingandminingarecompared,theformercameto€79pertonnein2013,whereasthelattercost€180pertonne.Thefateoftheindustryisthereforesealed,andtherearenolongtermprojectsforthe36milliontonnesofextractablehardcoal(of the86billionestimatedtoremainunderground),particularlygiventhatsubsidieswillendin2018,underanagreementbetweengovernmententities,theGermanHardCoalCorporation(RAGCorporation)andtheMining,ChemistryandEnergyIndustryUnion(IGBCE).Asaresult, just threeminesnowremaininoperation,allinNorthRhine‐Westphalia(Appunn,2015).Subsidiesin2014cameto€1,658million(whichcanbecomparedwiththe€20billiongiventorenewables,Graph52),asshowninthetablebelow.

45InSpain,bycomparison,theconsumptionofhardcoalforpowergenerationwas13.5Mtin2013(MINETUR,2013).46(EFE,2007)

ARA ports (47%)

German ports (23%)

Rail (30%)


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TABLE6.MaximumsubsidiesbytheFederalGovernmentandNorthRhine‐Westphalia(millioneuros)

2014 2015 2016 2017 2018 2019Federal

Government1,284.8 1,332.0 1,053.6 1,020.3 939.5 794.4

NorthRhine‐

Westphalia363.8 171.4 170.9 161.2 151.5 220.6

Source:BMWi(2015a).


Toaverylargedegree,ligniteandhardcoalhavedeterminedthedevelopmentofGermanindustrysincetheIndustrialRevolution.Indeed,asalreadymentioned,itwasnotuntilthe1970sthatcoalclearlylostgroundintheprimaryenergymix,withtheriseofgas.

In domestic production terms, hard coal production grew significantly until the1950s,whileproductionof lignitecontinuedtogrowuntilthe1990s.Ligniteandhardcoalthusfollowedseparatepaths,resultinginopposingimportrequirements(noneforlignite,highforhardcoal).Onlyinthemid‐1940s,followingdefeatintheSecondWorldWar,canasimilartrendbeseenforthetwo.Thisisalsotrueofthedownward trends in domestic production, although the reasons are perhapsdifferent, political and competitive, given that large quantities of lignite are notconsidereddesirableinthefuture.

GRAPH14.Historicalvariationinhardcoalandligniteproduction

Source:(BGR,2009)

4.5. Windenergy,photovoltaicsandbiomass

Althoughwewilldescribetheindustryrelatedtowindenergy,photovoltaicsandbiomassingreaterdetailinChapter10,thissectionwillofferanintroductiontotherenewableenergysourcesthathavebeenintegrated,intheformofprimaryenergy,inGermany’spowergeneration.


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Thecountry’spotentialforwindenergyissignificantlygreaterthanforphotovoltaicpower.Thenorth‐west is themostsuitablearea forerectingwindturbines,bothonshoreandoffshore(inshallowNorthSeasites).Therefore,mostoftheelectricitybeinggeneratedinGermany,nowandpossiblyinthefuture, isnotlocatedinthecountry’sindustrialcentres.

Inthecentreandsouthofthecountrythereisgreatpotentialfordevelopingwindenergy. The amendment to the Renewable Energy Sources Act in 2012, a slightundersellingofwindturbinesandtechnologicalprogresshaveallhelpedtomakeincreasingnumbersoflocationsviable.

ThewindspeedatwhichGermanwindturbinesoperaterangesbetween3.7and7.9m/s(6.3m/sforplacesnearthecoast)foronshorefarms,andbetween7.9and10.3m/s for offshore farms, taking a hub height of 80 metres. We can thus make acomparisonofworkinghoursatfullload,sincetherangeforonshoreinstallationsis between 1,500 and 1,800 and for offshore facilities between 2,800 and 4,000(historical averages between 2006 and 2011, Peter et al., 2015). The highestonshorewindsinGermanyarefoundalongthenortherncoast,duetoseabreezes.Thewindinthisareaatanaltitudeof10metresabovesealevelisinexcessof5m/sonhalfthedaysoftheyear.Inaddition,inlandareasfromNorthRhine‐WestphaliatoBrandenburgalsohavesuitablewindconditions.

Overrecentyears,forexample,high‐performancewindturbinesontowers,withahub height of 100metres ormore, havemade it possible to build economicallyprofitable wind farms. Revenue for the government from leasing and taxingeconomicactivities,theresultingboosttolocaleconomies,anenergysupplywithgoodfutureprospectsandapositivesocialimage(intermsofclimateprotection),are becomingmore andmore important factors in the decision to zone land aspreferential(GorozarriJiménez,2012).

As for photovoltaics, most of Germany’s installations are located in Baden‐Württemberg and Bavaria, the regions with themost hours of sun. Engineeringcompanies and the capital goods industry are also located in these regions(GorozarriJiménez,2012).


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FIGURE6.LocationofsolarphotovoltaicinstalledcapacityinGermany(MW)

Mainstatesforphotovoltaicpower

(MW)Bavaria(BY):11,094

Baden‐Württemberg(BW):5,083

NorthRhine‐Westphalia(NRW):4,191

LowerSaxony(NI):3,461

Brandenburg(BB):2;921

Source:(AgenturfürErneuerbareEnergiene.V.,2015)

Theseareas,locatedinthesouth‐westofthecountry,havethebestconditionsforthis activity (in terms of irradiation, population density and per‐capita income).Manyofthebenefitsrelatedtothephotovoltaicsindustryarereceivedbycompaniesbasedintheseregionsandnotelsewhereinthecountry.Developmentoftheeasternregions, where photovoltaic production plants are installed, has also beenimportant.

FIGURE7.AreasinGermanywithmosthoursofsunshine(h/year)andsolarirradiation

Source:(DENA,2015)and(Peteretal.,2015)


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Asforbiomass,agricultureisanimportantsupplierofresourcesforenergyuse.In2011about2,000,000hectaresinGermanyweregivenovertoenergycrops,nearly17%oftotalcropland.Themainuse,accountingforapproximately910,000hectares(2011), was for production of biodiesel from rape. By 2020 between 2.5 and 4million hectares of agricultural land are due to be producing renewable rawmaterials (Gorozarri Jiménez,2012). In2014,7%ofGermanpowerdemandwasmetbybiomass.

FIGURE8.LocationofbiomassandbiogaspowerinGermanyin2012(kW/km2)

Source:(DENA,2012)

4.6. Electricity

This section discusses the current situation of electricity in Germany and itshistoricaldevelopment.

Currentsituation

Aswehave seen, electricity inGermanyaccounted for21.2%of the final energyconsumed in2014(ascompared to23.4%inSpain).Thismeanta total installedcapacitythatyearof192.3GW(Fraunhofer,2015).

The graph below shows the installed capacity by technology type and the highpercentageofrenewablepower(43.2%).Notably,photovoltaicandwindenergiesaccountforalargersharethanfossilfuelsornuclearpower.

Indeed,Germanyhasoneofthehighestlevelsoftheseenergysourcesandin2012itwastheworldleaderinboth(inthecaseofwind,itmatchedChinaandtheUS).In2012 Germany accounted for 32% of the world’s installed wind capacity (with37.2%fromtherestoftheEUand30.8%fromtherestoftheworld).Inthecaseof


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wind,Germanyaccountedfor12%inthesameyear(UnitedStates21%;China27%;restofworld40%).

In2015, renewablepowersurpassed100GW(83GW in2014)andrepresentedmorethan52%oftotalpowerintheGermanelectricitysystem(about196GW).

GRAPH15.InstalledcapacityinGermanyin2014(MW)

Source:OwnelaborationfromBNetzAin(AgoraEnergiewende,2015c)

The installed capacity comes from a variety of power plants located throughoutGermanterritory.Thepositioncanbeseenonthemapbelow.Graph31showsthecapacitiesofeachgenerationcentreonamappublishedbyUBA(2014),47whichprovidestheupdatedsituationinthetransmissiongrid.

47http://www.umweltbundesamt.de/sites/default/files/medien/376/bilder/dateien/kraftwerke_und_verbundnetze_in_deutschland.pdf

Hard coal 28,115

Lignite 21.206

Nuclear 12,068

Gas 28,403

Other 18,673

Wind 34,638

Hydroelectric 3,918

Biomass 6,383

Solar 37,448

Other RE 1,447

RE 83,834


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FIGURE9.Locationofpowerplantsfrom100MWgrosspower

Source:(BGR,2009)

Ligniteplantshavehighinstalledcapacity,butalsohavevariousunitsinthesamelocation.Thegraphbelowshowstheplantswiththehighestinstalledcapacity.


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GRAPH16.Largestligniteplantsin2014

Source:elaboratedfrom(Statista,2014)

FIGURE10.Jänschwaldepowerplant

Source:(FAZ,2010)

ItisimportanttonotethatGermanyisalsobuildingseveralfossilfuelplantsofover100MWindifferentlocationsinthecountry.


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FIGURE11.Newfossilfuelplantsofover100MW

Source:(KraftwerkeInvest,2015)

New generation from hard‐coal thermal power plants began in 2013, with thecommissioningoftheDortmundplant(750MW).Atthattime,completionof10newhardcoalplantswasscheduledforthenexttwoyears,givingatotalof7,985MW.ThiswouldincreaseGermany’shardcoalcapacityby30%(Pei,2013).

IfwetakeintoaccountthelowCO2emissionstradingpricesintheEuropeanTradeSystem,coaliscurrentlymorecost‐effectivethangas,markinganincentivefortheuseof lignite,despite the fact that ithashigherCO2emissions.Germany’s lignitecapacityisapproximately20GWe,takingintoaccounttheadditionofnewplantswithhigherefficiencyin2011(about3GWe).PowerproducersinGermanyplannedtoinstall5.3GWeofcoalcapacityby2013,accordingtostatisticsfromthefederaldistributionagency(BNetzA).

Coal capacity currently being built anddue to be connected to the grid in 2016,includes: RWE‐Hamm Westphalia 750‐800 MW; RWE, EnBW & MVV Energie‐Mannhem900MW,Vattenfall‐HamburgMoorburg1640MW;E.ON‐Dattein1000‐1100MW.RWEyE.ONalsohave2650MWofpowerintheNetherlands.


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Between2011and201510.7GWofcapacityfromnewcoalplantswasconnectedtothegrid,largelyasaresultofplansdevelopedbeforeMarch2011,ratherthanasareactiontothephasing‐outofnuclearpowergeneration.

InJuly2015,aftermonthsofintensenegotiations,thegovernmentannouncedthatitsproposaltoclosecoalplantswouldnotberevisited,butabout2.7GWoflignitegeneration (representing approximately 13% of total installed lignite capacity)wouldbegraduallytransferredtoreservecapacitybetween2016and2020,underadealnegotiatedbetweenRWE(1.5GWe),Vattenfall(1.0GWe)andMibrag(WorldNuclearAssociation,2016).

Thesenewprojectscanbeseenaspartoftheprocessforrenewingcoalplantswithnewtechnologiesofferingbetterefficiencyandperformance.

Asforwindgeneration,thefigurebelowshowsthedistributionofwindfarms,whichtogether make up 39,209 MW of installed capacity. Wind determines the windgeneration, so the onshore farms are placedmainly in thewindiest locations ofGermany,intheNorth.

FIGURE12.LocationofinstalledwindpowerinGermany(MW)

Principalwind‐powerstates(MW)

LowerSaxony(NI):8,355Brandenburg(BB):5,627

Schleswig‐Holstein(SH):5,389NorthRhine‐Westphalia(NRW):

3,774Rhineland‐Palatinate(RLP):

2,808Mecklenburg‐Vorpommern

(MV):2,734

Source:(AgenturfürErneuerbareEnergiene.V.,2015)andownelaboration.

Anotherexampleofoffshorewindgeneration,basedonwhichgreataccelerationandexpansioncanbeexpectedinthenearfuture,isshowninthefigurebelow.


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FIGURE13.LocationofoffshorewindturbinesinGermany

Source:(BWE,2015)

Themake‐upofthegenerationsystemisintrinsicallylinkedtotheinfrastructureofthepowergrid,whichisaresultofhistoricaldevelopmentandisdependentonthelocationofpowerplants and areasof large consumption, as shown in the figurebelow.


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FIGURE14.Germany’spowergridandtransmissionsystemoperators,byareasofcontrol

Source:(NETZ,2012)

ThepeculiarhistoryofGermanyduringthesecondhalfofthe20thcentury,whichwasconditionedbythedivisionofitsterritory,isreflectedintheconfigurationofthe transmission grid operation. Four transmission system operators (TSOs),currentlydividethegridintodifferentregions:Amprion,50Hertz,TransnetBWandTenneT.Keycharacteristicsofthefourareshowninthetablebelow.

TABLE7.Transmissionsystemoperators

Linelength

Areacovered

Consumersinarea

HeadquartersNumberofemployees

Amprion 11,000km 73,100km2 27million Dortmund 1,000

TenneT 10,700km140,000km2

20million Bayreuth 1,000

50Hertz 9,750km109,360km2

18million Berlin 800

TransnetBW 3,200km 34,600km2 170.9 Stuttgart 340

Source:Ownelaborationfrom(NETZ,2012)

Ofthefouroperators,thelargestbylinelengthandnumberofconsumersinitsareaof operation is Amprion, followed by TenneT, 50Hertz and TransnetBW. Oneimportantpointofdifferentiation is that50Hertzoperates40%ofGermanwindpower(NetzEntwicklungsPlan,2012),givingitanessentialroleduetoitsweightinBalticSeaoperations.

The entire transmission grid operated by the four TSOs comprises over 34,650kilometres,butthisisnotthelongestsectorinthetotalgrid.Thegreatestlengthis


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foundinlowvoltagelines,followedbymediumvoltageandhighvoltagelinesandfinally the transmission grid; as the table below shows. In all, there areapproximately1.79millionkilometresofgrid,operatingatafrequencyof50hertz,thesameasinotherEuropeancountries(Peteretal.,2015).

TABLE8.ListofGermanpowergridsbyvoltage

Grid Voltage TotallengthTransmissionvoltage 220–380kV 34,979km

Highvoltage 110kV 96,308kmMediumvoltage 10–30kV 509,866kmLowvoltage 230/400V 1,797,938km

Source:Ownelaborationbasedon(Peteretal.,2015)

ThisstructuremakestheGermanpowergridthemostcomplexinEurope.Partofthedistributiongridisoperatedbyover800differententities(DSOsorDistributionSystemOperators),whichsupplypowerdirectlyto20,000municipalities.Amongthem,about700areknownasstadtwerke(explainedfurtheroninthissectioninthedetaileddescriptionof the companies),whilstmore than three‐quarters ofDSOssupply to less than 30,000 consumption points. The four largest generationcompanies(E.ON,Vattenfall,RWEandEnBW),alsostudiedinthischapter,haveanimportantshareofthedistributionsystem,sinceconcessioncontractsforoperatingmunicipalgridscanhaveatermof20years.UndertheEnergyIndustryActof2005(see Chapter 6) these contractsmust be reviewed to ensure non‐discriminatoryconditions. This might lead to the cancellation of some concessions, favouringsmallerdistributorssuchasthestadtwerke(AgoraEnergiewende,2015d).TheDSOsthereforeplayanessentialroleinthedevelopmentofthedecentralizeddistributionpursuedbytheEnergiewendeasapowermodel.

Thefourlargestcompaniesintheareaofgenerationanddistributionalsohavealargeshareinmarketingpowertothefinalconsumer–45.5%in2012.ThesearelargeconsumersandgivenGermany’shighdegreeofindustrialization,in2013theyaccounted for 48% of consumers, as compared to domestic consumers (whichalthoughthemostnumerous,accountedforjust27%)andindustryandthesmallbusinesssector(25%)(AgoraEnergiewende,2015d).

Giventhatthisgridrequiresadaptationsandenlargement,asexplainedinBlockI,thegenerationsystemwillalsoneedimportantmodifications,bothintermsoftheremovalof lignite,hardcoalandnuclearplantsand in termsof introducingnewsystems.

Powerandproduction.Currentsituationandhistoricdevelopment

Capacity(seeprevioussection)cameto614TWhgeneration(AgoraEnergiewende,2015c),asshowninthegraphbelow.


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GRAPH17.CoverageofpowerdemandinGermany(above)andSpain(below)in2014

Note:datainparenthesesinthefigureabove,arefor2013.

Source:elaboratedfrom(Appunn,2015;RedEléctrica,2015)

Asregardspowergeneration,in2014renewableenergysourcescontributed26.2%(157TWh)48totheGermanpowergrid,49and41%hadnoCO2emissions(includingnuclearpower).Bycomparison,Spainhasalargeinstalledcapacityofrenewables,

48In1980itwasthoughtthatfortechnicalreasons,thepowersystemcouldnotaccommodatemorethan4%ofrenewables(VonHirschhausen,2014).49(AgoraEnergiewende,2015c)(DENA,2015)


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covering42.8%ofpowerdemandin2014(mainlywindandhydro),and66.5%iscarbon‐free (including nuclear power) (see former graph). Generation fromrenewablesisforecast50tobe176TWhfor2016.

Historically,renewablegenerationremained“stuck”at20TWhuntil1990,andgrewonlyslightlyinthedecadebetween1990and2000(seeGraph20).

In2013windenergyaccountedformostrenewablepowergeneratedinGermany(35%), followed by photovoltaic (PV) (20%). In meteorological terms, southernGermanyistheregionbestsuitedtoPVenergy,althoughaveragesolarirradiationisstillonlycomparabletoAlaska.51

Weeklydevelopment,dispatchpriorityandvariationinwindandsolaroutputcanbeseeninthegraphbelow,whichreflectsthedramaticreductioninhardcoalandgastoaccommodatewindandsolarpower.52

On27July2015,53anunusualcombinationofsunnyweatherinthesouthandstrongwindsinthenorthenabledthecountrytoattainrecordlevelsofrenewableoutput,with78%(47.9GW)ofinternalpowerdemandbeingmetbyrenewablesourcesforseveralhours.

GRAPH18.PowersituationinGermanyinthe30thweekof2015(GW)

Source:(FraunhoferISE,2015a)

50(NETZ‐TRANSPARENZ.DE,2015)51 Annual GHI (global horizontal irradiance) is particularly important in any assessment of thepotential of photovoltaic energy. Germany has between 951 and 1,257 kWh/m2/year (with anaverageof1,055kWh/m2/year).Thissituationmeansthattheperformanceofphotovoltaicpanelsiscurrentlycharacterizedbylossesof15%inefficiency(dependingonexternaltemperature)andarangeofbetween536and1,014full‐loadhours(withanaverageof912hours)in2012(Peteretal.,2015).52Twoissuesarenotanalysed:pricesandthefactthatsolarandwindenergiesenjoyFiTandenterthemarketatpricezero.53(Roca,2015)


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Thisvariationandaccommodationofhardcoal (andalso lignite)productioncanalsobeseeninthegraphbelow,forSeptember2015.

GRAPH19.PowersituationinGermanyinSeptember2015(GW)

Note:datainthetableshowninthegraphindicatesthecompositionofpowerproductionon28September2015at18.00.

Source:(FraunhoferISE,2015a)

Eventhisfigurewasrecentlyexceeded,withanewrecordof81%beingseton26

December2015.


Graph20showsthehistoricalvariationinthepowermix.Asinthecaseofprimaryenergy,theimportanceofREincreaseswhenthecoalshareisreduced.Coalplayedanimportantroleuntiltheintroductionofnucleargenerationinthe1980s,reachingpeaksof30%,whilerenewablesbegantobecomemoreintenseatthebeginningofthe2000s.


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GRAPH20.DevelopmentoftheGermanpowermixsince1950(%)

Source:(Rutten,2014)

GRAPH21.DevelopmentofpowergenerationinGermanysince1950


Graph 22 shows developments in the German power mix in terms of installedcapacity.


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GRAPH22.Developmentofinstalledcapacity(MW)54

Source:BMWiin(Corrales,2015)

Attheendofthe1990s,windenergystartedtobecomemoreimportant,topping1,000MWin1995,10,000MWin2002and30,000MWin2012.Thefirstoffshorewindfarmswereinstalledin2009andby2015theywereproducing1,000MW.

Solarphotovoltaicenergycapacityreached1,000MWin2004andbetween2009and2012itwasgrowingatarateofmorethan7,000MWperyear.Nearly38,000MW was installed in 2014, exceeding wind energy power and making it thegenerationtechnology–conventionalorunconventional–withthelargestinstalledcapacityinGermany.

54ThecurrentsituationofcoalplantsandnewprojectsisexaminedinSection4.4Coal.


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GRAPH23.Developmentinannuallyinstalledrenewableenergycapacity(GW)


Inaddition,asthetablebelowshows, installedcapacityfromfossil fuelshasalsoincreasedsince1995,whileinstalledcapacityfromnuclearenergyhasfallen.

TABLE9.Developmentininstalledcapacity(GW)

1995 2000 2005 2010 2012 2013Fossilfuels 83.4 80.8 76.4 85.8 89.6 91.4

Nuclearenergy 22.8 22.4 20.4 20.5 12.1 12.1Hydroelectricenergy 8.9 9.5 10.9 11.2 11.3 11.2

Windenergy 1.1 6.1 18.4 27.2 31.3 34.7Solarphotovoltaicenergy ‐‐‐‐ 0.1 2.1 17.6 32.6 36.3

Other ‐‐‐‐ ‐‐‐‐ 0.6 0.4 0.4 0.4

Total 116.2 118.9 128.6 162.7 177.3 186.1


Thegraphprovidesamoredetailedpictureofthedevelopmentofpowergenerationsince1990.Coalandnuclearenergycontinuetoaccountforaconsiderableshare.Renewablesfirstbegantobeintroducedonalargescaleinthe2000s.In1990,theyaccountedforjust3.4%and6.2%in2000.By2005thefigurehadrisento10%,17%in2010and27.4%in2014(BMWi,2015a).

However,theseenergiesrepresented50%ofinstalledcapacity,asexplainedabove.Thisislogical,giventhatmostsolarsitesbarelyexceed1,300equivalenthours,sothat38GWofphotovoltaichadbarely920equivalenthoursoffulloperation(10.6%oftheloadfactor)in2014.Theratiosforwindenergywerelittlebetter‐1,500hoursforonshoreand1,900foroffshore,eventhoughthelatterwillnotbecompetitive


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untilitreaches3,000workinghours,duetothehighinstallationandrunningcosts(Corrales,2015).

Germany produced 548 TWh in 1990, of which 20 TWh (3.5%) came fromrenewables(mostlyhydropower).Thisfigurewasnotsurpasseduntil1996(553TWh), since the intermediate years were marked by German reunification andadaptationofEastGermanindustry.

GRAPH24.Developmentinpowergeneration(TWh)


Maximumproductionin2007reached641TWh.DuetotheglobalandEuropeaneconomiccrisisandimprovementsinefficiency,thisproductionlevelhasnotbeenmatchedsince.

Atthesametime,itisimportanttonotethatGermanyisstillconsumingcoal.OneofthereasonsforthisisthecompetitivenessofthecoalpriceandalsothelowpriceofCO2 emission rights. The price of CO2 emissions (EU allowances or EUAs) wasestimatedat€25pertonneandyetthepriceinSeptember201555was€7.87pertonne.56Thishasledtoariseincoalconsumptioncomparedtonaturalgas,whichdespiteexperiencingareductioninprice,isstilllesscompetitivethancoal.

Germany produced 99.71 TWh in 2010 from anthracite and 130.43 TWh fromlignite,risingto107.73TWhand140.43TWhrespectivelyin2014.

55(EEX,2015)56(StilwelldeAndrade,2015)


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TABLE10.Developmentofpowergeneration(TWh)

1995 2000 2005 2010 2012 2013Solidfuels 289.1 296.7 288.1 262.9 277.1 282.6

Oilandproducts 9 4.8 12 8.7 7.6 7.2Naturalgas 50.4 60 83.6 100.9 87.5 79.5

Nuclearenergy 153.1 169.6 163.1 140.6 99.5 97.3Renewableenergies 30.4 39.7 69.3 111.2 149.6 158.2Non‐renewablewastes 5.3 5.8 3.3 6.4 6.6 6.6

Total 537.3 576.5 622.6 633 629.8 633.2


Germanyhasseentheincorporationofnewenergysources,suchascoal,oil,gasandnuclearenergy.AsGraph24shows,powergenerationhasrisensignificantlyinthelastfewdecades.Inaddition,sincethe1990s,anincreaseindemandhasbeenmetbyanincreaseinrenewables.

Importsandexports

In 2012 Germany had one of the largest interconnection capacities in Europe,includinginterconnectionswithtencountries(AgoraEnergiewende,2012).

GRAPH25.Capacityforpowerimportandexportbycountry(GW)

Source:(AgoraEnergiewende,2015a)


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Asthegraphbelowshows,theHeinrichBöllFoundationthink‐tankhasfoundthatGermanycontinuestobeanetpowerexporter.57

GRAPH26.NetpowerexportsinGermanyfrom2000and2013(TWh)

Source:AgoraEnergiewendeandAGEBin(Morris&Pehnt,2012)

In2013,theGermanInstituteforAppliedEcologypublishedareport58onenergyflowsbetweenGermanyanditsneighbouringcountries.ThereportappearedatatimewhenPolandandtheCzechRepublicwerecomplainingaboutGermanuseoftheir grids to transmit its renewable power from the north to the south of thecountry.59

Switzerlandalsocomplainedabouttheinabilityofitsconventionalpowerplantstogeneratealltheirpotentialpowerduetousageof itsgridsbyGermanrenewableenergy.However,theNetherlands,whichwasinthesamesituationwithregardtoitsgasturbinesandGermanrenewableenergy,didnotregisteracomplaint.

Inthereport,researchersarguedthatifflowsarehigh,sotooareprices.Thus,dueto the design of themarket, even if power can be purchased fromneighbouringcountriesatlowerprices,theelectricityentersagridthatisoftencongestedandhasto be redistributed. This often happens with wind and photovoltaic energyproduction.Asaresult,marketpriceanddesignarethecausesoftheflowloopsandcomplaintsfromSwitzerland,PolandandtheCzechRepublic.

57Anegativevalueofnet importsofpowerenergy,calculatedaspowerusageminusproduction,indicatesthatthecountryisanetexporter.58(Loreck,Hermann,Matthes,Emele,&Rausch,2013)59 Indeed, theCzechnationalpowersystemoperator,CEPS,announced investmentofmore than€72mfortransformersatitsborderwithGermanyby2016,inordertoprotecttheCzechRepublicfromgridfailures.


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FIGURE15.EnergyflowsinGermanyin2014(TWh)

Source:(AgoraEnergiewende,2015b)

GermanyisalargeimporterofpowerfromtheCzechRepublicandanetexportertoPoland. The report found that Germany not only sends electricity fromnorth tosouththroughPolishandCzechgrids,butalsosendselectricitytoAustriathroughthesetwocountries.

OneoftheconclusionsofthestudywasthatGermanyimportsenergyduringthesummermonthsandexportsitduringthewintermonths,asthegraphbelowshows.

GRAPH27.MonthlyimportsandexportsinGermanybetween2003andSeptember2012(GWh)

Source:(Lorecketal.,2013)

ResearchersfoundthatdemandinFrancehadagreaterinfluenceonenergyflowthanGermanrequirements,due to the lowdegreeof flexibility innuclearplants.


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ThismeansthatattimesoflowdemandinbothFranceandGermany,twocountrieswithasimilarloadprofile,itisgenerallyFrancethatexportspowertoGermany.Theoption of reducing output in nuclear plants is not suitable for reactors. WhendemandrisesinFranceandGermany,itisGermanythatexportstoFrance.Germanyhasapowercapacitythatexceedsitsdemandpeak.60

AccordingtotheÖko‐Institut,GermanyhashigherphysicaltransmissioncapacitythanothercountriessuchasFrance(theformerhas52%ascomparedto40%inthecaseofthelatter);however,thisisnottranslatedintocommercialcapacity(32%fortheGermancaseand60%fortheFrenchcase).

France, three‐quarters of whose power supply comes from nuclear energy, is aflexible commercialpartner forGermany. Likewise, FranceusesGermangrids toexportpowertoSwitzerlandandItalyandonly2.4TWhofthe20TWhthatwasphysicallyimportedfromFrancetoGermanywassoldtoGermany.ThismayalsobeoneofthereasonswhytheGermangridiscongested.

Asweshallseeinthenextchapteronregionalcooperationandformerissues, in2015 Sigmar Gabriel took a step towards improving German and EU energysecurity.61 The Minister and eleven counterparts from European neighbourcountries signedapoliticaldeclaration toguaranteea secureand reliablepowersupplybetweenthecountries.Thisregionalcooperationprogrammeiscalled“12electricalneighbours”.

Underthisprogramme,energysecurityisseenasaEuropean,issue,ratherthananexclusivelydomesticproblem.Theintentionistofocusonasingleenergymarketinorder tooffer this security.This entailsneighbour states’ expressing trust in theothercountries,althoughharmonizingdifferentenergypoliciesisadifficulttask.

TheFederalMinistryforEconomicAffairsandEnergy(BMWi)underlinedthekeypoints of the declaration. Firstly, the neighbour countries have agreed to makesupply and demandmore flexible by using market signals and price peaks andavoiding theuseof legal limitsonprices.At thesame time, theneighbourstatescommittedtoreinforcingthegridsandnotrestrictingtheboundariesofelectricityinterchange,evenattimesofpowershortage.Additionally,neighbourstateswillpayspecialattentiontoassessingtheirdevelopmentasagroupandthereforebeingabletodevelopacommonperspective.

60Thewinterof2011‐2012isveryillustrative:anintensewaveofcoldsweptacrossEuropesparkingrecordenergy consumption inFrance (over100,000GW),partly explainedby theuseof electricheating.Atonespecificmoment,Francewasimportingbetween4and5GW,theequivalentoftheoutputofalmostfournuclearplants.Nonetheless,therewasnoenergyshortageinGermany,whichatthesametimecameclosetoitsownmaximumdemandlevels.

61(Kilisek,2015)


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This agreement is fundamental for Germany as it has to dealwith an importantexcess of generation capacity, a consequenceof an increase in renewablepowerproductionwhileitmaintainsconventionalgrid‐connectedpowerplants.

From the point of view of the German power market, this represents greaterEuropean integration. But this is even more true from the perspective of thecountry’ssupplysecurity,sinceGermanyisgoingtolosemajorbase‐loadcapacityduetonucleardisconnection.Giventhenatureofrenewableenergy,whichdependsonclimateconditions,theythereforealsoneedtosupportbaseloadcapacityintheCzechRepublicandFrance(bothnuclear‐based).

Germany’s objective is to avoid the need for a national capacitymarket throughEuropeanintegration.However,governmentsandpoliciescanchangeandGermanyis therefore assuming a great risk in outsourcing its future energy security. Thewisestoptionwouldthereforebetocombine integrationof theEuropeanenergymarketswithacapacityreserveinanationalcapacitymarket.

Companies:RWE,E.ON,EnBWandVattenfall62

In this section, we shall analyse the situation of the main power companies inGermany,aswellastheirsituationinthecountry’scurrentenergytransition,withdatafromAppunn,Ketal.63

ThefourmainpowercompaniesinGermanyareRWE,E.ON,EnBWandVattenfall.Thesecompaniesareinvolvedinenergyproduction,salesanddistribution.In2013,theyjointlyhelda67%shareoftheconventionalenergymarketinGermany.

Althoughtherearemanysmallerenergyprovidersonthemarketthatoftenofferlower consumption prices than RWE, E.ON, EnBW and Vattenfall, Germanconsumersdonottendtoswitchproviderandtheseutilitiesmaintainadominantmarketposition.

Now, however, as a consequence of theEnergiewende, they face very importantchallengesasGermanyembarksonanenergytransitionthatisfarremovedfromtheircorebusiness(energyproductionanddistributionfromfossilfuelsandnuclearenergy) and moves towards a low‐carbon economy based on generation fromrenewables, a sector in which they are falling behind. We shall make a briefreferencetothestrategiesofthesecompaniesinthistransition.

RWEwas the largest energy provider in the country with 6.6 million clients inGermanyin2013and24%ofmarketshareofsalestofinalclientsanddistributors.RWE operates nearly 330,000 kilometres of the power distribution grid. It also

62InthissectionwetrytoshowthemostrelevantissuesoftheEnergiewendeastheyaffectbusinessgroups.Thereadershouldbearinmindthatthisisnotadetailedstudyoftheissueandtherefore,referencestoagivencompanymaybetooneofitssubsidiariesorothercompaniesinthesamegroup–inastrictorlegalsense.63(Appunn&Russell,2015)


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operatesligniteminesintheRhineland(Hambach)with40‐45MT/year,Garzweilerwith35‐40Mt/yearandIndenwith22Mt/year.

In2013RWEproduced145.9TwhinGermany.AsGraph31shows,morethanhalfcame from coal (52% from lignite and 20% from hard coal). Nuclear energyaccounted for21%of this figure,but renewables representedonly1%ofRWE’spowergenerationinGermany.

In2013,E.ONsuppliedenergyto5.26millioncustomersinGermany.Thecompanyoperated352,000kilometresor19%ofthedistributiongridandproduced146.7TWhofelectricityinGermany.AsGraph28shows,itsgenerationisbasicallynuclear(53%),whilerenewableenergies,mainlyhydro,madeup8%.

BothRWEandE.ON(themaingenerationcompanies inGermany)havereportedimportantlosses–3.2billioneurosin2014inthecaseofE.ON,duetowrite‐downsinitsthermalplants,and2,800initscoalassets.Thestrategyofbothcompaniesisto switch to large‐scale renewables, distributed generation energy storage andmicrogrids.However,thetwocompanieshavesettheirsightsontheintroductionofwhatareknownas“capacitymarkets”inGermany,inordertouseconventionalgeneration as backup to offset the intermittence of renewables. However, theGermanGovernmentisunenthusiastic(Roca,2015).

Thesetwocompaniesarecurrentlyintheprocessofrestructuringtheirassets.RWEdivesteditselfofitsowncoalassetsin2014andpreservestwoofitsindependentsubsidiaries:RWESupply&Trading,whichisinchargeofpowermarketing(gas,coalandoil)inGermany,andRWEInnogy,whichisdevotedtorenewableenergyproduction(LaVanguardia,2015).


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GRAPH28.Energysourcesusedforpowergenerationbythecompaniesstudiedin2013(%)

Source:elaboratedfrom(Appunn&Russell,2015)

EnBWproduced58.55TWhin2013inGermany,ofwhich40%camefromnuclearplants,31%fromhardcoal,12%fromlignite,12.8%fromrenewableenergysources(hydroelectricenergy)and1.3%fromnaturalgas.

EnBWalsooperatesthetransmissionanddistributiongrid,with155,000kilometresthroughitssubsidiariesinBaden‐Wüttemberg,whereithas99%ofmarketshare.

Vattenfall, which is owned by the Swedish State, is the fourth‐largest energyproviderinGermanywith2.9millionclientsin2013and12,254employees.Itownsand operates the power grids of Hamburg and Berlin. Vattelfall is also the soleoperatoroffiveopenpitligniteminesintheGermanregionofLusatia(BrandenburgandSaxony),whichhadacombinedoutputof63.6Mtin2013.


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Vattenfallgenerated70.8TWhin2013.Asshowninthegraphabove,81%ofthatoutputcamefromlignite,8%fromhardcoal,5%fromoiland4%fromhydropower.

FollowingtheAtomausstiegin2011,thesepowercompanieshadtocloseseveraloftheirnuclearplantsandwillhavetoclosetherestbefore31December2022,64asshowninthetablebelow.

TABLE11.NuclearplantsownedbythemainpowercompaniesinGermany

Operator Reactorsandnet‐capacityinMW(2010‐2014) Dateofclosure

E.ON

Unterweser:1,345MWIsar/Ohu1:878MWIsar/Ohu2:1,410MWBrokdorf:1,410MWGrohnde:1,360MWGrafenrheinfeld:1,275MW

6August20116August201131December202231December202131December2021May2015

EnBW

Philipsburg1:890MWNeckarwestheim1:785MWPhilipsburg2:1,402MWNeckarwestheim2:1,310MW

6August20116August201131December201931December2022

RWE

BiblisB:1,240MWBiblisA:1,167MWEmsland:1,329MWGrundremmingenC:1,288MWGrundremmingenB:1,284MW

6August20116August201131December202231December202131December2017

VattenfallKrümmel:1,346MWBrunsnüttel:771MW

6August20116August2011


Dependingontheproportionofnuclearenergyinthegenerationmix,insomecasesthishasmeantamajorreductioninthecompany’sprofitsandseriousemploymentcuts.E.ONsuffereda€1.9mlossafterreporting€6.3minprofitsthepreviousyear.Power plant owners have reacted to the situation by taking legal proceedingsagainsttheGermanGovernment.Vattenfalldemandedfinancialcompensationfordamages, taking itscase to the InternationalCentre forSettlementof InvestmentDisputes(ICSID).For theirpart,E.ONandRWEbrought theirsuit to theGermanConstitutionalCourt. In thecaseofEnBW,proceedingswerebroughtagainst theGermanGovernmentandthestateofBaden‐WüttembergintheBonndistrictcourt.

Nuclearplantoperatorsarealsoobligedbylawtomeetthecostofdismantlingthenuclear plants and removingwaste, thus increasing the economic impact of theAtomausstiegonthosecompanies.

Following a stress test performed by the auditing firm Warth & Klein GrantThornton AG, which assessed the costs of decommissioning nuclear plants andremoving waste, Minister Sigmar Gabriel65 said that “companies will be able toaffordthecosts”.

64ThiswasthecaseofVattenfallin2011;thisiswhynuclearpowerisnotshowninthegraphabove.65(BMWi,2015c)


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Theexpertswhoconductedthetestanticipatedthatthetotalcostwouldcometo€38.3billionandthebudgetprovidedforthepurposewasestimatedatbetween€29 billion and€77 billion,while the companies have net assets of around€83billion.

Apart from waste removal, the country’s transition towards renewable energysources,drivenbytheRenewableEnergiesAct(ErneuerbareEnergienGesetz,EEG),hasalsodirectly influenced thebalancesheetsof the largeutilities.Asdiscussedabove,agreaterincreaseinrenewableshasbeenachievedandin2012E.ON’sCEO,JohannesTeyssen,saidinaninterview:“IamconvincedthatourmarketshareinGermanywillhave tobereduced. It isnotpossible tomaintain thesamemarketshare in a decentralized energy world”. E.ON’s power production fell by 38%between2010and2013.

Since 2010 the aggregatedmarket share of the four largest conventional powercompanies(RWE,E.ON,EnBWandVattenfall)hasfallensixpercentagepoints,theoverallmarketvolumeofconventionalenergyhasfallenby9%andthequantityofenergyproducedbythe“bigfour”hasfallen16%.

As the graph below shows, large German power companies have lost weight ininstalledcapacity.

GRAPH29.InstalledcapacityofthemainutilitiesinGermanybetween2010and2013(MW)


The progressive closure of nuclear plants and the effect on conventional fossilenergyassetsoftheEnergiewendehasaffectedthepriceofthesecompanies’stock,asthegraphbelowshows.


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GRAPH30.HistoricalsharepriceofRWE,E.ONandEnBWinthelastfiveyears(€)

RWE

E.ON

EnBW

Source:(GoogleFinance,2015)

In2013thetradeunionVerdiclaimedthatabout20,000jobsintheenergyindustrywereatrisk.Followingclosureof the firstnuclearplants,RWE,E.ON,EnBWandVattenfallannouncedjobcutsamountingtoover15,000employees.InNovember2014thefourlargestutilitieshad16,128feweremployeesinGermanythanin2010.


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ThelargestcutshavebeeninE.ON66(11,487jobs)withthesmallestimpactinEnBW(628jobs).

GRAPH31.EmployeenumbersatprincipalGermanpowercompanies

Source:(Appunn&Russell,2015)

On the other hand, as previously mentioned, following the closure of theGrafenrheinfeldplantinJune2015,E.ONsaidthatdespitetheprogressivenucleardisconnection, it sees opportunities in theEnergiewende. Indeed, on1December2014,E.ONannouncedthatfrom2016on,itwillbegindivestingitselfofitsfossilfuelandnuclearoperationstofocusonrenewableenergiesanddistribution,ataskwhichismadeharderbythecomplexityoftheconventionaldistributors.

In2013,EnBWtooannounceditsintentiontoincreaseitsshareofrenewableenergybynearly40%in2020toconcentrateonwindandhydroenergy.67

66E.ON lay‐offs inGermanybetween2011and2013weremainlyduetoclosureofoperations inMunichandsaleofsharesinothergenerationfacilitiessuchasThüringerEnergie,E.ONWestfalenWeserandE.ONWasteEnergy,aswellanewpolicycalledE.ON2.0,whichfocusedoncost‐cuttingandimprovedefficiencyinthecompanyasawhole.67Manymunicipally‐ownedpublicutilities(stadtwerke)hadregionalsupplymonopolies,amountingto22.6GW in2013with renewablesandcogeneration.Thesewereprivatizedduring the1990s.Someareownedbythefourmainutilities.However,followingintroductionofsubsidiesforgreenenergy,someutilitieshavebeenrenationalizedasmanycouncilsandcitizensdecidednottorenewtheir agreementswithprivate companies.Asa result, 72new stadtwerkewere foundedbetween2005and2013.Due to distributed generation in renewable energy and cogeneration, the stadtwerke have someadvantagesiftheyarecomparedtothestructuresthatbelongstoRWE,E.ON,EnBWandVattenfall.


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III.ENERGIEWENDE

5. OBJECTIVES.VIEWANDIMPLICATIONS

In this chapter we shall analyse the objectives and development of theEnergiewende.Weshallgoontofocusonthevisionfor2050andexaminethekeytopicsrecently(2014)identifiedbytheGermanMinistryforEconomicAffairsandEnergy.

5.1. Basicobjectives

ThebasictargetsoftheEnergiewende68 for2020and2030,asestablishedbytheGermanGovernment,aresetoutbelow.

Twobasic objectivesmightbe considered tobe contradictory: reduction inGHGemissions and dismantling of nuclear power.69 For the first of these, renewableenergyandenergyefficiencyarefundamentaltools.

GHGemissions

ThefirsttargetconsistsofreducingGHGemissions(comparedtoa1990baseline)by40%by2020,55%by2030,70%by2040and80‐95%by2050.

GRAPH32.GHGemissionsbysector(inmilliontonsofCO2equivalent)

Source:(Bayer,2015;Rutten,2014)

68 (VonHirschhausen, 2014)(FundaciónFocus‐Abengoa, 2015)(Galetovic&Muñoz, 2014)(CentroMarioMolina&EmbajadaRepúblicaFederaldeAlemaniaCiudaddeMéxico,2014)(Rutten,2014)69TheGermanGovernmentinitiallyprioritizedalltargetsequally.However,giventhelargenumberand the fact thatmanyare contradictory, following a proposal by theCommissionofExperts onEnergy(Löschel,2016)theEnergiewendewaslimitedtothesetwoobjectives.


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The figure above shows trends and targets from 1990 to 2013, when a 25.5%reductionwasachieved.Someauthors(Bayer,2015;Rutten,2014)believedatargetof40%couldnotbeachieved,but33%wasviable.

Approximately146milliontonnes(Mt)ofCO2equivalentwasoffsetbyrenewableenergyinGermanyin2012,ofwhich101Mtcamefromtheenergysector.Thus,CO2emissionsinGermanywerereducedincomparisontoformeryears,althoughthefigureissimilarto2009emissions.Thisappearstoindicatearelativelevelling‐offinCO2emissions70(Fortaleza,2015).

Energyefficiency

The target is for annual improvements of 2.1% in energy intensity. Ambitioustargets have also been set for improved energy efficiency: to reduce energyconsumptioninbuildingsfromthe2008baselineby20%by2020and80%by2050;toreduceprimaryenergyconsumptionby20%by2020andby50%by2050;toreducepowerconsumptionby10%by2020andby25%by2050,andtoreduceheatingenergydemandby20%by2020.

Oneofthemainelementsonwhichtheenergytransitionfocusesisanimprovementinenergyefficiencyinbuildings.Thistrendisshowninthegraphbelow,inkWh/m2‐year,with the figures for low‐consumptionhomes,demonstrating thehuge long‐termpotentialinthissegment.

GRAPH33.Energydemandinbuildings(kWh/m2‐year)

Source:IFEU(2011)in(Morris&Pehnt,2012)

70 Indeed, Germany occupies one of the leading positions in the Climate Protection Index 2014(Germanwatch, 2013), alongside Sweden and the UK. For many years, Germany has combinedclimateandenvironmentalprotectionintheinterestofasustainableeconomy.Thekeyofthismodelcomesfromanincreaseinenergyefficiencyandanextensionofrenewableenergyandrenewablerawmaterials(RRM).


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It is important to consider the development of energy efficiency throughout theentirecountry.Thetablebelowgivestrendsinenergyintensity71(EI)inGermanyoverrecentyears,showingacleardownwardtrend.

TABLE12.EIdevelopmentinGermany,1995‐2013(toe/€m)

1995 2000 2005 2010 2012 2013

159 145 141 129 119 121

Note:forthepurposesofmeasuringEI,€maregivenat2010rates.


Indeed, an efficiency study72 conducted in 2014 by the American Council for anEnergy‐Efficient Economy (ACEEE) scored Germany highest among the 16maineconomies analysed, because of its regulations for residential and commercialbuildings.Inthesameranking,Italycame2nd,theEuropeanUnion3rd,China4th,Spain8thandtheUnitedStates13th.

ThefigurebelowshowstrendsinenergyconsumptioninGermanyandtheforecastforthefuturetowardsthe2020target.

GRAPH34.EnergyconsumptioninGermany(PJ73)


However, efficiency trends are not as favourable as theyneed tobe tomeet thetargets,accordingtoRutten(2014),andarenotoncoursetoreachingthem.

71 The usual means of measuring energy efficiency in macroeconomic terms is through energyintensity(EI).Thisindicatorshowstherelationshipbetweenenergyconsumptionandthevolumeofeconomicactivityandiscalculatedasaquotientbetweenacountry’sprimary/finalenergyandgrossdomesticproduct(GDP).Thus,highenergyintensityindicatesahighcostfortransformingenergyconsumption into a given increase in GDP. Likewise, low energy intensity indicates that a largeamountofwealthisobtained(GDPincrease)withalowrateofeffort(Ortiz&Alvarez,2015).72(ACEEE,2014)731PJ=0.0238846Mtoe


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Renewableenergies

As for the percentage of renewables, increases are targeted in both powergeneration(byaminimumof35%by2020,50%by2030,65%by2040and80%by2050)and in finalenergyconsumption(18%by2010,30%by2030,45%by2040andabout60%by2050).Seegraphbelow.

GRAPH35.ShareofrenewableenergyinGermanpowerandenergymixwithEnergiewendetargets(%)


Thisistheonlytargetwheregoodprogressisbeingmadebothinfinalenergyandpower.TheFiTsandthecosttheyentailarenotunrelatedtothistrend,asweshallsee.

Nuclearenergy

Anotherimportantfactoristheprogressiveeliminationofnuclearpower,discussedinChapter3.

Following the announcement of the nuclear disconnection plan scheduled to becompletedby2022andaftercompletionofthefirstphase,withtheclosureofeightreactors in2011, thenextnuclearplant in theplan–Grafenheinfeld–was closeddowninJune2015(McKeating,2015).Closureoftheremainingeightisscheduledforbetween2015and2022(seegraphbelow).

Among theplants still operating, the oldest isGundedemmingenB,whichbeganoperatinginApril1984.Itwasfollowedin1985byGundremmingenC,bothusingboiling water reactors (BWRs). The other plants have pressure water reactors(PWRs).Theplantwith fewestyears in service isNeckarwestheim2,whichwascommissionedinApril1989;allplantsstillinoperationwerethereforebuiltinthe1980s.


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GRAPH36.Scheduledreductioninnuclearenergycapacity

-

Source:(Morris&Pehnt,2012)

Theseclosureswillinvolveimportantcostsinreplacementbyrenewablesandcoalplants,estimatedataround€1,000billion(WorldNuclearAssociation,2016).

Thetablebelowshowsthecurrentsituationofthenuclearplants,withtheclosuredates initially established and those agreed in2010, and the results of the2011decisions.

TABLE13.NuclearplantsaffectedbytheEnergiewende

Plant Type MWe(net)

Commercialoperation

Operator

Provisionalprogrammedshutdownof

2001

Agreedshutdownof

2010

Closureplanof2011

BiblisA PWR 1167 2/1975 RWE 2008 2016Shutdown

Neckarwestheim1 PWR 785 12/1976 EnBW 2009 2017Shutdown

Brunsbüttel BWR 771 2/1977 Vattenfall 2009 2018Shutdown

BiblisB PWR 1240 1/1977 RWE 2011 2018Shutdown

Isar1 BWR 878 3/1979 E.ON 2011 2019 Shutdown

Unterweser PWR 1345 9/1979 E.ON 2012 2020 Shutdown

Phillipsburg1 BWR 890 3/1980 EnBW 2012 2026 Shutdown

Krümmel BWR 1260 3/1984 Vattenfall 2016 2030 Shutdown

Totalshutdown(9) 9611

GundremmingenB BWR 1284 4/1984 RWE 2016 2030 Endof2017

GundremmingenC BWR 1288 1/1985 RWE 2016 2030 2021Grohnde PWR 1360 2/1985 E.ON 2017 2031 2021

Phillipsburg2 PWR 1392 4/1985 EnBW 2018 2032 2019Brokdorf PWR 1370 12/1986 E.ON 2019 2033 2021Isar2 PWR 1400 4/1988 E.ON 2020 2034 2022

Emsland PWR 1329 6/1988 RWE 2021 2035 2022Neckarwestheim2 PWR 1305 4/1989 EnBW 2022 2036 2022Totalinoperation

(8) 10728

Total(17) 20339

Source:(NSA,2016)


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Summaryofobjectives

TheGermanGovernmentdevelopedamethodformonitoringprogressinmeetingthe targets set, based on a series of annualmonitoring reports and prospectivereportstobepublishedeverythreeyears.Followingpublicationbythegovernment,these reports are evaluated from a scientific perspective by an independentcommission of energy experts, whose opinion is published each year (Löschel,2016).

Thetablebelowshowsthetargetsforgreenhousegases(GHG),renewableenergyefficiency andnuclearplants, partlypublished in theFourth “EnergyTransition”MonitoringReportof2015(BMWi,2015f).

TABLE14.SummaryofthemainEnergiewendetargets

SectorBasisyear

2014 2020 2030 2040 2050

Greenhousegases(GHG) 1990 ‐27% ‐40% ‐55% ‐20%[‐80%,‐95%]

Renewables

Powergeneration‐

27.4% 35% 50% 65% 80%Finalenergy 13.5% 18% 30% 45% 60%Heating ‐ 12% 14% ‐Transport ‐ 5.6% ‐

Efficiency

Primaryenergy

2008

‐8.7% ‐20% ‐ ‐50%Power ‐4.6% ‐10% ‐ ‐25%

Primaryenergyinbuildings ‐14.8% ‐ ‐80%Heatinginbuildings ‐12.4% ‐20% ‐

Finalenergyproductivity2008‐2050

1.6%/year 2.1%/year

Finalenergyintransport 2005 1.7% ‐10% ‐ ‐40%

Nuclear 200012,761MW

8,514MW

0MW

‐

NB:Negativeefficiencytargetfiguresindicatetheneedtoreduceconsumption,i.e.toimproveefficiency.

Source:Ownelaborationbasedon(Paulos,2013)(Morris&Pehnt,2012)(Rutten,2015)(BMWi,2015f)

Followingestablishmentofthesetargets,theEnergiewendeisnowpursuingwhatiscalledthe“TriangleofEnergyPolicy”.Thismightalsobetermeda“Rectangle”,sinceas well as three political objectives (environmental protection, affordability andsupplysecurity), italsotakesintoconsiderationtheadditionalobjectiveofsocialacceptance.

5.2. Avisionforthefuture.Horizon2050

WeshallnowexamineingreaterdetailGermany’sfutureenergystructure,basedontheobjectivesofthecountry’senergytransition.74

74TheProjectEnergiesystemderZukunft (EnergySystemsof theFuture) is an initiativeorientedtowardsprovidingspecificanswersontheenergysystemfor2050. Ithasbeendevelopedbythethree German Academies (the National Academy of Science and Engineering [ACATECH], theLeopoldinaNationalAcademyofSciencesandtheUnionoftheGermanAcademiesofSciencesandHumanities).Theprojecthasconcludedthatnotechnologylacksanalternative,meaningthatthereisalwaysapossiblesubstitutionatareasonablecost,providedtherightpathisestablishedandthewronglocationsavoided(ACATECH,2016).


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Thegraphsbelowshowthosepossiblefuturescenariosforfinalenergy, installedcapacityforconventionalenergyandpowergenerationbasedontheobjectivesoftheenergytransition.

Intheareaoffinalenergy,thevisionisforasystematicandcontinuousfallinenergydemand.Theeconomichypothesisforgrowthis‐56%.Thereisastronggrowthinpenetrationofgeothermalandbiomass,aswellaswindandhydropowerinfinalusage,withahypothesisof+500%.Powerdemandisduetostopgrowingorfall.

Theseobjectivescanbeachievedwithgreaterorlessersuccessdependingontheprogress in energy efficiency and the reduction in energy consumption.Consequently,variousmoreorlessoptimisticscenarioshavebeenestablished,asshowninthegraphbelow.

Startingfromthereferencescenario,establishedbytheGermangovernmentandconsisting of a continuation of the current situation, various possibilities aredeveloped,ofwhichthemostpessimisticisthebusiness‐as‐usual(BAU)scenario,whichreflectsthereferencesituationwithnoprogressinefficiencyandanincreasein energy consumption. The “EfficiencyPlus” scenario allows for introduction ofimprovementsundertheEuropeanEfficiencyDirective,whilstthe“EnergyConcept”scenarioinvolvesmeetingGermangovernmenttargets.Finally,the“WWF”scenarioisbasedonthetargetssetbytheWorldWildlifeFund(PrognosAG&AIEW,2014).


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GRAPH37.SupplyanddemandscenariooffinalenergyinGermany(PJ75/year)and(below)forecastdevelopmentofelectricityconsumptionin

Germanyindifferentefficiencyscenarios(TWh)

Source:DLRLeadStudyin(Morris&Pehnt,2012)and(PrognosAG&IAEW,2014)

Asforpowergeneration,thefollowinggraphsshowinstalledcapacityindifferentyearsbetween2000and2050andtrendsinproductionbytechnologyforthesameyears.

GRAPH38.Conventionalenergy.InstalledcapacityscenarioinGermany(GW)

Source:FraunhoferIWESin(Morris&Pehnt,2012)

751PJ=0.0238846Mtoe


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Wecanseethemixofrenewables,gas(40%)andcoal(10%)ininstalledcapacity.Amongstrenewables,windenergywilldominateinpowerproduction.

GRAPH39.PowergenerationscenarioinGermany(TWh/year)

Source:DLRyFraunhoferIWESin(Morris&Pehnt,2012)

It is interesting to see the final result in primary energy to the 2020 and 2050horizons,asshowninthegraphbelow.

GRAPH40.AnticipateddevelopmentofprimaryenergystructureinGermanyfrom1950to2050(foroneunitofprimaryenergy)

Source: Own elaboration from (BMWi, 2015a),(Morris & Pehnt, 2012),(Statistischer Bericht derZentrallastverteilungfürElektrizitätimBMWi,1999),(Schröder‐Burgdorf,2015)and(Steblauetal.,2014)

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

1

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

NUCLEAR

RENOVABLES

GAS

HULLA

LIGNITO

PETRÓLEO


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Thetablebelowshowsthepercentagesofeachsourcebyyear.Thecolumnfor2025deservesspecialattention,asitisthehalf‐waypointtowardsthe2050horizon;oilandnaturalgasrepresenthalfofprimaryenergy,whilstrenewableenergiesaccountfor25%andcoalalmost25%.

TABLE15.Anticipateddevelopmentofprimaryenergystructure(%)

1950 1975 2000 2025 2050Lignite 18.2 21.7 10.8 ‐ ‐

Oilandproducts ‐ 1.6 38.2 25.0 10.0Naturalgas ‐ 10.5 20.7 27.5 25.0

Nuclearenergy ‐ 44.2 12.9 ‐ ‐Renewableenergies 26.2 2.1 2.9 25.0 60.5

Hardcoal 54.7 18.2 14.0 22.5 5

Source:Ownelaboration

5.3. KeypointsfortheEnergiewende

ThissectionssetsoutkeypointsoftheEnergiewende,givingtheobjectives,visionandimplications.

TheGermanFederalMinistryforEconomicAffairsandEnergy(BMWi)recently(in2014) drew up an “energy agenda” identifying ten key legal questions76 for thesuccessoftheEnergiewende.

This section addresses aspects related to theEnergiewende and enlarges on the“mostspecific” issuesmentionedabove.Weshallanalysethe issuesorproblems,partlylinkedorrelatedtothebasicobjectivesthatarise.

Renewableenergies

Aprogramme for reviewof the law in2016which could lead toa change in thefinancing of renewable energies (all technologies) –established up to now byauction– based on the experience obtained following the January 2015 lawregulatingsubsidiesforphotovoltaicinstallations.

2030EuropeanClimateandEnergyFrameworkandETSReform

Application before 2020 (starting in 2017) of the measures established by theEuropean Council in October 2014 within the European Climate and EnergyFramework,andthereformoftheemissionstradingsystem(ETS). Inaddition, itwillbenecessarytoimplementaglobalraftofdirectivesforapost‐2020ETS.

Powermarket

Thepowermarketmustbedesignedto:ensureefficientimplementationofpowerplants based on a growing increase in renewable energies, maintaining energysecurityandmeetingthenationalclimatetargetfor2020,withtheinvolvementofallsectors.Additionallyitisimportantthatfinancingforcogenerationorcombinedheatandpower(CHP)fitswithinthefuturedesignofthepowermarket.

76(BMWi,2014a)


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TherehavebeenseveraldebatesontheGermanPowerMarketPlatformandagreenpaperhasbeensubmittedofferingvariousoptions,withtheirrespectiveadvantagesanddisadvantages.Therehasalsobeenaprocessofpublicconsultationfollowedbytheissuingofawhitepapersettingoutspecificmeasures.

RegionalcooperationintheEUandinternalmarket

ThecooperationbeingbuiltatthePentalateralEnergyForum77isfundamental,asGermany has initiated talks with its neighbouring countries to enforce energysecurityandcoordinatedesignoftheenergymarket.

Europeanpowergridsmustbemoreintegratedwithinterconnectedmarkets.Thiswould make the power systemmore efficient and reduce the need to maintaingenerationcapacity,asitwouldallowenergysecuritytobeachievedatareducedcost.Thiswouldfacilitatetheintegrationofrenewableenergies.Consequently,theGerman government is seeking to intensify cooperationwith its neighbours andwiththeEUasawhole.78

Transmissiongrids

Expansion and extension of transmission grids is essential for the energytransition79. The Grid Development Plan for 2025, which is based on the GridDevelopmentPlan2015,willcomparetheneedtoenlargetransmissiongrids,notonlywiththeextensioncorridorsestablishedbythe2014RenewableEnergiesAct,butalsobyusingvariousscenarios toshowtheGermangovernment’sambitioustargets formitigatingclimatechange.ThisplanwillbeauthorizedbytheFederalGridAgencyandpresentedtogovernmentinmid‐2016.

Distributiongrids

Distributiongridsmustalsobeintroducedtosatisfyenergytransition,sincealargepartofpowergenerationwillbebasedondecentralizedrenewableenergysources.

AprojectforreviewoftheOrdinanceforRegulationbyIncentiveswillbepresentedtogetherwitharaftofordinancesonsmartgrids,anordinanceongridsystemfeesandareviewoftheprocessforawardinglicenses,relevantfordistributiongrids,whichwillcomeintoforceatthebeginningof2016.

EfficiencyStrategy

ImprovedenergyefficiencyishighlyimportanttotheEnergiewende.Consequently,both theNationalEnergyEfficiencyActionPlan (NAPEorNationalerAktionsplanEnergieeffizienz) of 2014and fulfilment of its basic requirements are considered

77ThePentalateralEnergyForumistheframeworkinwhichcooperationwithinCentralandWesternEurope is developed. The Forum was created in 2005 by the energy ministers of the Beneluxcountries,Austria,GermanyandFrance(Switzerlandwasapermanentobserver)withthepurposeofdrivingcollaborationincross‐borderpowerinterchanges(EuropeDirectSalamanca,2015).78 Forexample, the2014RenewableEnergiesActhascreated thepossibilityof financing foreignpowerthroughauctions.Specificdetailsarestipulatedwithrulesandthereisclosecoordinationwithinterestedpartnercountries.79ThiscanbeseenintheearliersectionsofthisBlockIII,Energiewende.


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essential. Various measures have already come into force and others are to beimplementedsoon.

Buildings

Inthelongterm,thereisaparticularneedtorenovateexistingbuildings,anaspectcovered in NAPE and of vital importance for achieving climate‐neutral urbanplanning80by2050.Thegeneralstrategyfortheconstructionsectoristhereforetoaddressaspectsofpower,heatandefficiency, aswell as including thenecessarymeasurestoattainthesegoals.Thiswillbeachievedthroughamajordevelopmentin the Law on Heat Generation using Renewable Energy and the Ordinance onEnergySaving.

Gassupplystrategy

NaturalgasrepresentsapproximatelyaquarterofprimaryenergyconsumptioninGermany(asGraph6shows,approximately20%ofprimaryenergyandnearly20%of final energy). Therefore, a secure and affordable gas supply for industry andhousingiscrucial.

Attention will focus on the creation of the internal energy market, includingimprovements to interconnections between EU member states and access toliquefied natural gas (LNG) terminals, for example, through European common‐interestprojects.Therewillalsobesupportforcommercialprojectswhosepurposeistodiversifysupplycountriesandroutes.

Energytransitionmonitoring/platforms

The process of monitoring the energy transition has three essential objectives:generalinformation,assessmentandperspectives.Anannualreportdescribesandevaluatesthestateofimplementationoftheenergytransition.

It isalso importanttoconsidertheroleofsocietyinthedraftingofpolicies.Thisdialogue has already been established. Indeed, the German Federal Ministry forEconomy Affairs and Energy (BMWi) has created five platforms for the energytransition: power market, efficiency, power grids, buildings, and research andinnovation.

Atthesametime,theGermanFederalMinistryforEducationandResearch(BMBF)has initiated another platform for dialogue called the ForschungsforumEnergiewende (Forum for Research for the Energiewende) which includesstakeholders from the energy industry and representatives from political andacademicinstitutions,industryandcivilsociety.

Althoughthesummarythatfollowsdoesnotseektoaddressalltheenergy‐relatedissues,wefeelitmaybehelpfultoexaminevariousaspectsofGermanenergypolicy

80 Climate neutrality involves returning to pre‐Industrial Revolution levels of contaminatingemissions.ThetimescaleestablishedforachievingthisgoalbytheSecretaryoftheUnitedNationsFrameworkConventiononClimateChange(UNFCCC),ChristianaFigueres,isthesecondhalfofthe21stCentury(LIMACOP20&CMP10,2014).


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in the table below. For each topic we list aspects such as motivation forconsideration,statedobjectivesinthisarea,mainpointsofactionandregulation,itsplace in the key aspects for theBMWi, trends in achievement of the targets anddifficultiesthathavearisen.


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TABLE16.MainelementsofGermanenergypolicy

Points Motivations Objectives ActionlinesandregulationKeypoints(BMWi)

Development Difficulties

EmissionsCO2

eq.

Tostopclimatechangeandglobalwarming.

ToreduceGHGemissionsinrelationto1990.

‐1994State’sobjectiveintheFundamentalLaw.‐1999“Eco‐tax”.‐2000RenewableEnergySourcesAct(EEG)(amendedin2004,2009,2012and2014)‐2005EnvironmentalistDirective.‐2010SpecialFundforEnergyandClimate.

‐MeasuresbytheEuropeanCouncilinOctober2014intheEuropeanClimateFramework.‐DirectivesfortheETSpost2020.

‐GHGreductions.‐AgreementinCOP21.

‐Costs‐Powersystemstability‐Crisisinthepowerindustry

Energyefficiency

Tostopclimatechange,globalwarmingandenergyimports.

Consumptionreductionsinrelationto2008.

‐2014NationalActionPlanforEnergyEfficiency(NAPE).‐2002EnergieeffizienzinitiativeandEnergySavingOrdinance,Energieeinsparverordnung(EnEV).

‐NationalActionPlanforEnergyEfficiency(NAPE)of2014.‐LawofHeat,RenewableEnergiesandtheEnergySavingOrdinance.

Improvementinenergyintensity(IE).

Measuresarenoteffectivelyapplied.

Renewableenergies

Tostopclimatechange,globalwarmingandenergyimports.

Toincreasethepercentageofrenewableenergies.

‐1990LawofNon‐ConventionalRenewableEnergies(NCRE).‐1991Stromeinspeisungsgesetz(StrEG).‐2000LawonRenewableEnergies(EEG)(amendedin2004,2009,2012and2014).

RevisionoftheLawforRenewableEnergies(EEG).

‐Reducedpremiums.‐Increaseincapacityandconsumptionofrenewables.

Energystoragesystemsarerequired.

Nuclearenergy

Toeliminaterisksandprotests.

Progressiveeliminationofnuclearenergy.

‐2011Atomausstieg. Thedisconnectioncontinues.Difficultyincalculatingwhenasecurelong‐termwastestoragesitewillbefound

Creationofindustryandemployment(cooperationanddistributedgeneration)

‐Economicrewardforcommunities.‐Jobcreation.‐Controlofenergypoverty.‐Promotionofecologicalinnovationsandexports.

DistributedgenerationpromotedthroughtheRenewableEnergySourcesAct(EEG)andfeed‐intariffs(FiT).

Therehavebeenreversesinjobcreation.


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Points Motivations Objectives ActionlinesandregulationKeypoints(BMWi)

Development Difficulties

Energysecurity

Lessdependencyonothercountries.

‐PentalateralEnergyForum.‐RenewableEnergySourcesAct(EEG).‐CreationofaninternalenergymarketwithconnectionsinEurope.

Powergrids Tobuildandoptimizegrids.

‐2011Netzausbaubeschleunigungsgesetz(NABEG).

‐Ordinancesondistributiongrids.‐PlanofGridDevelopmentfor2025.

Popularopposition.

Transport

‐2009NationalPlanforEletromobilityDevelopment.‐2011Regulationonlabellingforelectricvehicles.

‐Thetargetofonemillionelectricvehiclesby2020seemsunlikelytobemet.‐LimitedcontributionfromthesectorinreducingGHGemissions.

Powermarket

ThecurrentGermanGovernmentwantstochangeenergypolicy,mainlyinordertoavoidagreaterincreaseinthecostofelectricity.

‐Toassureefficientimplementationofpowerplants.‐Tomatchfinancingforcogenerationorcombinedheatandpower(CHP)generationwithdesignofthepowermarket.

‐Forthemoment,sustainablelong‐termdesignhasnotbeenfound.

Gasmarket

Asecureandaffordablegassupplyiscrucialforindustryandfamilies:attentionwillfocusonthecreationoftheinternalenergymarket,includinganimprovedphysicalconnectionwithEurope.

Powerpricesleavelittlemarginforgasandcoalplants.


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5.4. Thecostofrenewables

SupportersoftheEnergiewende,suchasVonHirschhausen(2014),believethatthehighcostofrenewableswillfallinthefuture.

These forecasts are shown in thegraphsbelow.The firstdepicts the anticipatedtrend in the costof investing in renewables (€/kW)while the secondshows thesametrendin€/MWh.Itshouldbenotedthatthehypothesisedpriceoffossilfuels,andthusthepriceperkWh,growscontinuously,whichmaynothappeninthiscase.

Thedynamicanalysis81suggeststhatrenewableshaveaconsiderablecomparativeadvantagewhencost reductionskick in.Thismeans that thanks to technologicalinnovationandeconomiesofproduction,generationcostshavefallensignificantlyfor PV solar and wind energy (as already mentioned) and there are greatexpectationsforthetrendto2050.

Indeed,mostofthereductionincoststodatehasoccurredinPVsolarenergy,withthelearningrate82increasingby15‐20%,leadingtoanexpectedreductionof15‐20%inthecostonceinstalledcapacityisdoubled.Asforonshorewindenergy,thelearningratevariesbetween5and15%andareductionincostisanticipated,basedonexperimentsondifferenttypesofturbine.

Nonetheless,eventakingthetrendshowninthegraphbelow,anasymptotictrendcanbeseen,withtheresultthatthegreatestdecreasesdonotseemtoofferthesameproportionofcontinuity.

Thus,accordingtotheBWS(theGermanmonitorforphotovoltaicprices)thecosts83inthephotovoltaicsolarenergymarketin2012were€3.62perWp84forsystemsinstalledwithlessthan100kWp.Asforcomponents,theaveragepriceforthinsheetmoduleswasunder€2/Wp,while thepriceof crystalline siliconmodulesvariedbetween€2.30and€2.50perWp.

81(VonHirschhausen,2014)82Thelearningratereferstotechnologicallearning,whichisthereductionincostsastechnologymanufacturers accumulate more experience. Most learning rates are based on non‐energytechnology studies or isolated results from a small number of energy studies (McDonald &Schrattenholzer,2011).83(BSWSolar,2013)(GorozarriJiménez,2012)84 The peak power of a photovoltaic element, measured in peak watts (Wp), is defined as themaximum electric power it can generate under the following standard measuring conditions:irradiance: 1000W/m², temperature: 25 °C,AM:1.5,whereAMorAirMass is ameasureof thedistancethattheradiationtraverseswhenitpassesthroughtheatmosphere.AMvariesaccordingtotheangleof incidence,accordingtothefollowingformula:AM=1/cos(Ɵ),whereθ is theangleofincidenceofarayoflightintheverticalofthesite.


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GRAPH41.Expectedcostforenergygeneration(€/kWh)

Source:FraunhoferISEin(Morris&Pehnt,2012)

ThegraphbelowshowsGermandailymarketpricesbyenergysourcesinthefirsthalfof2015,withthedifferenceinpriceperMWhbetweenlignite(€31.6)andhardcoal (€35.3) on theonehandandwind (€25.6) andphotovoltaic (€28.6) on theother.

GRAPH42.Dailymarketpriceforthedifferentenergysourcesinthefirsthalfof2015(€/MWh)

Source:elaboratedfrom(FraunhoferISE,2015b)

AccordingtotheGermanEnergyAgency,85generationcostsforphotovoltaicenergyinGermanyin2013stoodatbetween8and14cents/kWh,meaningthattheywerebelowthecostsfor2012(between11and17cents/kWh)(DENA,2015).Inthecaseofwindenergy,generationcostsvarybytechnologyandin2015theyrangedfrom4.5 to 10.7 cents/kWh for onshorewind, between 11.9 and 19.4 cents/kWh for

85(DENA,2015)


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offshorewind and from15 to 20 cents/kWh for smallwind turbines for privateuse.86Thesenumbersaresimilartothoseshowninthefollowingtable.

TABLE16.CostsofpowergenerationinGermany

SourceCents€/KWh

Equivalentfull‐loadhoursperyear

Capacityfactor(%)

Photovoltaic 7.8‐14.2 1,000‐1,200 11‐14Onshorewind 4.5‐10.7 1,300‐2,700 15‐31Offshorewind 11.9‐19.4 2,800‐4,000 32‐46

Biogas 13.5‐21.5 6,000‐8,000 68‐91Lignite 3.8‐5.3 6,600‐7,600 75‐87

Blackcoal 6.3‐8.0 5,500‐6,500 63‐74Naturalgascombined

cycles7.5‐9.8 3,000‐4,000 34‐46

Retailprocessforhomes 28.9 ‐ ‐

Source:FraunhoferInstitutein(WorldNuclearAssociation,2016,2016)

One aspect of the different amendments to German legislation for promotingrenewableenergieshasbeen the inclusionofadministrativechanges to facilitateinvestmentinrenewables.Thishasmeantthatcostsassociatedwithadministrativeprocessing,locationstudies,environmentalimpactstudies,theobtentionofpermitsandtaxesandfees,etc.,fellconsiderably,mainlyforsmallinstallations.

Anexample,ofthiscompetitiveadvantageinGermanyintermsofcostsisshowninthefigurebelow,showingtherelativecostsfora4kWphotovoltaicsolarinstallationintheUSandGermany.

GRAPH43.Comparisonofcostsfora4kWsolarinstallationinGermanyandtheUSbasedon2013data($)

Source:ILSRin(Corrales,2015)

86 The TSO has estimated average payments through the EEG to renewables for 2016 of 30.613cents/kWh for photovoltaics, 24.389 cents/kWh for geothermal, 18.657 cents/kWh for biomass,18.362cents/kWhforoffshorewind,9.156cents/kWhforonshorewindand9.402cents/kWhforhydro(NETZ‐TRANSPARENZ.DE,2015).


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Whilstthepriceforpanelsissimilarinthetwocountries(about$1,000/kW),othercosts, mainly those associated with bureaucracy and regulation, are very muchlowerinGermany.87TheendresultisthatinGermanya4kWsolarinstallationcancost about $9,000, whereas in the United States the total cost can run to about$20,000.

87AccordingtothelatestdataavailablefromtheFraunhoferInstituteatthetimeofwriting,inthefirst quarter of 2015 the price of a photovoltaic installation was €1,300/kWh, with the panelaccountingfor48%ofthetotalcost(€624($712)perkWh).Thisproportionbetweenthepanelandtherestoftheinstallationhasremainedat50%inrecentyears(FraunhoferISE,2016).


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6. RELEVANTBASICREGULATION

As well as the political context, it is also very important to examine the legalframework of the German energy sector in relation to the Energiewende. ThischapterwilladdressessentialrelevantlegislationandtheFiTs.

6.1. Chronologyofthemainregulatorymeasures

InordertounderstandtheevolutionoftheEnergiewende,itisessentialtoknowthelegal“legacy”andthemeasuresonwhichitisbased.

Thefigurebelowidentifies88themainregulatoryaspectsthathaveenabledprogressintheenergytransition.

FIGURE16.TimelineofthemainmeasuresforpromotingtheEnergiewende

2014

AmendmenttotheRenewableEnergiesAct(EEG)

2012 Cogenerationagreementswithindustry

Amendment totheRenewableEnergiesAct(EEG)

2011

FinancingbyKfWbankforthefirstoffshorewindfarm

Monitoringprocessfor“TheEnergyoftheFuture” Environment,ClimateandRenewableEnergiesAct

SixthEnergyResearchProgramme

Programmeforprogressivenuclearclosure(Atomausstieg)

2010 NationalPlanforEnergyAction

EnergyConceptPlan Lawonbiofuelfees

2009

AmendmenttotheRenewableEnergiesAct(EEG)

FinancingbyKfWbankforrenewableenergiesprogramme

andenergyefficiencyandrefurbishingprogramme(EnergieeffizientSanieren)

RenewableEnergyforHeatingAct

NationalElectricTransportDevelopmentPlan

2008

Raftoflawsforclimatechangeandenergyprogramme

2007

Climatechangeandenergyprogramme

2006

Klimazwei researchprogramme(ResearchonClimate

ProtectionandCombattingClimateImpacts) Foundationofthesolarenergydevelopmentcentre


88ForfurtherinformationonthedevelopmentofthelegalframeworkfortheenergytransitioninGermany,seeAppendix13.4.


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FIGURE17.TimelineofthemainmeasuresforpromotionoftheEnergiewende(2ndpart)

2005

EnergyinIndustryAct(Energiewirtschaftsgesetz)

FinancingbyKfWbankforthesolarenergyproduction

programme FifthEnergyResearchProgramme

2004

Amendment totheRenewableEnergiesAct(EEG)

Solarthermie2000PlusProgramme

2002 CombinedHeatandPowerAct

ModificationofEEGtariffsforrenewableinstallation

2001

Investmentin“Future”programme

2000 Extralawforheatingandelectricity

RenewableEnergiesAct(EEG)

1999

Preferentialloanprogrammesofferedbyreconstructionloancorporation(KfWbank)

Eco‐Taxreform Marketincentivesprogramme “100,000SolarRoofs”programme89

1998

BalticEnergyEfficiencygroup

1997

Federalconstructioncodesforrenewableenergy

production

1996 FourthEnergyResearchProgramme

“GreenEnergy”programme

1995 “100million”programme

Ecological Subsidy Regulation ontariff lists forarchitectsandengineers

1993

Totalcostfees

1991

Stromeinspeisungsgesetz orElectricActforfeed‐intariffs

(StrEG)

1990

ActforPromotionofNon‐ConventionalRenewableEnergies

(NCRE) EnvironmentandEnergySavingprogramme

1989

“250MWofWindEnergy”programme90

1985

Supporttofederalstatesforrenewableenergy


89Thisreplacedandextendedthe19981,000SolarRoofsprogrammewhereby50%ofinstallationcostsweresubsided,underwhich5MWhadbeeninstalledon2,500roofs(2kWperroof).Theaimof the100,000SolarRoofsprogrammewas to install300MW in100,000 roofswithanoutlayof€562m(Corrales,2015).90Thisreplacedandextendedthe1998100MWofWindEnergyprogramme(Corrales,2015).


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6.2. Actionsintheregulatoryfield

Inthissection,weshallexaminethevariousregulations(summarizedinthefigureabove)thatGermanyhasbeendevelopinginordertoprogresstowardsmeetingtheenergytransitiontargetssetoutintheEnergiewende.

RenewableEnergy

In 1990, the German Government approved the first Law on Promotion ofUnconventionalRenewableEnergies(ERNC).Thisisaclassificationforsolar,wind,tidal, geothermal,biomassandhydroelectric energyof less than20MW(IRENA,2014).

Asdiscussedbelow,theFeed‐inTariffssystemwasintroducedforthefirsttimein1991withtheStromeinspeisungsgesetz(StrEG).Thislawwasmeanttoensurethatallelectricityfromrenewableenergysourcesfedintothegridbyproducerswouldbepurchased,thankstotheFiT.

TheRenewableEnergiesAct(EEG)isaprogrammeofmarketincentivescreatedin2000 and intended to consolidate the introduction of renewable energies. Theprogramme isseenas thedriver for thedevelopmentofrenewablesourceswithreducedimpactonclimate.Indeed,itistheEEGthatestablishestheambitiousgoalsforrenewableenergiesmentionedinthetargetsoftheEnergiewende.

TheEEGalsospecifiesthatrenewableenergieshavepriorityofaccesstothegridandthatinvestorsmustreceiveahighenoughrecompensethroughaformoftariff–theFiT(Feed‐inTariff)–toensurethattheirinvestmentisprofitable,regardlessofelectricitypricesontheenergymarket.Italsomadeitpossibletodifferentiatenotonlybetweentechnologies(solar,windandbiomass),butalsobetweenthesizeoftheinstallations.

Despite successive amendments andmodifications, the promotion of renewableenergiesandhigherenergyefficiencystillstandsattheheartoftheEEG.In2004,itwasagainextensivelyamendedandFiTswereincreasedforbiomassandoffshorewind installations. In 2009 there was an attempt to bring growing output fromrenewableenergiescloser to thepowermarket.Thechanges introduced in2012soughttopromotethedirectsaleofrenewableenergytofinalcustomersthroughabonustoplantownersforthesaleoftheirelectricity.

Finally, the2014amendmentto the law(themostrecent)removesFiTs fornewinstallationsand introduces thecompetitiveauctionas themethod forallocatingremunerationfornewinstallations.Thusonlyplantsofunder100kWcomingintoserviceafter2015canreceiveaFiT.Afreshmodificationofthelawisnowbeingprepared(in2016)thatwouldmarkashift fromtheguaranteedFiTtotheopencompetitivebid.

Ground‐basedphotovoltaic is alreadybeing auctioned at a price of 8 cents/kWh(December 2015 auctions). From2017 this pricewill also apply to onshore and


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offshorewindenergy.91Intheformercase,themaximumpriceinthefirstbidwillbe7cents/kWhinthereferenceplace;themaximumpricewillbeintherangeof5.53 ‐ 9.03 cents/kWh, depending on the wind resource at the location, withadjustmentfactorsof0.79and1.29respectively(BMWi,2016b).

Renewableenergyforheating

Thelawonrenewableenergysourcesforheatingwasthefirst legislationtodealexplicitlywith renewable heating; it required builders to use renewable heatingsystems while the owners of older buildings could obtain financial support formakingrenovations.

Thelawwaspassedin2009anditsmaintargetwasfor14%ofheattocomefromrenewablesby2020.Ownersofnewbuildingsarerequiredtosourcepartoftheirheating supply from renewables. They can decide how to comply with thisrequirementand thosewhodonotwant touse renewableenergiescan increaseinsulationorcovertheirheatingrequirementsbyconnectingtozonalgridsorCHPunits.

Energyefficiency

InDecember2014theGermanGovernmentlauncheditsNationalEnergyEfficiencyplan(NAPE).92Withthisplan93GermanyhopestomeettheefficiencytargetssetintheEnergiewende toachievea20%reductioninprimaryenergyconsumptionby2020and50%by2050(comparedto2008levels).

All measures in the NAPE are based on a single principle: information‐support‐demand. In the first place, large‐scale provision of information and advice isrequired;secondly,investmentsandincentivesareneededforefficiencymeasures;andfinally,thecontributionofthedemandside,particularlyindustry,isrequired.Bywayof thisnationalplan, thecountryalso implementedtheEuropeanEnergyEfficiencyDirective.

Energyconservationinbuildings

InGermany,closeto40%ofallenergyisconsumedinbuildings,whereitismostlyused inheating. It is thereforeessential tomakeadjustments toconstructions toimprovethesituation.

In 2002, Germany established the Energieeffizienz initiative which focuses onpromotingefficiencyforthefinaluseinprivateresidencesandshops.TheEnergyConservation Ordinance or Energieeinsparverordnung (EnEV) arose out of thisinitiative.

91Fortheoffshorecase,tobelaunchedbetween2020and2024,amaximumpriceisexpectedforthefirstauctionof12cents/kWh,withanadjustmentof0.05cents/kWhforevery25meters(orpartthereof)ofwaterdepth.92Energyefficiency,apartfromhelpingtoaccomplishclimatechangetargets,alsohelpstoincreaseenergysupplybyreducingthequantityofenergyrequired.93(BMWi,2015e)


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In relation to the construction of new buildings, in 1990 the German energytransitioninitiatedthedevelopmentofthe“high‐efficiencypassivehome”butmuchworkremainstobedonetoincreaseenergyefficiencyinbuildings.

Germany can improve things by making its Ordinance for Energy Conservation(EnEV)stricter,especiallyduetoariseofenergypricesandincreasingrenovationfees.

Inaddition,whensolarroofsareaddedtopassivehomes,theresultwillbehomesthat produce more energy than they consume. These are known as energy‐plushomes.

Cogeneration

The Cogeneration Act, passed in 2002, sought to improve the situation of CHP.Germanywants25%oftheenergysupplytocomefromcogenerationunits,whicharemoreefficientthanproducingpowerandheatseparately.Thelawprovidesforbonusesdependingonthesizeofthesystem,regardlessofgenerationlevels.

Thelawwasamendedin2012tosetthebonusasfollows:forpowerunder50kWofproducedelectricity,5.41cents/kWh;from50to250kW,4cents/kWh;upto2MW,2.4cents/kWh;andforpowerover2MW,1.8cents/kWh.

Distributedgeneration

Althoughthereisnospecificlawondistribution,theEnergiewendealsofostersandpromotes distributed power generation, principally through the RenewableEnergiesAct(EEG)andthefeed‐intariffs(FiTs).

Distributedordecentralizedenergygenerationsystemsaredefinedasbeingsmallpowergenerationplants(between3kWand10kW)94thatprovideanalternativeorsupporttotraditionalhigh‐capacitygeneratingplants.

TheGermanenergytransitionisbasedonamodelofenergypolicyinwhichlargeelectrical firms coexist with decentralized generation owned by individuals andcooperatives.In2012,39.7%ofinstalledrenewableenergycapacitywasownedbyindividualsand10.8%belongedtofarmers(Weber,2013).Aswellastheeconomicbenefits mentioned above, distributed generation is a key element in meetingenergytransitiontargetsonefficiencyandrenewablegenerationandcontributestoachievingfavourablepublicconsensusontheEnergiewende.

Gridexpansion

Asweshallsee,theenergytransitionwillrequireanextendedandadaptedgridthatcanoperatewithmorerenewableenergy.In2011,theGermanParliamentapprovedalawtoaccelerategridexpansion,theNetzausbaubeschleunigungsgesetz(NABEG),in order to have a suitably operating infrastructure, adapted to future grid

94Fordistributedgenerationdefinitions,seeÁlvarez,E.yCastro,U. (2013),Redesdedistribucióneléctricadelfuturo.Unanálisisparasudesarrollo,Orkestra.


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requirementsthatwillallowthequalityofthepowersupplytobemaintainedandevenimproved.

Powertransmission95

Transmission inGermanyaccounts foraround20%of totalCO2emissions in thecountry,since95%ofthefuelusedcomesfromfossilresources.ThisisthereforeasectorthatrequiresmodificationsinordertomeetEnergiewendetargets.

Oneofthemodificationsrequiredisanincreaseintheuseofpowertransmission.The German Federal Government therefore approved the National ElectricTransportDevelopmentPlan96inAugust2009,withtheGermanFederalMinistriesfor Economic Affairs and Energy (BMWi), Transport, Construction and UrbanDevelopment (BMVBS or Bundesministerium für Verkehr, Bau undStadtentwicklung), Environment, Nature Protection, Construction and NuclearSecurity (BMU) and Education and Research (BMBF or Bundesministeriums fürBildungundForschung).Undertheplan,itishopedtohaveonemillionelectriccarsonthecountry’sroadsby2020(GermanyTrade&Invest,2014).

Attheendof2014,however,only20,000electricvehicleshadbeenregistered.Salesofelectricvehiclesincreasedby56%between2012and2013,alongwaybehindtheneighbouringNetherlands(281%)andNorway(129%).Thesecountrieshavepreferredtointroducehighsubsidiesandintelligentpoliciesratherthanattemptinglarge‐scale growth. Germany’s policy, however, is based on tax incentives forowners, which limits growth and only attracts a certain group of buyers. Forexample, in 2011, the German government launched a labelling regulation forelectriccarsalongthesamelinesastheNationalDevelopmentPlan,offeringfreeparking.TheGermangovernment’smainobjectivemustbe topromoteaccess toelectric vehicles among a more diverse group of people, a policy that has beensuccessfulincountrieswiththegreatestnumberofelectricvehiclesontheroads.

Germanypredictsthatincomingyears,technologicalprogress,includingadvancesin electric batteries, will boost the EV market. The government is thereforepromoting R&D projects related to sustainable transport. One example are themeasuresbeingtakentopromotenaturalgasvehicles.Additionally,thegovernmentwillcollaboratewithlocalgovernmentstocreatethenecessarypublicinfrastructuretosupportelectrictransport.

Theuseofelectrictransportisonesolutiontotheproblemscurrentlyposedtotheenergy transition by the transport sector, since it will reduce fossil‐fuelconsumption and thus CO2 emissions. It will also cut dependency on oil and oilproductsandincreasetheconsumptionofrenewableenergy.

The use of gas vehicles is also growing in Germany, albeit without ad hoc legalmeasures.Thisismainlyduetotheincentiveinvolvedinhavingareducedgasprice

95(EuropeanCommission,2009)(Dubon&Morris,2015)(BMWi&BMU,2010)96(DieBundesregierung,2009)


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andthefactthattheautomobilecompaniesthemselvesarepromotingthiskindofvehicle. Germany has the second‐largest fleet of compressed gas vehicles (NGVGlobal, 2016) in Europe, so this could be the next great penetration of fuels intransport.Inanycase,thefallinthepriceofcrudeoilmeansthat,forthemomentatleast,themovetowardsEVsisprovingslowerandlessfeasible.

Inaddition, thesamecriteriamightbeapplied to increase theuseofbiogas.TheGerman ministry for food and agriculture (BMVEL or Bundesministerium fürErnährung und Landwirtschaft), together with the Worldwatch Institute, isdevelopingaresearchprojectontheglobalpotentialofusingbiofuelsforlarge‐scalemotorizedtransport.

Energymarket

ThecurrentGermangovernmentisattemptingtochangeenergypolicymainlyinordertoavoidamajorincreaseinelectricityprices.

Themainreduction incosthasbeenbroughtabout throughphotovoltaicenergy.HoweverMinisterfortheEconomyandEnergy,SigmarGabriel,saysthatchangesinwindenergyarealsoneededastheglobalobjectiveistoavoidariseincosts.

Another question to be considered is the capacitymarket,which is viewed as amedium‐term project. As mentioned, renewable energy represents a greaterproportionofsupplyandconventionalplantsoperatefewerhours.Thus,toavoidtheclosureoftoomanyconventionalplants,itmaybehelpfultomakepaymentsbycapacity,toensurethattheyremaininreserveasaback‐upsupply.

Opinions differ as to the need for capacity markets. The Agora Energiewenderesearchcentrewarnsofapossiblegenerationcapacitydeficitasaconsequenceofnuclear switch‐off in 2022. The BDEW (Der Bundesverband der Energie undWasserwirtschafte.V.orGermanAssociationofEnergyandHydricIndustries)alsoargues that a capacity market is required. On the other hand, however, thetransmissionsystemoperatorTenneTbelievesthatanenergymarketwillcontinuetoguaranteesupplysecuritywithouttheneedforacapacitymarket.

Nature,ecologyandtheenvironment

TheFederalGovernmentactivelypromotesprotectionoftheenvironment,climate‐respectfuldevelopmentstrategiesandenergycooperationandframesitsworkinaglobalperspective.

Since 1994, nature protection has been established as a state objective in theConstitution97: “Article 20.a. (Amended 26/07/2002) [Protection of the naturalfoundations of life and animals]:Mindful also of its responsibility toward futuregenerations, thestateshallprotectthenatural foundationsof lifeandanimalsbylegislationand,inaccordancewithlawandjustice,byexecutiveandjudicialaction,allwithintheframeworkoftheconstitutionalorder”.

97(DeutscherBundestag,2010)


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Germanyistheworld’ssecond‐largestbenefactorinfinancingclimateprotection.The country sets aside funds for promoting climate actions intended tomitigateclimate change, by assuming measures that allow more efficiency, financingrenewableenergies,electrictransport,etc.

In 1999, Germany introduced an “eco‐tax” on the litre of petrol and the kWh ofpowergeneratedfromfossilfuelsthatincreasedannually.Thiswasframedasataxonactivities thatwereenvironmentallyharmfuland importantexemptionswereprovidedtoindustry.Thetaxyielded€19billionin2003,whichwassetasideforreducing the chargeson companies andworkers for social obligations (Corrales,2015).

Onepossible effect hasbeen the fall inGHGemissions from transport; despite aconsiderableincreaseinthevolumeoftraffic,in2015emissionlevelswerebelow1990levels.

Nitrous oxide emissions have also been cut by about 50%. Desulfurization ofcombustiongasesisalsorequiredbylawandasaresult,sulphurdioxideemissionshavebeenreducedby90%insoftcoalandligniteplants(Wille,2015).

However,incomefromenvironmentaltaxes98inGermanycameto€57,852millionin2013,5.4%oftotal taxrevenue,downonthefigurefor tenyearsago,when itstoodat€57,813millionandaccountedfor6.9%oftotaltaxrevenue(Valera,2015).

Another important tool for energy transition in the eco sphere is theEco‐designDirective, which is the main instrument for removing products with the worstenvironmental performance. This essential piece of legislation, implementedthroughoutEurope,isstilloneofthemostimportanttoolsforreducingthedemandfornewgridsandgenerationplantsinGermany,anditisthereforeacrucialaspectoftheenergytransition.

The 2005 Ecological Directive (known since 2009 as the Directive for Energy‐RelatedProductsorErP)hasitsoriginsinBrusselsandregulatestheefficiencyofenergy‐consuming products, with the exception of buildings and cars. The ErPDirective establishes minimum rules for different product categories. It alsoenvisages life‐cycle evaluations for certain products in order to determine theirenvironmentalimpactandidentifywaysofimprovingthem.

The directive does not only involve products used by energy producers andconsumersbutalsoproducts thataffectconsumption.TheErPDirectiveseekstosolvetheabsenceofproduct‐specific informationonenergyconsumptionsothatconsumerscanseehowmuchitwillcostthemiftheybuyaparticulardevice,usingthe “efficiency label” based on European energy labelling standards. The ErPDirectivethuslimitslow‐efficiencyproducts,whileatthesametimeitseekstoguide

98TheOECDandtheInternationalEnergyAgency(IEA)defineenvironmentaltaxesasbeingthosewhosetaxbaseconsistsofaphysicalunitofamaterialthathasaconfirmedandspecificnegativeimpactontheenvironment(EuropeanCommunities,2001).


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demandtowardsthehighestefficiencylevelsbyconvincingconsumerstobuythebestproducts.

In2010GermanyalsocreatedaSpecialFundforEnergyandClimatewithNationaland International Initiatives for Climate Protection (now known as ClimateInitiatives).Additionally,thecountryhasanUmweltbank,99abankspecializinginenvironmentalprojects.

Gradualabandonmentofnuclearenergy.“Atomausstieg”

ThegradualabandonmentofnuclearenergyorAtomausstiegisapivotalelementintheGermanenergytransition.

In2000, theSocialDemocratsandGreencoalitiongovernment,underChancellorGerhardSchroeder,reachedanagreementwiththeindustrytoclosethecountry’snuclearplantsaftera32‐year lifecycle.At that time,19nuclearplantswerestilloperatinginthecountry.

By2010,thenuclearcontributiontoGermanenergysupplyhadfallenfrom30%(in1999)to23%,reflectingthegradualclosure,withtwoofthe19nuclearplantsshutdown.

FollowingtheFukushimaaccidentinJapanon11March2011,theGermancoalitiongovernment led by Angela Merkel resolved100 to close eight nuclear reactors(locatedinsevennuclearplants)ofthe17inthecountry,andtargetedacompleteshutdownofnuclearpowerby2022,byclosingtheremainingnine(12,060MW).

ItshouldbenotedthatChancellorMerkelalsoincludedanexitclause,whichwouldallowareturntoAtomausstiegintheeventofanenergycrisisandsheallowedtwonuclearplantstobekeptonstand‐by(Sánchez,2011).

6.3. Feed‐inTariffs(FiTs)

Feed‐in tariff (FiT) systems involve the government setting the prices of tariffs,whichvarydependingonthetypeofrenewableenergy(solar,windorother).Thesizeofthegenerationplantanditslocationmayalsobetakenintoaccount.

OneofthemaincharacteristicsinanyFiTsystemisthatthereisaguaranteethatalltheelectricity fed into thegridwillbepurchased. Furthermore, thesepricesareestablished for long periods, in some cases covering the entire life cycle of theinstallation(forexample,20years).

99Theinstitution,basedinNuremberg,investsexclusivelyinecoprojects,suchastheconstructionofecohousesandsolarandwindenergyprojects.Sinceitwasfoundedin1997,ithasfinanced13,700projects toa total amountof€1.37m,ofwhichalmost50%were loans for solar energyprojects(UmweltBank,2015).100ThisdecisionmayhavebeenmotivatedbyregionalelectionsthattookplaceduringtheincidentsatFukushima,whichwereseenasasortofreferendumonnuclearenergyandinwhichtheGreenswonasignificantshareofthevote.


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Throughthesemeasures,thegovernmentintervenesinthepriceatwhichthepowerispurchasedfromtheproducer,thusguaranteeingtheproducerboththesaleandtheprice,allowingthemtorecovertheirinitialinvestment.

TheInternationalEnergyAgency101seesFiTsasthebestoptionforensuringfastandeffectivedevelopmentofrenewableenergy.GermanFiTshavehelpedboosttherenewableenergyindustry,notonlyinGermany,butalsoinothercountries,asweshallsee.

GermanFiTsystem

Feed‐intariffsareafundamentaltoolforthedevelopmentofrenewableenergies,andthereforefortheEnergiewende.

Asalreadydiscussed,at thebeginningof1990,GermanyproposedaverysimplepolicytopromoteproductionofpowerfromrenewableenergysourcesthroughtheStromeinspeisungsgesetz (law on power take‐up from renewable sources to thepublic grid) or Feed‐inTariffsAct (StrEG).As enacted in 1991, the law includedwind,solarandsmallhydrogenerators.In2000,withthepassingoftheRenewableEnergiesAct(EEG),FiTswerereviewedandincreased.Sincethen,theyhavebeenreviewedeverythreeorfouryearsandthelawamended.

The FiT establishes different tariffs for fed‐in power for each kind of renewableplant,dependingonplantsize, locationandtypeofenergyproduced. Itwasalsoguaranteedthatthesetariffswouldberespectedinthelongterm,withfixedperiodsofupto20years(dependingonthetypeofrenewableenergy),asshowninthetablebelow.

TABLE17.FiTfordifferenttypesofRE(years)

WIND PHOTOVOLTAIC HYDROELECTRIC BIOMASS20 20 15– 30 20


The differentiation in tariffs is intended to prevent disproportional support forplantsthatdonotneedit,asthiswouldrepresentinefficientusageofresources.Forexample, solar and geothermal energy enjoy a high tariff, but for hydroelectricenergyitislower.

The costs of establishing this special tariff are assumed by the consumers, asexplainedinChapter7.Thus,Germanyhaslowpricesforsolarenergy,notbecauseit enjoys abundant sunlight, but because of investment certainty and marketmaturityresultingfromitspremiumspolicythankstoFiT.

IntheGermansystem,anothercharacteristicelementoftheFiTistheprogressivereductionoffixedtariffs.Thismeansthateachyear,tariffsfornewplantscomingonlinethatyeararereducedbyagivenpercentagecomparedtotherateoriginallyset.Forexample,duringthefirstyearaplantcomesintooperation,itcanaccess100%

101(Gipe,2013)


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ofthetariffbecauseofthedurationofthatbenefit(forexample,15years);aplantcomingon line in the secondyear canaccess95%of the tariff in the restof theperiod,andsoon.

TABLE18.InitialFiTstructuredefinedintheEEG(2007)

SOURCEPOWERRANGE

FiT(eurocents/kWh) REDUCTION

Solar

In

buildingsIntegratedinbuildingfronts

Othersystems

5%and6.5%forothersystems

<30kW 49.2 54.2

3830kW‐100kW

46.8 51.8

>100kW 46.3 51.3

Biomass

GeneralRenewable

rawmaterials

CogenerationTimberwaste

1.5%

<150kW 11 17 13 11150‐500kW

9.5 15.5 11.5 11

500kW‐5MW

8.512.5(11forwood)

10.5 8

5MW‐20MW

8.0 80 10 8

Hydro‐electric

Large

<500kW 7.4

1%

500kW‐10MW

6.4

10‐20MW

5.9

20‐50MW

4.4

50‐150MW

3.6

Small500kW 9.75MW 6.6

Geothermal

5MW 15

1%10MW 1420MW 9>20MW 7.2

Wind

Offshore Installedbefore31/12/2010

Installedafter31/12/2010

2%9.1 6.2

Onshore Untilfifthyearafterinstallation

Fromfifthyearafterinstallation

8.2 5.2

Landfillgas,sewagegas,mine

gas

Traditionaltechnology

Specificinnovationtechnology

1.5%500kW 7.3 9.3500kW‐5MW

6.3 8.3

>5MW Marketprice

Source:Ownelaborationfrom(Heldetal.,2007)

The reduction varies depending on the type of technology. The purpose is topromotethedevelopmentoflessmaturetechnologieswithaprogressivelystronger


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reduction.Inthisway,companiesthatmanufacturesuchtechnologiesdonotfeelthepressureofotherpowercompaniestocontinueinnovating.

Astheformertableshows,reductionsinfeed‐intariffswereprogrammedintheEEG(generally on an annual basis) in order to ensure that the price of renewableenergies would continue to fall and that these energies would become morecompetitive.

Theseprogrammedreductions inFiTpaymentsanswer thosecriticswhoarguedthatthesesystemsdidnotpromoteacheapertypeofrenewableenergy.Inadditionthese reductions have been increased and updated on the basis of technologicalprogressinNCRE.

GRAPH44.ChangesinFiTfees

Source:(Morris&Pehnt,2012)

The table below gives details of the reductions established in the FiTs for solarphotovoltaicandtherepercussionsofthesedevelopments.


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FIGURE18.DevelopmentoftheFiTsystemforphotovoltaicsto2012

Policychanges Variation Effect2000

51cents/kWhremunerationforthefirst20years(regardlessofinstallationsize).

Annual programmed reductionby5%.

Increase in cost of photovoltaicsfrom €19m (2000) to €37m(2001).

2003

Reductioninpro‐ratasystemofEEGforlargepowerconsumersby0.05cents/kWh.

Increase in remuneration forsolarroofsto54.7cents/kWh.

Reduction of the cost of thephotovoltaicsystemfrom€6/Wp(2002)to€4.70/Wp.

Increaseincostofphotovoltaicsto€1.47billionin2007.

2009

Reduction in remuneration by8‐10%to2010+/‐1%peryearincasesof installedcapacityof>1500MWor<1000MW.

Optionforownconsumptionat25.01cents/kWhorsaletothirdparties.

2010

Reduction in remuneration by

8‐13%dependingonsize. Additional one‐off reduction of

10%inJulyand3%inOctober.

2011

Adjustment of remunerations

by3,6,9,12or15%dependingon technology between MarchandMay.

Reduction in cost of thephotovoltaic system from€4.3/Wp(2008)to€2.05/Wp.

Increaseincostofphotovoltaicsto€6.8billionin2011.

2012

Adjustmentofremunerationfor

own consumption to amaximumof12.36cents/kWh.

Source:Ownelaborationfrom(Hoppmann,Huenteler,&Girod,2014)

Thefollowinggraphcomplementstheabovetable.ItshowsthevariationinFiTinphotovoltaic,dependingoninstallationsize.


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GRAPH45.FiTvariationforphotovoltaicenergy(cents/kWh)toOctober2013

Source:BNetzAin(Chabot,2013)

Forthecaseofwindenergy,theFiTsystemin2012wasasshowninthetablebelow.

TABLE19.FiTstructureforwindenergyto2012

Type Tariff Reduction

Onshore 9.11cents/kWh(initial) 5.02cents/kWh(basic)

1%

Onshorerepowering 9.2cents/kWh(initial) 5.02cents/kWh(basic)

1%

Offshore 13cents/kWh(initial) Bonusof2cents/kWh(forfast

construction)5%

Bonus 0.5cents/kWh(newplants) 0.7cents/kWh(oldplants)

Note:tariffsforoffshoreplantsdependonfactorssuchaswaterdepthanddistancetocoast,whicharefixedatbetween5and20years.

Source:OwnelaborationfromBMUin(GorozarriJiménez,2012)

Since the 2012 reform of the EEG, renewable installations have the option ofreceivingFiTsorgoingtomarketandreceivingacomplementarybonus.

Oneof thesebonuses is theMarktprämie102ormarketbonus,established inMay2011 by the Federal Environment Minister, Norbert Röttgen, to achieve betterintegrationof renewableenergies in themarket.Themarketbonusoffersacashrewardtoproducersofelectricityfromrenewableenergysourcesorgaswhosupplytheirpowerdirectlytoathirdpartyortomarkets.

102(NETZ‐TRANSPARENZ.DE,2012)(BundesanzeigerVerlag,2012)


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Inaddition,aspartofthemarketbonus,plantoperatorswithreliableforecasts(onthe amount of electricity they will produce) receive a management bonus(Managementprämie)oranadditionalfixedincome.Thisisimportant,sinceinordertoobtainanoptimalpriceonthemarketforelectricityfromrenewablesources,veryprecise predictions are required on renewable energy production with a priorknowledgeof thereservesthatwillbeneededor theenergytobebought.Theseadditionalbonusesbroughtthetotalto€2.2billionin2013and€3.1billionin2014.

The following table summarizes the evolution of payments by type of EEGapplication.

TABLE20.Valueofmanagementbonuses(cents/kWh)

YearOnshoreandoffshorewindenergyandsolarenergy

Hydro,landfill,sewageandminegas,biomassand

geothermal2012 1.2 0.32013 0.65‐0.75 0.2752014 0.45‐0.6 0.252015 0.3‐0.5 0.225

Source:Ownelaborationfrom(BuzerSystematischeNormdokumentation,2015)

Mostwindtechnologyinstallationshavegonetomarket,mainlythankstothebonusincludedintheEEG,whilesolarphotovoltaiccontinuestoavailofFiTs.Therehasbeen an increase in costs associated with the incorporation of photovoltaictechnology,with19,300GWhinFiTspayinganaverageof€401/MWh.

However,MinisterSigmarGabrielhassaid103thatsubsidiestorenewables“arenotsustainable”.In2014heamendedtheRenewableEnergiesAct(EEG)onthegroundsofthemajorinvestmentitinvolvedforGermanyandthepossibleharmtocommonmarketcompensation(investigatedbytheEuropeanCommission).

Thereform,104approvedbytheBundestagon27Juneof2014by424votesto123,involvedareductioninsubsidiestorenewableenergyproductsandinthoseenergytargets. Although theminister indicated that the reformwas “urgent” given theexplosion inprices, themeasurewascriticizedby theGreensandenvironmentalassociations.GreenMPsaccusedhimof“havingfinallysupportedtraditionalenergysourceswiththislaw”.

103(EFE,2014)104(REVE,2014b)


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TABLE21.StructureofFiTfordifferenttechnologiesfrom2014

Type Tariff(onlyfornewinstallations)Average(installationsfrom2000to2012)

Photovoltaics 9.9– 14.3cents/kWh 36.2cents/kWhOnshore 8.8– 9.8cents/kWh 9.3cents/kWhOffshore 15– 19cents/kWh 16cents/kWh

Hydroelectric 3.4– 12.6cents/kWh 9.2cents/kWhBiomass 5.9– 25cents/kWh 18.2cents/kWh

Geothermal 25– 30 cents/kWh 21.8cents/kWh

Note:tariffsforphotovoltaicshaveprogrammedmonthlyreductions.

Source:Ownelaborationfrom(Graichen,2013)

Itisimportanttorememberthatanewamendmenttothelawisbeingpreparedfor2016whichcouldpromotetheswitchfromguaranteedFiTtoopencompetitivebid.

Thenetresultofallthesedevelopmentshasbeentoproduceimportantoutlaysforthedevelopmentofrenewableenergies.ThetablebelowshowsthedevelopmentofpaymentsmadeasaconsequenceofapplicationoftheEEGbetween2011and2014.

TABLE22.Payments105byEEGapplicationtypebetween2011and2014(€m)

Cost(€M)

FiT 2011 2012 2013 2014Hydroelectric 231 271 303 253Onshorewind 4,164 1,344 688 661Offshorewind 85 13 ‐ ‐Photovoltaic 7,767 8,904 8,587 9,153Biomass 4,476 4,872 4,059 2,645

Geothermal 4 6 16 13Others 36 42 38 45Total 16,763 15,416 13,691 12,770

MARKET 2011 2012 2013 2014Hydroelectric ‐ 157 210 230Onshorewind ‐ 3,585 4,179 4,800Offshorewind ‐ 107 153 1,200Photovoltaic ‐ 298 889 1,050Biomass ‐ 1,389 2,725 3,400

Geothermal ‐ 0 3 4Others ‐ 10 20 35Total ‐ 5,546 8,177 10,719

Source:OwnelaborationfromBMWiyBNetzAin(Corrales,2015)

Since2000,theEEGsupportsthedevelopmentofrenewableenergiesinGermanyand provides annual financing of €20 billion to the production of solar, wind,geothermalandhydroelectricenergy.Themostrecentamendmentisintendedtostrikeabalancebetweenpricesforconsumersandsupportforrenewables.Thanks

105 Photovoltaic energy data do not include self‐consumption, through which 821 GWh weregeneratedin2013and2,788GWhin2014.Themarketenergysystemalsoincludesmanagementandmarketbonuses.


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tothesystemofsupporttoFiTs,upto201310633,730MWofrenewablepowerhadbeeninstalled.

Additionally, as reported in PV Magazine,107 Minister Gabriel himself plans toreplaceFiTwithanauctionsystemby2017onrecommendations fromBrussels.Renewableenergieswouldthushavetocompeteonthemarketastheywouldnothave guaranteed purchase prices. The first changes will apply to photovoltaicenergy.

Thus,from2015on,FiTwillendforNCREsofover500kW,withtheceilingfallingto250kWin2016and100kWin2017(Galetovic&Muñoz,2014).

106(Energíaysociedad,2015)107(Enkhardt&Meza,2014)


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7. ELECTRICITYPRICES

OneofthemaincriticismslevelledagainsttheEnergiewendeisthatitentailshighercost, given that the introduction of renewables currently requires majorinvestment.108

Indeed,investmentinrenewablepowergenerationfacilitiesinGermanyoverthelast25yearshascometoover€200billion,ofwhichmorethan70%hasbeenmadeinthelast10years(BMWiin[Corrales,2015]).

Photovoltaicgenerationaccountsformorethan50%oftheinvestment(€110bn),followedbywindgeneration(onshoreandoffshore)at35%(about€70bn)andsmaller investments in biomass, hydroelectric and other renewable technologies(Corrales,2015).

Morethan25%oftheinvestmenthasbeenmadebyGermanhouseholds,primarilythrough public bank financing. Another important part of the investment comesfrompublicentitiessuchaspensionfunds,collectiveinvestmentassociations,etc.

Continuedinvestmentisexpectedincomingyearsinnewinstallationsandenergyinfrastructures,asthegraphbelowshows.

GRAPH46.ExpectedinvestmentfromtheEnergiewendebyactivity(€bn)

Source:(Blazejczak,2013)

German consumers were forced to paymore than €20 bn in 2014 to subsidiseelectricity from solar,wind and biogas plants,when the realmarket value is nogreater than €3 billion. However, the process is still underway and thetransformationof theenergysystem–and theGermansystem inparticular–willrequiremajorinvestmentbothingenerationandgridinfrastructures.

108ThosewhodefendtheEnergiewendeconsiderthatcostswillremainlowinthis“firstphase”.


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GRAPH47.Accumulatedinvestmentsrequiredinfuturegenerationandgridstructure(2010‐2030)inbillioneuros

Note:basedontheplanbytheTSO,Netzentwicklungsplàn.

Source:(Heuskel,D.;2013)

According to theTransmissionSystemOperators (TSO),109 for2016 the figure110willbe€23,066million,9.5%morethanin2015.

7.1. Electricityprices

With introduction of the Energiewende,Germany has one of the highest energyprices111fordomesticconsumersinEurope.Asthegraphbelowshows,ithasthesecondhighest112 price (€0.295/kWh), just behindDenmark (€0.308/kWh). ThepriceofelectricityfordomesticconsumersinGermanyis42%abovetheEuropeanaverage (€0.208/kWh). Moreover, based on 2014 data, when power prices arecompared to Purchasing Power Parity (PPP), Germany has the highest price(€0.282/kWh).

109(NETZ‐TRANSPARENZ.DE,2015)110Thisamountbasicallyconsistsofthetransfertothecostofrenewables(€22,876millionin2016),minusincomefromsaleonthemarket,takingintoaccountadjustmentsbytheEEGresultingfromdivergencefromestimationsplustheliquidityreserve.111Cautionshouldbeexercisedwhenapproachinganycomparisonbetweenelectricityprices–andespeciallytheircomponentparts–amongEUMemberStates.Theclassificationforthemainenergycostcomponents(energy,gridsandtaxes)hasbeenfoundtovaryfromcountrytocountry.However,followingastudybyEurelectric,ithasbeenpossibletopresentthedifferencesbetweenthedifferentcostcomponentspresentedbyEurostat(Eurelectric,2014).112(Eurostat,2015)


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GRAPH48.Comparisonofelectricitypriceinthesecondquarterof2015inEurope(€/kWh)

DOMESTICCONSUMERS

INDUSTRIALCONSUMERS

Note1:Theelectricitypricefordomesticconsumersisdefinedfromthenationalaveragepricein€/kWhwithtaxesandotherchargesthatcanbeappliedforthesecondhalfof2015fordomesticconsumerswithanannualconsumptionofbetween2,500and5,000kWh.

Note2:Theelectricitypricefordomesticconsumersisdefinedfromthenationalaveragepricein€/kWhwithallcostsincludedforthesecondhalfof2015forindustrialconsumerswithanannualconsumptionofbetween0.5and2GWh.

Source:(Eurostat,2015)

GermanyisusedtogivingtherestofEuropelessonsoncompetitiveness.However,Germanindustrymayfaceproblems:accordingtoofficialdatafromEurostatitpays40%moreforenergythanFranceorHolland,anditsbillsare15%higherthantheEuropean average. Although the German intensive energy‐use sector receivesassistanceintheformofreducedtaxes,othersectorssuchasthechemicalandsteelindustriesareamongthemostseriouslyaffectedbythecostoftheEnergiewende,whichcomesto€740m/year.

0,00000,05000,10000,15000,20000,25000,30000,3500

EU‐28

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German energy‐intensive industry113 accounts for a large percentage of thecountry’s economy in comparison with the OECD average. The energy bill isthereforeanimportantfactorforcompetitivenessoftheindustrialsectorandtheGermaneconomyasawhole.

GRAPH49.ElectricitypricebeforetaxinGermany(€/kWh)

Domesticconsumers Industrialconsumers

Note 1: for domestic consumers, the power price is defined by half‐year and year after taxes for mediumdomesticconsumerswithanannualconsumptionofbetween2,500and5,000kWh.

Note 2: for industrial consumers, the power price is defined by half‐year and year after taxes formediumindustrialconsumerswithanannualconsumptionofbetween0.5and2GWh.

Source:Ownelaborationfrom(Eurostat,2015)

Based on 2015 data114 the average electricity price before tax for a domesticconsumerandanindustrialconsumerwereverysimilar,at€0.15/kWhand€0.08€/kWh respectively; after taxes are taken into account, that difference widensconsiderably,with prices standing at €0.297 /kWh for domestic consumers and€0.15/kWhforindustrialconsumers.

Taxesandratesmakeupabout52%oftheelectricitypricefordomesticconsumersinGermany.Inaddition,theenergytransitionandtheEEGhavesparkeddebatesontheincreaseincostsforthecountry’sindustrialconsumers,forwhom46%oftheenergypricecorrespondedtotaxesandotherchargesin2015.

113Aluminium,chemicalproducts,steelandglass.114(Eurostat,2015)

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GRAPH50.ElectricitypriceinGermany(€/kWh)

Domesticconsumers Industrialconsumers

Note 1: for domestic consumers, the power price is defined by half‐year and year after taxes for mediumdomesticconsumerswithanannualconsumptionofbetween2,500and5,000kWh.

Note 2: for industrial consumers the power price is defined by half‐year and year after taxes formediumindustrialconsumerswithanannualconsumptionofbetween0.5and2GWh.

Source:Ownelaborationfrom(Eurostat,2015)

Although the increase has been similar (in both cases the price has doubled),domesticconsumershaveshoulderedahigherburdenthanindustrialconsumers,astheydonotenjoythetaxexemptionsawardedtoindustry.

Thus,anaverageGermandomesticconsumerspends€86.04permonthonpower,representing2.25%ofthemonthlywage.

TABLE23.PowerexpenditureforanaverageGermandomesticconsumer

CONCEPT QUANTITYAverageannualsalary(2014) €45,952

Averagemonthlysalary €3,829Averageannualpowerconsumption 3,500kWhAveragemonthlypowerconsumption 291.67kWh

Powerpricefordomesticuse(October2015–taxesincluded) €0.295/kWhAveragepowerexpenditureperyear €1,032.50Averagepowerexpenditurepermonth €86.04

Powerexpenditureasapercentageofsalary 2.25%

Note:Adomesticconsumerisanaveragethree‐personhousehold.

Source:Ownelaborationfrom(Expansión/Datosmacro,2014)(IndexMundi,2014)

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This figure is relevant, given thateachyearpower supply is cut115 tomore than300,000Germanhouseholdsfornon‐paymentofbills.Itisthereforeimportanttobearinmindthatahouseholdof3peoplepayspracticallytwiceasmuchnowasin2000.

Thisisanimportantfactorthatmightleadtoaquestioningoftheenergytransitionprogrammeandadeclineinpublicsupportforit.

Indeed,moreandmoreGermanpeoplearenowexperiencingEnergiearmut116orenergy poverty, defined as having to spendmore than 10% of one’s income onenergy.

As a result of a sharp increase in electricity prices compared to salaries, theproportionofGermanhouseholdssufferingenergypovertyincreasedfrom13.8%to17%between2008and2011,anincreaseof1.4millionhouseholds.Therehasalsobeenanincreaseinthenumberofhouseholdswhosesupplyhasbeencutoffbythe energy suppliers. Therefore, although support for theEnergiewende remainshigh,insurveystheproportionwhofeltthattheenergytransitionwas“correct”fellfrom63%to56%between2011and2013.

7.2. Energiewendesurcharge

According to J.M. Martí Font,117 this continued rise in electricity prices forconsumers and companies is due to the surcharge set aside for financing theEnergiewende,whichhasbeendevelopedthroughtheRenewableEnergySourcesAct(EEG)mentionedabove(Section6.1).

AsdiscussedinthesectiononprogrammesandlawssupportingtheEnergiewende,inordertoprovidesupport for the introductionofrenewableenergies,GermanypromulgatedtheRenewableEnergiesAct(EEG).

TheEEGgivesrenewableenergiespriorityaccess to thepowergridandsets thefeed‐inpricefora20‐yearperiod.

Inordertocoverthecostsresultingfromthislaw,powerconsumershavetopaywhatiscalledthe“EEGsurcharge”orEEG‐Umlage.Asthegraphbelowshows,theEEG‐Umlagewas6.24cents/kWhin2014,ormorethan20%ofthecostofelectricityfora3‐personhousehold.

EEG‐Umlagepaymentsin2014areestimatedtobeabout€22billionandthetotalamountofpaymentsforrenewablessincetheschemewasintroducedareestimatedtocometo€185bn(Rutten,2014).

115(Waterfield,2014)116(Rutten,2014)117(MartíFont,2014)


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GRAPH51.DevelopmentoftheEEG‐Umlage(cents/kWh)andpaymentstotheEEG(€bn)from2000to2014


Thisgraphiscomplementedbytheonebelow,showingdevelopmentofEEG‐relatedcostsbytechnology.

GRAPH52.DevelopmentofpaymentstotheEEGfrom2000to2014(€m)


Ascanbeseen, theEEG‐Umlagehasrisensteadilyand itnowseemsessential toreversethistrend.In2000,thecostcametolessthan€1billion,in2006itwasover€5billion,in2009€10billionandby2012€20billion.

AccordingtoEnergyMarketPrice,118theEEG‐Umlageiscurrently310%higherthanbefore the beginning of the Energiewende in 2010, clearly showing the latter’sinfluence.

118(EnergyMarketPrice,2015)


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SinceMay2014,theGovernmenthasapprovedaseriesofmeasurestotrytolimitthispriceincrease,whichwouldbasicallydiscouragethecreationofnewwindandsolarfarms.

The increase in costs hasmainly been due to the fact that there has not been asimultaneousreaction to thechanges in thecostsof renewable technologies.Forexample,thecostofaphotovoltaicmoduledroppedsignificantlybetween2010and2012andyettariffsremainedsignificantlyhigh,despitethefactthattheyhadfallen(asanalysedinthesectionontheFiT)incomparisontotherealcost.Thisledtoa23 GW increase in the installed photovoltaic capacity in a three‐year period,considerablyincreasingthetotalcostfortheEEG.

Inordertopreventthishappeninginthefuture,in2014theGermangovernmentintroducedwhatareknownas“extensioncorridors”intheEEGtoestablishspecificcaps on extension of capacity for each renewable technology. With this move,subsidiesforrenewableswillbesuspendedandfortheexpansionofoffshorewindenergytheywillbelimited.Moreover,eachyearonly2.5GWextrafromwindandsolarorigincanbeadded,whilstoffshorewindenergywillhavealimitof6.5GWin2020. In addition, in January 2015, auctions for photovoltaic installations wereregulatedthroughanEEGordinance.

Oneofthemeasuresthatwillhavethegreatestinfluenceonareductionincostsisthatfrom2017renewableswillhavetocompeteonthemarket,sincesupplierswillnolongerhaveguaranteedpurchaseprices(asexplainedinthedescriptionoftheFiTsysteminSection6.3).AsSocialDemocratSigmarGabriel,ViceChancellorandMinisterofEconomyandEnergyputsit,119“Thesemeasuresmeanthatwecannolongercontinuebelievingintheillusionthattheenergytransitioncanbeachievedonlybyhigh‐speedexpansioninproductionfromrenewables;theexpansionmustalsobesecureandpredictable”.

However,on15October2015,thefourtransmissionsystemoperatorsinGermany(50Hertz, Tennet, Amprion and TransnetBW) received confirmation that theallocation120forrenewableenergypromotion,theEEG‐Umlage,wouldincreaseby3%in2016,risingrise from6.17cents/kWh(2015) to6.354cents/kWh.This isbrokendownbytechnologyinthegraphbelow.

119(Orth&Schayan,2014)120(STIMME.DE,2015)


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GRAPH53.BreakdownoftheEEG‐Umlage(cents/kWh)of2016

Note1:Thereserveistheoneusedforadjustingthedifferencesbetweentheestimatedcostandthatactuallyproduced.

Note2:ThesurchargeforthepreviousyearisduetoasurpluswhichledtoareductionintheEEG‐Umlage.

Source:Ownelaborationfrom(NETZ‐TRANSPARENZ.DE,2015)

Thischarge121hadneverbeensohighandGermanindustryandtheGreensblamethe Federal Minister of Economy and Energy, Sigmar Gabriel (SPD) for thesegrowingcosts.

7.3. Exemptions

However,therearevariousexemptionsfromtheEEG‐Umlage.Themostimportantisthatawardedtoindustrialuserswithhighenergyconsumption,buttherearealsoother,lesssignificantexemptions,includingagreenelectricitybonus.

Userswithhighenergyconsumption(whomakeupanimportantpartoftheGermanmanufacturing industry)havereceivedpartialexemptions fromtheEEG‐Umlage,basedontheirannualpowerconsumptionandthepercentageoftheirgeneralcostsgoingtoenergy.

Thus,asindicatedintheEEG,122industrieswithanannualpowerconsumptionofmorethan1GWhandforwhompowercostsaccountfor14%ormoreofgrossvalueadded(GVA)receiveexemptionsfromtheEEG‐Umlage.Theseexemptionsrisewithconsumption:thoseconsumingbetween1and10GWh/yearpayonly10%ofthesurcharge,between10and100GWh/yearthisfallsto1%andforconsumptionof

121TheGreens’energyexpert, JuliaVerlinden,saysthat this increasecouldhavebeenavoided“ifGabrielhadmanagedtoavoidtheincreaseincoal‐firedpoweronthemarket”.122Section41oftheEEG(BMWi,2014b)(Lang&Lang,2013).


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over100GWhtheyonlyhavetopay0.05cents/kWh.Thus,thefollowingindustriesareexemptedduetoconsumption:chemicals,paper,pharmaceuticals,non‐metallicminerals,ironandsteelandnon‐ferrousmetals.

AsaresultofahigherpercentageofREintheenergymixsincetheEnergiewende,wholesale power prices have fallen for large consumers eligible for exemptions,whereasinFranceandtheUKtheyhavesufferedincreases.

GRAPH54.Powerpricesforlargeindustrialconsumers(0.5–2GWh/year)beforetaxes(cents/kWh)


These exemptions include one known as Grünstromprivileg123 (green powerprivilege),introducedin2000bytheBMUintheEEG,whichremainedinforceuntilAugust2014,whentheEEGwasamended.Thisprivilegewasaneconomicincentivefordirectmarketingofpowerfromrenewables,wherebypowercompanieswereexemptedfrompayingtheEEG‐Umlageif50%ofthetotalbaseofsuppliedpowercamefromdomestically‐generatedRE.

Due to the use of this green power privilege, other expenditures would bechargeabletotheremainderofenergyconsumers.Asaresult,theBMUlimitedthereductionof the taxobligation for companiesusing thegreenpowerprivilege to€0.02/kWhinthe2012EEG.Atthesametimeatleast20%ofpowermustcomefromwindandphotovoltaicsystems.

Inadditiontotheseexemptions,therearealsomarketandmanagementbonusesinwhichthecostiseconomicallyrewarded,aspreviouslyexplained,whichthereforecontributetoareductionincosts.

Thanks to these exemptions, companies have been able to maintain theirinternationalcompetitiveness.However,asaresult,otherconsumerspayahigherfee,sinceitisnecessarytocoverthetotalcosts.Thishascausedprotestsnotonly

123(BSWSolar,2014)(GrundGrün,2015)(Schwarz,2014)


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insideGermany,butalsoabroad.In2014theEuropeanCommission(EC)openedinvestigationsintotheindustrialexemptionsofthe2012EEG,todeterminewhethertheyconstitutedillegalstateassistance.

However,duetotheircharacteristics, theMittelstand124(GermanSMEs)havenotbenefited fromexemptionsandarepaying thehigh financingcostsof theenergytransition.Thissituationharmsthecountry’sinternationalcompetitivenessandtheGermaneconomyasawhole,giventheimportanceoftheMittelstand.

As a result,manyGerman companies have decided to produce their ownpowerusingfuels(whosepriceiscurrentlylessvariablethanelectricity),thusprotectingthemselves against the EEG‐Umlage and fulfilling the requisites to receive thesubsidiessetoutintheEnergiewendeandreducingtheirpowerbillby50%.

Asfordomesticconsumers,thosethatareabletopurchasesolarpanelscanreducetheirelectricitybill,whilst the less fortunatepayagrowingEEG‐Umlageontheirpowerconsumption.

AnalysisofexemptionstotheEEG‐Umlagethereforeshowsthatitisthelow‐voltageclients,domesticandcommercialconsumers,whohavebornemostoftheseextracharges,sinceindustryhasbeenabletobenefitfromexemptions.

124TheGermaneconomyincludedalargeproportionofsmallandmedium‐sizedenterprises(definedbytheEUasfirmswithamaximumof500employeesandamaximumbalanceof€40m).ThissectionoftheGermaneconomyisknownasMittelstandandcoversmorethan99%ofGermancompanies.In2013SMEsaccountedfor52%ofthecountry’stotaleconomicproduction,37%ofthetotalbusinessvolume of German companies and 19% of total exports by German companies. TheMittelstandemploysapproximately15millionpeople,around60%ofallemployeessubjecttosocialsecuritycontributions.Incomparisontoothercountries,theGerman,Mittelstandfirmsareveryactiveintheindustrialsector(Rutten,2014).


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8. SOMEIMPLICATIONSANDDIFFICULTIES

Implementation of the objectives of the energy transition has numerousimplications,involvesseveralchallengesandisnotfreefromdifficulty.

Newtransmissionlines

OneofthekeyobjectivesforsuccessoftheEnergiewendeistobuildmorethan5,000kilometres of new power grids by 2022. The reason is that the largest powerconsumersareconcentratedinthesouthwhilemostoftherenewableenergyisinthenorth,thusrequiringconstructionofmajorNorth‐Southtransmissionlines.Itisalsoplannedtooptimize5,400kilometresoflines.

InMay2012,thegovernmentannouncedfiveplansforimprovingandextendingthetransmissiongrid,inordertoconnectthenewrenewablesandadjusttothechangesinvolvedinthenuclearclosure.

InDecemberthatyear,theGovernmentdecidedtoacceleratetheprograminordertobuild2,800kilometresofhighvoltageandtoachieveitinfouryears,insteadoften.Other sourcesmention different lengths (3,800 kilometres of new lines and4,400ofextensionsandimprovements),butinanycase,thenumbersgiveanideaoftheimportantimplicationsanddifficulties.

Constructionof“thegreatelectrichighway”,whichisalreadyunderway,involvesacorridorof800kilometresofextra‐highvoltagelinesknownasSueLlink.Theprojecthasa€13.5billionbudgetwhichhasbeenapprovedbytheGermangovernmentandisbeingmanagedbySocialDemocratViceChancellorandMinisterofEconomyandEnergySigmarGabriel(Sánchez,2014).


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FIGURE19.PlannedenlargementofpowergridsinGermany

Source:ENTSO‐Ein(GENI,2013)

As indicated, theproject(explainedabove)tocreatenewpower lines linkingthegreatindustrialenergyandpowerconsumersintheSouthwithrenewablecapacityin the coastal areas in the North (offshore wind energy) is of fundamentalimportance.However,thisprojectisdevelopingslowlyasmanyGermancitizensareopposedtotheideaofhavinghighvoltagelinesclosetotheirhomes.

AnumberofprotestshavebeenorganisedagainstplansbytheoperatorAmprion(involvedinSuedLink),andTenneThasalsoencounteredresistancetoexpansionofthe grid in the state of Schleswig‐Holstein. Indeed, ChristianDemocrat politicianHeinesGeissiersuggested“submittingtheprojecttoavotebeforecontinuingandassumingtheriskofhavingtostoptheprojectevery50kilometres”.However,theGermangovernmentcannotaffordasetbacktotheplannowthatthebudgetfortheproject(€13.5billion)hasbeenapproved(Sánchez,2014).


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FIGURE20.Currentstateoftheenlargementofthetransmissiongridattheendof2015

Source:(Bundesnetzagentur,2016)

Distributionanddistributedgeneration

Thedistributiongridhasgainedinimportanceinrecentyearsduetoanincreaseinthequantityoflow‐voltagepowergeneratedbygrid‐connectedphotovoltaicenergy.AbottleneckinthisinfrastructurecouldthereforelimitpossibledevelopmentoftheEnergiewende(Rutten,2014).

Furthermore, asmentioned, theEnergiewendealso includes anewenergypolicyparadigm,combininglargescalegenerationbythelargeenergycompanieswithalarge share of decentralised generation, owned by individuals and cooperatives.Although thisobjective isnot setout inany law, it forms thebasis forachievingpublicconsensusandensuringthelong‐termsuccessoftheEnergiewende.

An iconic example for the Energiewende in distributed generation is theSolarsiedlungneighbourhoodofVauban inFreiburg125 (seenext figure),which isshown in the figure below. In this neighbourhood, a) houses are built with lowenergyconsumptioncriteriausingwood,alow‐contaminatingmaterial;b)houseshave photovoltaic panels that produce energy which is sold to the grid if notconsumed;c)theuseofsharedcars,bicyclesandpublictransportispromotedintheneighbourhood,thusreducingthenumberofcarsby35%;d)thereisaCHPplantproducing the necessary energy for homes from wood chips and photovoltaic

125(Perezdans,2014)


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panels,thuscuttingCO2emissionsby60%.Sixty‐fivepercentoftheenergyproducedinthisplantcomesfromrenewables.

FIGURE21.HousesinVaubanneighbourhood(Freiburg,Germany)

Source:(Mejorarq,2015)

AnotherprojectisÖkocity,aGerman/Japanesescientificpartnershipwhichplanstoestablish an ecological urban planning code in the industrial metropolis ofKitakyushu (Japan),where construction of a residential area of 30 to 50 housesbeganin2006(Academic,2015).

Supplysecurity

Asregardssupplysecurity,theGermanpowersystemhastraditionallyworkedwithhigh security margins, including both a large surplus of generation supply andenough grid capacity. If thiswas notmaintained, theEnergiewende would be indanger.

Preliminary evidence suggests that neither the adequacy of resources nor thestabilityofgridshavesofarbeenaffectedbytheEnergiewende.Inanycase,ifthereissufficientpoliticalwillpowertoallowthecapacityofneighbouringcountriestobeviewed as secure for Germany, theEnergiewende can overcome this hurdle andprogresswithoutmaintainingconventionalmargins.

In their article, Kunz and Weigt126 show that even the process of nucleardismantling, due to be completed by 2022, will not cause a shortage providedcapacity is contracted with neighbouring countries for security (Austria andSwitzerland)andthat theregulator, theGermanFederalGridAgency(BNetzAorBundesnetzagentur)maintainsaconservativestance.

126(Kunz&Weigt,2014)


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ItisalsoimportanttonotethattheEnergiewendewillbeeffectivelysatisfactoryifits costs can be affordable and if the power supply is not put at risk, as VonHirschhausenexplainsinhisarticleTheGermanEnergiewende‐AnIntroduction.127

Energyefficiency

Asforthetargetsonenergyefficiency,Germanyisrunningbehindscheduleinitsplans,andas theenergyefficiencyratio(EER) indicates,partof theproblemlieswith inefficiencies in themarket (market failures, lack of information, irrationalbehaviour),mostlyinenergyefficiencyinbuildingswheretownsarenotapplyingmeasuresforimprovement,despitetheeconomicadvantagestheywouldoffer.

InGermanythefundsforpromotingmeasuresforimprovinginsulationandenergyefficiencyarelinkedtorevenuefromauctionsforemissionspermits,butwhenthesubsidies for these decrease, there is little margin for this area. This issue isdiscussed in the Fourth “Energy Transition”Monitoring Report of 2015 (BMWi,2015f).

Reservecapacityandmassintegrationofrenewables

PhotovoltaicandwindenergiesarethemainresourcesonwhichGermanyisbasingitsenergytransitioninrelationtothepowerindustry.

Infirstplace,thevariabilityinrenewableenergyproductionmakesstoragesystemsnecessary.AsNorbertRöttgen–MinisterfortheEnvironmentuntil2012–hassaid,storage technologies will be of key importance for the success of the energytransition.

The government has earmarked about €200m of the R&D budget for storagesystems, including different technologies (lithium batteries, heat pumps,decentralizedstoragesystems,thermalheatandhydrogenstorage).Damsarenotconsidered as a storage option as there are few suitable sites for this kind ofinfrastructureinGermantopography.Moreover,theGermanpublictendstoopposethiskindofactiononenvironmentalgrounds.

Another element that needs to be taken into account is therefore the reservecapacity. Asmentioned, the electricity produced from renewable energy sourcesdependsonclimateconditions(windandsunshine)andinordertopreventpowercutsduringdayswithlittlewindand/orsun,reservecapacityisneeded.

Electricity prices currently leave littlemargin for gas plants (the typical kind ofreserve plant) and therefore the private sector does not have enough economicincentivetofacilitateanincreaseinthisnecessaryreservecapacity.

Mass expansion of renewable energies such as photovoltaics and wind energy(whichdependonseasonsandclimateconditions),thereforeposesachallengeforthepolicyofincorporatingmorerenewableenergyintotheenergysystem.

127(VonHirschhausen,2014)


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Itwillalsobenecessarytoapplysmartsolutions,expandtheinfrastructurethroughdistribution and transmission grids, improve coordination with neighbouringcountriesanddistributeequallythecostsoftheenergytransformation.

The latest amendment to the EEG in 2014 seeks to ensure better control of theexpansionobjectivesso thatcostsarebetterdistributedandtocontribute to theincorporation of renewable energies onto the market with greater efficiencythroughtheobligationfordirectmarketing.

Socialcostsandbenefits

Costscome fromdifferent “fronts”; thecostof therenewables themselves,of thetransmissiongrids,ofnuclearclosureandofnewcoalplants.Theamountinvolvedvariesdependingonthesources,whichviewthesituationwithvaryingdegreesofoptimism; according to those who defend the transition and establish policyobjectives,thecostsarejustifiedinthelargeterm.

Energycostscancometobillionsofeuroseveryyear.TheMinistryofEnvironmentbasesitsargumentsonacomparisonofthecostsofthepresentpowersystemwithonebasedonrenewables,whichwouldbecheaperby2025,aswellastheworkofVonHirschhausen,C.(2014),whichcomparestheperiodsbefore2010,2011‐2020,2021‐2030and2031‐2040.

Another issue is the sharingof energy costs. The interests ofmany stakeholdersmustbetakenintoaccount,includingenergysuppliers,128gridoperators,theenergysupplyindustryandinvestors,aswellasthemanyenergyconsumers,includingthelargeenergyconsumerswhoareprotectedthroughexemptions.129

SocialbenefitsareconsideredasoneofthemainargumentsinfavourofRE.In2012,theGermanMinisterofEnvironmentannouncedthat380,000jobshadbeencreatedintherenewableenergiessector.However,therealfigureappearstobelower,ataround320,000.

Thus,thebenefitsappeartofilterdownintotherenewablessector,intheformofjob creation and an area of industry that will be addressed below (as will theincreaseinthecostofenergy).

Nonetheless,anawarenessofthecostoftheGermantariffssystem(FiT)hasdriventheGovernment to reduce tariffs forsolarproductionby30%,which–combinedwithstrongcompetitionfromAsianproducersofsolarpanels–hasledtoareversalofjobcreation.

Afinalconsideration

Toconcludethissection,wecanseethatthefirstphaseoftheenergytransitionhasdevelopedstrongly,althoughitisequallytruethatafterthisinitialsuccess,Germany

128AsseeninChapter4,theeconomicimpactontraditionalcompanieshasbeendevastating.129Asdiscussed,theGermangovernment’saimisforGermanindustry–thefifthlargestintheworld–tocontinuetobecompetitiveinthecaseofenergy‐intensivecompanies(DENA,2014).


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now needs to resolve several important issues. In 2012, Matthias Kurth, thenPresident of the German Agency of Industrial Networks (Bundesnetzagentur)recognized130 that it was “premature to celebrate the event”. Therefore, we canconclude that the Energiewende, which might appear to be a temporaryphenomenon, is a plan that is being consolidated and is working but whosedevelopmentisnotfreefromhighcostsandnumerousdifficulties.

130(FrankfurterAllgemeine,2012)


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IV.INDUSTRY

9. INDUSTRIALPOLICY

In her first television interview following her re‐election in December 2011,ChancellorMerkelsaid131thatforher“themostpressingproblemisdesignoftheenergyrevolution,whichishighlyimportantsincethefutureofemploymentandofGermanyasabusinesslocation,dependsonit”.ThisreflectsGermany’sconcerntoimplementawell‐designedindustrialpolicythatwilladapttothecountry’senergytransition.

ForabetterunderstandingofindustrialpolicyinGermany,itneedstobeexaminedinthecontextoftheguidelinesandproposalsofEuropeanindustrialpolicy.Thefirstsectionofthisblockwillthereforeaddressthisaspect,beforemovingontoaspecificexaminationoftheGermansituation.

9.1. ThepositionofEuropeanindustrialpolicy

Article 173 of the Treaty on the Functioning of the European Union (TFEU)establishesthejuridicalbasisforEuropeanUnionindustrialpolicy,whichseekstoimprovethecompetitivenessoftheEuropeanindustry,mostlythroughtheadoptionofmeasurescoveringseveralsectors.Theindustrialpolicyismainlyatransversalonethataffectsmanyotherpolicyareas,suchastrade,theinternalmarket,researchandinnovation,employmentandenvironmentalprotection(BMWi,2015b).

Since2002,theEuropeanCommissionhaspublishedanumberofcommunicationsonEuropean industrialpolicy,settingoutkeyaction linesandaspecificworkingprogramme for this field. In itscommunicationof January2014, theCommissionannounced that it would focus on presenting the domestic market in a moreattractivewayandonpromotinginnovation.

Atthesametime,theEuropeanCommissionalsosupportssmallandmedium‐sizedenterprises, facilitating their access to financing. It has likewise committed toassistingEuropeancompanies,mainlythroughthenegotiationofanumberoffreetrade areas (FTAs) with third countries and the promotion of internationalstandards.

To judge by what has happened in industrial policy in recent years, one mayconcludethattheEuropeanindustrialsectorwillonlyremainstrongifresponsiblepoliticians,bothataEuropeanlevelandintheindividualmemberstates,implementa coherent overall strategy. Andwhenever political decisions are taken in otherfields, such as energy or environmental policy, there must be an attempt tostrengthenindustrialcompetitivenessandavoidanexcessiveregulatoryburdenonindustry. Key objectives therefore include better energy efficiency,environmentally‐sustainableproductsandmoreefficientproductionprocesses.

131(Waterfield,2014)


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In2012,theEuropeanCommissionpresentedastrategyforasustainableeconomyinEurope,whichpursuesthepromotionofagreaterandmoresustainableuseofrenewable resources. One of the main challenges in coming years will be thedevelopmentofasustainableenergystrategyandanefficientindustrialstrategyintheuseofresources,whichdoesnotinvolveanexcessiveburdenforconsumersorbusiness(BMWi,2015b).

TheEUhassetatargetofa20%contributiontoGDPfromindustryby2020.ButbeyonditscontributiontoGDP,therelevanceoftheindustrycanbestbeseenifonetakesintoaccountthefactthatmorethan80%ofEuropeanexportsandprivateRDItakeplaceinthissector.

Inordertolaythefoundationsforgrowthandmodernizationafterthecrisis, theEuropeanCommission,inoneofthekeymessagesofitsCommunicationofJanuary2014,calledonmemberstatestorecognizetheimportanceofindustryasacentralelementforjobcreation,growthandtheincorporationofindustrialcompetitivenessinallpoliticalfields.

Thenewinitiativeonindustrialpolicycentresonspecificmeasuresforimprovingtheapplicationofindustrialpolicytotheestablishedpriorities,inordertodevelopindustrialtransformation.Amongthemainprioritiesproposed,severalarerelatedtoenergy.

ThefirstwasaninvitationbytheCommissiontotheCouncilandtheParliamenttoadopt proposals on energy, transport, aerospace and digital communicationnetworks, as well as applying and enforcing legislation for creating the internalmarket.132

Another proposal was that industrial modernization must be pursued throughinvestmentininnovation,efficiencyresources,newtechnologies,skillsandaccesstofinancing.

Theyalsoadvocate thepromotionofaEurope that ismore focusedonbusiness,throughactionsthataredesignedtosimplifythelegislativeframeworkandimproveefficiencyinthepublicadministrationatcommunity,nationalandregionallevels.

TheyalsomentiontheupdatingoftheSmallBusinessesActandstrengtheningoftheEntrepreneurshipActionPlanandfacilitationofaccesstothirdcountries’marketsthroughharmonizationofinternationalstandards,openpubliccontracting,patentsprotectionandeconomicdiplomacy.

132In2006theEuropeanCommissionrevealedtheexistenceofirregularitiesviolatingtheprinciplesoftheliberalizationtreatyforgasandpowermarketsinEurope,andwarnedthatsanctionsmightbeapplied(EuropeanCommission,2007).Thisledin2007tothelaunchofthe“thirdpackage”ofEUenergypolicymeasures,approved in2009,whichhad importantconsequences for thevertically‐integratedstructuresofenergycompaniesinsomecountries.


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Finally they consider smart specialisation as a means of guaranteeing betterintegrationofindustrialandregionalpolicies.133

9.2. IndustrialpolicyinGermany

AftertheSecondWorldWar,GermanybecameoneofthemainpromotersofthefreemarketeconomyinEurope.InGermany,thewordthatisusedtorefertoindustrialpolicyisStrukturpolitik.However,forthe100yearsbeforethewar,Germanywasagreatinterventionistandcentraliststate.StateinterventionandrestrictionsonfreecompetitionbeganinBismarck’sGermanyandendedin1930.TheGermanCustomsUnion or Zollverein, established in 1834 under Prussian mandate began theprocess134 and also enabled the construction of a strong industrial economy(Andreosso&Jacobson,2005).

Until 1960, German industrial policy –the Strukturpolitik– was basicallyinterventionist.Thereafter, thegovernmentplayedonlyasupportingrole,whosemain purpose was to increase productivity and promote innovation andtechnologicaldevelopment.Thiswasmadepossiblebyanumberoffactors:a)thefederal structure of the country, which gives the Länder the responsibility foreducation and professional formation; b) the politicians of the newLänder havepursued greater decentralization, increasing economic activity and promoting amorepositiveandactiveindustrialpolicyaimedatrescuingtherestofthepubliccompanies; c) cooperation among the different partners (government, industry,research centres, universities, trade unions and large banks) in design andimplementation of the policy. The role of the banking system in particular wascrucial asefficiency in thebanksystemmeant that financingassistance couldbeextended tomanymore industrial sectors, including nuclear plants, aeronautics,computingandshipbuilding.AsaresultoftheGermanindustries’predominanceintechnologically‐oriented industries, a close relationship was forged betweeneducationandtrainingontheonehand,andindustryontheother.

TheauthorscitedaboveseetheStrukturpolitikasgenerallybeingmorealaissez‐fairthan an interventionist stance, albeit with some relatively limited governmentalassistance,whichhassoughttoleavemostofthedecisionstomarketforces,withtheexceptionofthesocialmarket(Andreosso&Jacobson,2005).

TheGermanGovernmentiscurrentlytryingtomakeenergyandindustrialpoliciesconverge.Inthisway,itseekstosupporttheEnergiewendewithanindustrialpolicysince,apartfromtheimpactthattheseenergypolicymeasuresmighthaveonthecompetitiveness of energy inputs in the industrial fabric, the change mightconsolidate advanced industrial sectors based on the development of energytechnologieswithhighaddedvalue.Aswellasreinventingtheindustryassociated

133Forananalysisofsmartspecializationandenergy,industryandmining,seethearticlebyÁlvarez,E.,Energía,industriayminería:retosyestrategiasterritoriales(2016).134TheZollvereinremovedcustomsdutiesamongmembersofGermanConfederation,exceptAustria.


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with the energy sector, this would facilitate the necessary tools for preventingchangefromhavinganegativeimpactontheenergycostoftheindustry.

The German energy transition has been planned taking into account a businessfabricthatwillsupportthisprocessandtocreatesuitableconditionstofacilitatethecompetitiveness of an industrywith an innovative sector aswell as othermorematuresegments.

Withinthehighly‐integratedGermansupplychainsandindustrialclusters,energyintensivecompaniesandthosethatdonothavehighconsumptionareintrinsicallyconnected,givingGermanindustryacompetitiveadvantageataninternationalleveland guaranteeing high quality products. These characteristics make theEnergiewende a very important development for the country’s entire industrialsector,creatingasmanychallengesasopportunities(Rutten,2014).

The country’s industry is locatedmainly in the south, throughout the Länder ofBaden‐WürttembergandBavaria,asdiscussedabove(9).About29%oftheGermanpopulationliveinthisareaandtogetherthetwostatesaccountfornearly30%oftotalGermanenergyconsumption.Atthesametime,industryrepresentsabout55%and 60% of the energy consumption of the states of Bavaria and Baden‐Württemberg respectively. The chemical and pharmaceutical sectors are veryimportant inBavaria,while the automotive industry is locatedmainly inBaden‐Württemberg.

Nuclearenergyhastraditionallybeen–andstillis–animportantsourceofelectricitygeneration in the South. Of the eight135 nuclear reactors still in operation in thecountry, five are located in these two southern states. The combined powergenerationof the twostatesmeetsabout40%of their totalpowerconsumption.Therefore, in the industrial heartland of Germany there will be no greatconsequencesforsupplysecurityresultingfromtheAtomausstieg(nuclearenergyswitch‐off)(Rutten,2014).

German industry tends to focusmore on quality than on price, a feature that iscloselyrelatedtohavinghadastrongcurrency.Historically,asaresultofthestronginternational position of the Deutsche Mark, the German industrial sector waslimitedinitscapacitytousedevaluationtoimproveinternationalcompetitiveness.Germanindustrythereforehadtofocusonquality.WithregardtotheEnergiewendeandtheriseinelectricityprices,thismeansthatincreasesinproductioncosts,asaresultofgreaterenergycosts,arenotnecessarilyleadingtoareductionindemandforGermanproducts.Thisistheduetothefactthatdemandelasticityisgenerallylowerinmarketswithahighmarginandhigheraddedvaluethaninthosewithalowmargin.Nevertheless,high‐volumemarketsareexamplesof competitivenessandsalesbasedonlowprices(Rutten,2014).

135AlthoughatthestartoftheAtomausstiegprogramme(nuclearenergyabandonment)therewereninenuclearreactorsinoperation,atthetimeofwritingthisnumberhadfallentoeight,withtheGrafenrheinfeldplantclosinginJune2015.


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MostoftheGermanautomotiveindustry,knowntheworldoverforbrandssuchasMercedes‐Benz, Audi, BMW and Porsche, does not receive exemptions from theEEG‐Umlage.However, the industryusesmanyhigh‐energy‐consumingproducts,suchasaluminium,soultimatelytheyreapthebenefitsoftheexemptionsreceivedbythecompanies,asexplainedinthesectionabove.TheEEG‐Umlage representsmorethanathirdoftheelectricitybilloftheGermanautomotiveindustry.Itsmainconcern regarding theEnergiewende is international competitiveness, due to thefactthatitssalesshareishigherabroadthaninsidethecountry.Despitehighenergypricesandthefinancialcrisis,however,theGermanautomotiveindustryhasseenanincreaseinthevalueofexportsinrecentyears.Thesecompaniesfocusonaddedvalueratherthanprices,sohavingenergypricesabovetheEuropeanaveragedoesnotnecessarilyunderminetheirexportcapacity.

“Green”technologycompaniesarealsowellrepresentedamongsttheMittelstandanditisherethatGermany’s“green”industrialbasecanbefound.

Thereisalreadyasignificantmarketforproductsthatincreaseenergyefficiency,anespeciallyimportantfeatureaccordingtoastudybyRolandBerger,136whichfoundthatthemarketforenergyefficiencyproductswillcontinuetogrow,withvolumesdoublingbetween2005and2020to€450billion.Itisthereforenotsurprisingthatthere is growing investment in the development of this sector, where Germanparticipation,at20%,comessecondonlytotheUS(24%).

Thehighproportionofemploymentinhigh‐techmanagementsectorsisoneofthecharacteristics of the German economy, which goes hand in hand with GermangovernmentR&Dbudgets:2.02%oftotalgovernmentspendingin2012.ThisisalsoreflectedinthenumberofpatentapplicationsfiledinGermany,whichaccountedforalmosthalfofallpatentapplicationsintheEU‐28in2012(Rutten,2014).

Germanystandsasagloballeaderinrenewabletechnologiesanditwouldnothaveattained this positionwithout itsmarket policies and the support of the federalgovernment.Indeed,itisaleaderbothinphotovoltaicsolarenergyandwindenergy,albeitthetwocasesdiffer.

TheGermansolarphotovoltaicindustryincreasedrapidlyinthelastdecade,butisnow encountering strong competition in Asia, particularly in China. This hasrecently ledtoatradedisputebetweentheEUandChinaonexportsofsubsidedsolar panels and presumed dumping137 practices, leading to the imposition ofimport duties in the EU on Chinese panels. Nevertheless, most photovoltaicproductionhasbeenexportedoutofGermany.MostGermancompaniescurrentlyinvolvedinthephotovoltaicbusinessnolongerproducemodules,andaremainlyfittersandsuppliers.Thismaysignalashiftfrommanufacturingtoservicesandcan

136(RolandBerger,2011)137Dumpingcanbedefined,inthiscontext,asthecommercialpractiseofsellingaproductbelowitsnormalpriceorevenbelowitsproductioncostinordertoeliminatecompetitorsandtakeoverthemarket.


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be attributed to the high level of photovoltaic installed capacity in Germany.However,Germanyisagloballeaderinphotovoltaicequipmentmanufactureandinsolarsystemssuchaspowerinverters,ratherthanbeinganimportantproducerofpanelsthemselves.ThisissimilartothestrengtheningoftheMittelstandinelectricengineering(Rutten,2014).

TheGermanwindpowerindustrycurrentlyenjoysastrongpositionontheglobalstage;itisamongtheworld’sleadinginnovatorsandisexpectedtoholdontothispositionincomingyears.TogetherwithDenmarkandtheUK,Germanyleadstheoffshorewindenergysector.

Currentpolicieshaveledtoanenlargementofinstalledcapacityinwindenergyanda recent emphasis on offshore projects. Nordensvärd, J et al.138 argue that thecurrentGermanwindenergypolicyfacestwofinancingdilemmas:firstlyithastoincreaseenergycostsfortheconsumer,sincefeed‐intariffsarefinancedwithariseinelectricityprices;andsecondly,energycostshavedecreasedforenergyintensiveindustriesthroughexemptions.

Researchinvolvingin‐depthinterviewswithwind‐energyexperts139concludedthatwhile the share of wind energy has increased rapidly, feed‐in tariffs and otherpoliciesandincentivesfordecarbonizinghavenotyetprovedsufficienttoachieveasocio‐technologicaltransitioninGermany(Nordensvärd&Urban,2015).

Thestudyfoundthatfeed‐intariffsforwindturbineprojectsdivertattentionandfinancingfromothernecessaryinnovationprojects,suchasgridsystems.ThereportthereforesuggeststhatGermanwindenergypolicyneedstodevelopnewfinancingandsupportmethodsandinnovativeincentivesforthepromotionofwindenergyandasuitablegridstructureforthefuture.ItisalsoimportantthattheconsumerdoesnotbearthebruntoftheEnergiewende;instead,theburdenshouldbesharedoutmoreevenlyamongindustriesandthestate.

BeforetheEnergiewende,thepowermixinGermanyhadalreadyexperiencedotherenergy transitions. As is currently the case with the Energiewende, Germanindustrialpolicywasdecisiveinthisdevelopment,whichwascloselyrelatedtothecountry’senergypolicy.ThusonemightsaythatGermanyfollowsatrendoftreatingindustrialandenergypoliciesasone(Rutten,2014).

Whenitcomestodealingwithenergytransitions,theGermangovernmentclearlyusesitspowerstoinfluencethepossibleresults,takingintoaccountdifferentfactors

138(Nordensvärd&Urban,2015)139Theseexpertsincludeenergycompanies,businessassociations,researchorganizationsandthegovernment:AREVA (energy company),BMU (GermanFederalMinistry forEnvironment,NatureProtection,ConstructionandNuclearSecurity),BMWi(GermanFederalMinistryforEconomyandEnergy)BoschRexroth(windcomponentssupply firm),CEwind(researchorganization)Enercon(wind energy company), EWE (energy company), ForWind (research organization), Greenpeace(NGO), IOEW (research organization), REpower (wind energy company), Vattenfall (energycompany),ElectricSystemsVDMA(businessassociation),Vensys(windenergycompany)andVestas(windenergycompany).


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suchasenergyindependence,affordabilityandthenation’selectorate.Aswithcoaland nuclear energy, the government’s support for renewable energies has twointernalandexternalroots.

ThestartoftheEnergiewendecoincidedwiththatoftheGermangreenindustry.OnedemonstrationofthecloserelationshipbetweenGermanindustryandthecountry’senergy policy was the announcement by Siemens in 2011 that it was to totallyabandon the nuclear industry. This was the same year that Chancellor Merkeldecided to seep up the Atomausstieg. At the same time Siemens also created aseparatedivisionforitswindenergyactivities,SiemensWindPower,whichisnowaEuropeanleaderinthemanufactureofoffshorewindturbines.Therefore,inorderto understand the causes of the Energiewende, one needs to see it within theframeworkofGermanindustrialpolicy.Andinpredictinghowitmightdevelop,itisimportanttoconsiderthecountry’svariousindustrialinterests(Rutten,2014).

Asregardsemployment,theincreaseinrenewableenergieshasalsoled,directlyorindirectly,toalossinothersectorssuchastraditionalpublicservicesandthecoalandnuclearindustry.Theneteffectonthecountry’semploymentcannotthereforebejudgedyet.

ThesameistrueoftheoveralleffectoftheEnergiewendeonGermanindustry.TheGermanindustrialbasisisverydiverseandtheeffectsoftheenergytransitionmaytake several different forms, benefiting some agents and harming others. Whatseemsclear140isthatGermany’sindustrialinterestsweretakenintoaccountwhentheEnergiewendewaslaunchedandtheemergenceofgreentechnologycompanieswasstronglystimulatedbythecreationofafavourableinvestmentframework.

Thereforetheexemptionsofferedtoenergy‐intensiveindustries,togetherwiththestrong German influence on new European Commission directives concerningpublic support for environmental protection and energy, reflect the close tiesbetweenGermanindustrialandenergypolicies,andtheirinfluenceintheEU.

OnegoodexampleofthisinfluenceofGermanindustrialpolicyisthecreationoftheInternational Renewable Energy Agency (IRENA). In 2011, this institution,promoted by the United Nations and particularly the European Union, chose tolocateitsInnovationandTechnologyCentre(IITC)intheGermancityofBonn,animportant achievement by the German government. IRENA manages importantfunds for renewable energy in developing countries,141 giving some idea of theimportance that Germany gives to its industry and the prospects of exportingtechnologyandknowledgetoothercountries.

140(Rutten,2014)141AccordingtoIRENA,inordertodoubletheshareofrenewableenergies,itwillbenecessaryfortheinternationalcommunitytoinvest$770billionperyearto2030.Thiseffort,accordingtheagency,wouldresultinfifteen‐timesgreatereconomicsavings,asitwouldmeancutsinexpenditurerelatedtoatmosphericpollutionandclimatechange,aswellasjobcreation(DW,2016).


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Theselinksarenotnew;somepartsoftheGermanindustrialsectoralreadyreceivedpreferential treatmentwhen the countrywas facingprevious energy transitions.Furthermore, in former periods of industrial development, the energy, coal andnuclearindustrieswereacomprehensivepartoftheeconomictransformation.


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10. THERENEWABLES‐RELATEDINDUSTRY

BeforegoingontoanalyseGermany’sbusinessstructureintherenewableenergysector, it is importanttounderlinethestrong investmentmadeinthecountrytodate in this kind of energy. As can be seen in the graph below, of themain EUcountries,Germanyistheonethathasinvestedmost142insolarphotovoltaicsandonshoreandoffshorewindenergy(2014figures).

Indeed,asthegraphbelowshows,in2014,itinvested143€18.9billioninbuildingrenewableenergyplantsorinstallations.

GRAPH55.Investmentinthebuildingofrenewableenergyplantsin2014inGermany(€bn)144

Source:(BMWi,2015a)

Withtheseinvestments,Germanyhasmanagedtoincreaseitsinstalledcapacity145bynearly60%,asdiscussedinChapter4.

Furthermore,asmentionedatthebeginningofthisdocument,therenewableenergysectorhadnearly400,000employees146attheendof2014,withamajorincreaseinemploymentsince2005,asthegraphbelowshows.

142(WattsUpWithThat?,2015)143Theeconomicfiguresusedthroughoutthisdocumentshouldbetakenasillustrative,giventheshortageofofficialdataoninvestment.144Throughoutthisdocument,abillion(abbreviatedasbn)istakentomean109(1,000,000,000).145(Rutten,2014)(BMWi,2015a)146(DENA,2014)


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GRAPH56.JobsinGermanyinenergysectors

Source:elaboratedfromBMUandBMWIin(Morris&Pehnt,2012)

10.1. Windenergy

Windenergyplaysafundamentalroleinthetransitionoftheenergysystem,aswehaveseeninChapters4and5.

In2014,Germanyhadinstalledwindcapacityof36.5GW,147makingitthecountrywith the highest installed wind capacity in Europe and putting it in third placeworldwide,justbehindChinaandtheUS(REVE,2014a).In2015thefigurereached39.2GW,withthecountryretainingitspositioninEuropeandworldwide(AgenturfürErneuerbareEnergiene.V.,2015).

TheGermanWindEnergyAssociation(BWE)estimatesthattheindustrycurrentlyexportsbetween65and70%ofallcomponentsproduced.

WewillnowexaminethevaluechainandthemainGermanwind‐energyfirms.

Valuechain

Thewindenergyvaluechain148canbedescribedasfollows:a)companiesthatareinstallers or promoters of projects and installations for third partners149; b)manufactureof rotorblades,where thewindenergy is converted intoa rotatingmovement; c)manufactureof the shaft, responsible for transmitting the rotatingmovement; d) manufacture of the gear casing or multipliers, responsible forchanging the spin frequency to another, lower or greater, depending oncircumstances, in order to give the generator the right strength to work; e)manufacture of the generator, where the mechanical movement of the rotor istransformedintoelectricalenergy;f)manufactureofotherbasiccomponentsthatarerequiredforproperandefficientfunctioningofthewindturbine,inaccordancewiththequalityoftheelectricityservice;g)manufactureoftheelectroniccontroller,

147Between2013and2014,Germanyincreaseditscapacityby1.8GW(REVE,2014a).148(GorozarriJiménez,2012)149Theseincludecompaniesofveryvaryingsizeandcharacteristics.


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whichallowstherotorbladestobeorientedproperly.Italsohaltstherotorintheevent of any contingency such as excesswind speed or overheating of thewindturbine; h) manufacture of the refrigeration unit, responsible for keeping thegeneratorwithin suitable temperature limits; i)manufacture of the anemometerandweather‐vane,inordertocalculatethewindspeedanddirectionrespectively;j)manufactureandassemblyoftheenginecasing;k)manufactureofthetower;l)manufacture of the converter, for transforming the wind into electricity; m)foundationofthegenerator150;n)distributionandwholesalesaleofequipment;o)importersofotherkindofcomponents.

ThemainGermanwindenergycompaniesidentifiedattheendofthissectionallhaveaveryintegratedmanufactureprocessandperformalmostallthetasksinthewindturbinevaluechain(design,rotor,blades,enginecasing,tower,etc.)throughothercompaniesintheindustry.Theythereforecannotbeclassifiedaccordingtothedifferentprocessesinthevaluechainsincetheyparticipateinmostofthem.Aswecansee in thenextsubsection, this isnot thecase in thephotovoltaicenergysector.

Below,welistsomeGermancompaniesclassifiedbyelementsor“position”inthevalue chain of theGermanwindpower industry. As can be seen, the “elements”identifieddonotalwayscoincidewiththelistofphasesgivenabove.

150Inthecaseofoffshorewindenergy,thegeneratorismooredusingabaseknownasa“jacket”,alattice‐likestructuresecuredtotheseabed(Losada,2010).


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TABLE24.Germancompaniesinthewindenergyvaluechain

VALUECHAIN COMPANY

DesigndevelopmentEcofinConceptGmbHEnergyGmbHGEO‐NETUmweltconsultingGmbH

RotorandbladesBayWar.e.renewableenergyBajuenergyGmbHLTBHochsauerlandGmbH

Tower

cp.maxRotortechnikGmbH&Co.KGHailoWindSystemsGmbH&Co.KGRENERTECGmbHRoSchIndustrieserviceGmbH

Enginecasing

AVANTISEnergyGroupFWTenergyGmbH&Co.KGKenersysGmbHVensysEnergyAG

Converterandcomponents AvailonGmbHpsmGmbH&Co.KG

FoundationRotorControlGmbHSchützGmbH&Co.KGaA

Connection ZOPFEnergieanlagenGmbH

Control,remotecontrolandmaintenance

ABOWindAGAvailonGmbHC&DÖlserviceGmbHDeutscheWindtechnikAGDirkHansenElektro‐ &WindtechnikGmbHEEGService&TechnikGmbHENERTRAGServiceGmbHJuwiAGMMM‐WindtechnikGmbHN.T.E.S.GmbHWINDKRAFTSERVICEUTW‐DienstleistungsGmbH


German manufacturers have extensive experience in all the different types ofapplication mentioned above. This includes, for example, the manufacture andassembly of turnkey wind installations, as well as the production of individualcomponentsanddevices,suchasgenerators,gearsandrotorblades,andalsotheirspareparts(DENA,2015).

Apartfrommanufacturersspecializinginwindenergyinstallations,manymedium‐sized traditionalmachinery constructorshave creatednewbusinessareas in theGermanwindindustry.Tubularsteeltowers,concretefoundationandcastpiecesareallrequiredforbuildingwind‐energyinstallations,aswellaslocationstudies,authorisationsandtypetests.AllthevaluecreationisdesignedinGermany:fromplanningandprojectdevelopmenttoconstructionandoperationofthefacility.

Inthecaseofoffshorewindenergy,Germancompanieshaveextensiveexperiencein the installation process, aswell as the service,maintenance and occupationalsafety areas. One feature distinguishing Germany from other countries with asignificantoffshorecapacityisthatGermanoffshorewindfarmsareinstalledatalargedistancefromthecoastandatgreatdepth.


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Germanmanufacturersofsmallwindturbineshaveachievedgrowingproductionprofessionalization in recent years. Many types of facility built by Germanmanufacturers–mainlyintherangefrom1to20kWm–havegainedanexcellentpositiononthesmallwindturbinesmarket(DENA,2015).

Itisimportanttonotethatthedifferentprocessesinthewindenergyvaluechainhaveasignificantimpactonthefinalprice.Forexample,investmentcosts,includingauxiliaryexpensesforfoundations,gridconnection,etc.,havea30%margin,sothefinalproductpricevariesconsiderably(GorozarriJiménez,2012).

MainGermanwindenergycompanies

German wind energy has created an ad hoc industry. Four German companies(Enercon,Senvion,NordexandSiemens)control68.9%oftheGermanmarket,whileSiemenshasanalmost10%shareoftheglobalwindturbinemarket151andEnercon7.8%.

GRAPH57.MarketshareforwindenergyinGermany(%)

Source:Ownelaborationfrom(ENERCON,2015)

The following table offers key information of interest on German wind energycompanies.

151(ENERCON,2015)


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TABLE25.MainGermanwindenergycompanies

Companyname ActivityPlace

(Germany)Data

ENERCON

Manufacture,sale,installationandmaintenanceofwind

turbinesAurich

16,000employees€4bnturnover

32.9GWinstalled/22,000windturbines

NordexSE

Manufactureofwindturbines Hamburg2500employees€1.8bnturnover10.7GWinstalled

SenvionSE

Manufactureofwindturbines Hamburg

3500employees€1.93billionturnover

6.15GWinstalled

SiemensAG

ManufactureofwindturbinesSectors:industrial,energyhealth,infrastructure,

electricalappliances,etc.

Berlin,MunichandErlangen

359.000employees€71.92billionturnover

23GWinstalled


10.2. Solarphotovoltaics

Germany is theworld leader in solar energy,with 38.2GWof installed capacity(2015figures),aheadofChina(28.2GW)andJapan(23.3GW)(Martíl,2015).

TheGermanSolarAssociation(BSWorBundesnetzagentur)estimatesthatexportsaccountedfor60%ofproductionbytheGermanphotovoltaicindustryin2012(ascomparedto14%in2004)andthetargetistoreach80%by2020.

In the next section, we shall examine the value chain, followed by the principalGermancompaniesinthephotovoltaicindustry.

Valuechain

Thesolarenergyvaluechain152canbedescribedasfollows:a)transformationandproductionofrawmaterial:extractionandtransformationofsilicasand;b)fittersordeveloperspromotingthird‐partyprojectsandinstallations153;c)productionofwafersandingotsofsolargradepolysilicon;d)manufactureofphotovoltaiccells;e)manufacture of modules. Cells can be assembled in modules or manufactureddirectly; f) manufacture of other components such as cables, solar inverters,accumulators; g) distribution and wholesale marketing; h) imports of otherproducts.

152(GorozarriJiménez,2012)153Thecompaniesvarygreatlyinsizeandcharacteristics.


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FIGURE22.Valuechainofthesolarphotovoltaicsector

Source:Ownelaborationfrom(Serrano,2012)

The listbelowshowssomeof theGermancompanies, classifiedaccording to theproductionprocesstheyperforminthevaluechainofthephotovoltaicsolarsectorinGermany.Onceagain,itisworthnotingthattheclassificationinthetableperfectlymatchesthebreakdowngivenabove.


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TABLE26.Germancompaniesinthevaluechainofthephotovoltaicsolarenergy

VALUECHAIN COMPANY

Projectdevelopment IBCSOLARAG

SiliconSchmidSiliconTechnologyGmbHSolarWorldAG

Wafers MolaSolaireProduktionsGmbH

CellsSCHOTTSolarAGSollandSolarCellsGmbHSystaicAG

Modules

AleosolarAGAlfaSolarVertriebsgesellschaftGmbHALGATECSolarwerkeBrandenburgGmbHArinnaEnergyGmbHasolaTechnnologiesGmbHCentrosolarGroupAGHeckertSolarGmbHSolar‐FabrikAGSolarnovaDeutschlandGmbHSOLARWATTAGSunovationGmbHSunWareSolartechnikProduktionsGmbH&Co.KGWebastoSolarGmbHWulfmeierSolarGmbH

Totalintegration(wafers,cellsandmodules)

BoschSolarEnergyServicesConergyGmbHRenusolGmbHSolarWorldAG

Concentrationphotovoltaics(CPV)

ConcentrixSolarGmbHRitterEnergie‐undUmwelttechnikGmbH&Co.KGSolarTecInternationalAG

Thinsheetsolarcells

ANTECSolarGmbHAvancisGmbH

AZURSPACESolarPowerGmbHCentrosolarGroupAGCISSolartechnikGmbH&Co.KGCTSTandemSolarGmbHMasdarPVGmbH

PVflexSolarGmbHHerstellervonSolarzellenundSolarmodulen

SolarionAG

Photovoltaictechnologyandservices(powerinverters,

batteries,etc.)

DeutscheEnergieversorgungGmbHFENECONGmbH&Co.KG

GrammerSolarGmbH

HeliatekGmbH

HelioSolarGmbH

KOSTALSolarElectricGmbH

SMASolarTechnologyAG

SolarzentrumAllgäue.KGmbH&Co.KG

Source:Ownelaborationfrom(Pingarrón,2011)

Crystalline and thin sheet panels and high efficiency inverters are togetherconsidered to be the flagship of the German photovoltaic industry. Facilities for


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producingsilicon,wafersandcellsalsomeetthestrictestrequirementsandtheirproductsareavailableworldwide.Germanproducersof softwareandmeasuringtechniques,panelsuppliers,systemintegrators,projectdesignersanddevelopers,providers of operating and maintenance services, as well as research institutesoptimallyextendthephotovoltaictechnologyvaluechain(DENA,2015).

According toDENA, 2015,German companies in the photovoltaic sector operateworldwideatdifferentpointsinthevaluechainandenjoyanexcellentreputationduetotheirextensiveexperience,extraordinaryserviceandhighqualitystandards.TheGermanPVsectorexportedabout65%ofoutputin2013.Attheendof2013,the industryhadabout60,000 full‐timeemployees in about5,000 companies, ofwhich2000weremanufacturersofcells,panelsandotherphotovoltaiccomponentswithdemandingqualitystandards.

German companies are world leaders in the development and research of newphotovoltaic technologies. At the same time, German research institutes areintroducing internationally‐accepted quality standards. Solar panel factoriesthroughouttheworlduseequipmentandmachinesdesignedandmanufacturedbyGerman companies. The industry offers advanced solutions in systematicintegrationofphotovoltaicsinpowergridsforthemostdiverseenergysources.


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MainGermanphotovoltaicenergycompanies

ThetablebelowshowstheleadingcompaniesoperatingintheGermanphotovoltaicenergyindustry.

TABLE27.MainGermanphotovoltaicenergycompanies(Part1.)


COMPANYNAME ACTIVITYPLACE

(GERMANY)WORKFORCE

/DATA

AvancisGmbH

ProductionofsolarmoduleswithCIS/CIGSphotovoltaictechnology(withanultra‐thinlayerjust2micronsthick)

Torgau

500employees

120MW/year

Producesmorethan800,000

modulesofsolarthinsheetcells(CIS)peryear

DeutscheEnergieversorgungGmbH

Designandimplementationofphotovoltaicsystems,

installation,maintenanceandoperationofenergyplants

Leipzig35employees

€12mturnover

FENECONGmbH&Co.KG

Manufactureofenergystoragesystems,workinginclosepartnershipwiththeBYD

technologygroup

Deggendorf 30employees

IBCSOLARAG

Promotionofphotovoltaicprojects

BadStaffelstein

400employees

€600mturnover

Morethan2.2GWand150,000photovoltaicinstallationsworldwide

KOSTALSolarElectricGmbH

Manufactureofcomponents,installation,storage

technologyandphotovoltaicinverters

Breisgau

15,083employeesworldwide.

Totalinstallations

30,179

Outputfromitsmodules:

640,17GWh


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(GERMANY)WORKFORCE

/DATA

RenusolGmbH

Producesandmarketsassemblysystemsforphotovoltaicpanels

Köln

90employees

Morethan2.4million

photovoltaicmodulesinstalled

inEurope

RitterEnergie‐undUmwelttechnikGmbH&CoKG

Develops,producesanddistributesphotovoltaicandecologicalenergysystems

Dettenhausen

1,600employees

$150mturnover

SMASolarTechnologyAG

Manufacturerofinvertersforphotovoltaicenergy

Niestetal

6,500employees

€1.7bnturnover

Invertersfordiverserangeofinstallations:from6kWto

40MW

SolarnovaDeutschlandGmbH

Manufacturerofsolarpanels

Wedel 35employees


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Note1:BYDisahightechnologyChinesecompanyspecialisinginautomobileandrenewableenergy.In2015ithad187,000employees,anannualturnoverofabout9.2billiondollars.Itisaleaderinthemarketoflithium‐ionbatterieswithacapacityof10GWh,creatoroftheworldlargestenergystorageplant.

Note2:SMASolarTechnologyAGistheworld’slargestmanufacturerofinvertersforsolarenergy.In2010and2011 it was awarded the Energy Efficiency Award by the German Energy Agency for its carbon neutralproduction.


Notethatunlikethewindindustry,inthephotovoltaicsector,Germancompaniesare not among the world leaders. The world’s ten largest manufacturers ofphotovoltaicmodules in2014(indescendingorderofmarketshare)were:TrinaSolar(China),YingliGreen(China),CanadianSolar(Canada),HanwhaSolarOne‐Q‐Cells(SouthKorea),JinkoSolar(China),JASolar(China),Sharp(Japan),ReneSolar(China),FirstSolar(USA)andKyocera(Japan)(Tsanova,2015).

Ascanbeseen,Chinatopstherankingofindustryleaders.Indeed,asweshallseebelow,theentryofChinesecompaniesintothesectorhashadatremendousimpactonGerman industry.The lowpricesofferedbyChinese firms havebeengainingthemmarketshareattheexpenseofGermanfirms.ManyGermancompanieshavebeenboughtoutortakenoverbyAsiancompaniesandothershavegonebankrupt.One of the main companies in the country’s photovoltaic industry, Q‐Cells, waspurchased in2012bySouthKorean firmHanwhaafterbeingdeclared insolvent.OtherexamplesincludeRECWafer(bankrupt),SOLONAG(purchasedbyMicrosolfromIndia)andSoltectureSolartechnikGmbH,previouslySulfurcellSolartechnikGmbH(bankrupt).

SOLARWATTAG

Manufacture,marketing,

distributionandsaleofsolarpanelsandallkindsof

componentsforalternativeenergies,aswellinstallation,maintenanceandreparation

Dresden

500employees

€350mturnover

300MW/yearproductioncapacity

SolarWorldAG

Manufactureandmarketingofphotovoltaicproducts,

integrationofthedifferentcomponentsofthesolarvaluechain,fromrawmaterial(polysilicon)toproductionmoduleandfrommarketingsolarpanelstopromotionandkeyconstructioninsolar

energysystems.

Bonn

3200employees

€700mturnover


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10.3. Biomassandbiogas

Intheareaofenergyproductionfromsolidbiomass,woodisthemostcommonlyusedrawmaterialinGermany.

More than half of the energy generated from wood is obtained using domesticboilers.Fortypercentofthisisintheformoffirewoodandtherestassawdust,wasteandshavings,althoughtheuseofwoodpelletshasrisensignificantly.Inordertomeet Energiewende targets, in which biomass plays also an important role, theGermangovernmenthasbeensubsidingthepurchaseofbiomassboilers.

Valuechain

Thevaluechainforbiomass154canbedescribedasfollows:a)transformationandproductionoftherawmaterialforconversionintoenergy;b)productionofenergy;c)manufactureofsteamboilers;d)manufactureofauxiliarydevicesforboilers;e)manufacture of steam turbines and fixed, variable and adjustable electriccondensers; f) wholesale distribution and marketing; g) fitters and companiespromotinginstallationforthirdpartners.Thesecomeinmanydifferentsizesandcharacteristics;h)importersofothertypesofproduct.

AccordingtoDENA(2015),thankstocontinueddevelopment,Germantechnologyharnessing solidbiomass for energypurposes is characterizedbyahigh level ofreliability and by offering optimum solutions for customers’ needs. As a result,Germancompanieshavehighlyefficienttechnologiesandareworldleadersinallformsofpower.Modernheatersaresuppliedforheating individualroomsor forproducing hotwater, small combustion installations for supplying heat to singlefamilyhomesorbuildings,andbiomassboilersthatprovideanefficientheatsupplyto multiple consumers and industrial processes. Modern fireplaces by Germanmanufacturersarenotablefortheirefficientlow‐carbontechnology.

The strengths of German suppliers of small combustion boilers includesophisticated technologies for user‐friendly control and regulation, such asinterconnection with smart phones, and development of convenient automaticsupply systems. This achieves relatively high performance, while considerablyreducingemissions.

Biomass‐fired CHP (combined heat and power) facilities, developed inGermany,standatthevanguardofglobaltechnology.Germanprovidersofferstate‐of‐the‐artinstallationsinapowerrangefrom10kW,withinternationalexperience,astheyhaveabout500installationsoperatingworldwide.

Inrecentyears,Germancompanieshavecontributedtoreadyingwoodgasificationtechnology155forcommercialization.TheGermanbiogasindustryisapioneerinthegeneration and recovery of this fuel. Germany is simultaneously themarket and

154(GorozarriJiménez,2012)155Woodgassynthesis intosecondgenerationbiofuel isbeing testedatanexperimentalplant inKarlsruhe(Germany).


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technology leader, and has acquired important expertise, mostly in the field ofgasificationfromorganicwasteandrenewableresources.Germancompaniesareeven leading theway in the growingbiogas supplymarket, andhavepositionedthemselvesatthedifferentstagesinthebiomethaneproductionchainwitheffectivetechnologies(DENA,2015).

Germancompaniesinthebiogasindustrycovertheentirevaluechain,fromdesignandfinancingtooperationandmaintenanceofbiogasplants,aswellassupplyofbiogastothenaturalgasnetwork.Theyalsohaveextensiveexperienceinbiologyorientedtowardstheprocessandthecorrespondinglaboratoryservices.Advancedbiological products are also available in the field of cogeneration plants, ininstallationswithfuelandstoragetanks,aswellasinbiogasanalysistechnology.

In2013,Germancompaniesexportedabout45%ofoutput,andmorethanhalfofallenergyproducedfrombiogasinEuropeisofGermanorigin.Attheendof2012,thisfigurewas12Mtoe.

At theendof2013,about7,700biogasplantswereoperating inGermanywithatotal installed capacity of approximately 3.5 GW. These plants produced about24,000GWhofpowerandsuppliedapproximately6.8millionhouseholds.InMay2011,theGermangasdistributionnetworkwassuppliedby151biomethaneplants(DENA,2015).


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MainGermanbiomasscompanies

The table below shows the main German biomass companies, with the samestructureasprevioussectionsinthischapter.

TABLE30.MainGermanbiomasscompanies(Part1.)


(GERMANY)WORKFORCE

/DATA

AgriKomp

Biogasplants

Supplierofcomprehensivesolutions

Merkendorf

Morethan400employees

€50mturnover

Morethan600plantsinEuropebetween30kWand2MW

AVANCTECH

Supplierforbiogasplants

Wholesalersinthefieldofphotovoltaicenergy,wind

energy,bioenergyandelectrictransport

Barssel 50employees

HPCBIOSYSTEMSGmbH&Co.KG

Fieldofrenewablerawmaterials–farming,

commerceandrecycling.Bio‐refineries

Berlin

HREnergiemanagement(Germanpowergenerators)

Advice,planningofdevelopment,productionandsaleofcogenerationplantsofbiomass,systemsforenergy

management

Bünde10employees

$10m



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TABLE31.MainGermanbiomasscompanies(Part2.)

IE‐SGmbHIntegratedEnergySystems

Itfocusesonthere‐utilizationofwasteflows,whichcanbetransformedintorenewable

energy(naturalgasorbiomass)

Leipzig

104,944employees

€71.02bnturnover

Biomassgasificationplant

of2.5MW

PlanETBiogastechnikGmbH

Constructionandserviceofbiogasplants

Vreden

Morethan250employees

€100msales

Installed

141,145kW(75kWplants)with360biogasplants

worldwide


10.4. SomeconsiderationsontheimpactoftheEnergiewende

WehaveanalysedandlistedthemainGermancompanies156operatinginineachoftheformersub‐industriesforthemainrenewableenergies.Aswecansee,therearemanylocalcompanieswhich,aprioriarebenefittingfromtheEnergiewende,thusachievingoneof the secondaryobjectivesof theprogramme, tobenefit the localeconomy.

However,itisalsoimportanttonotethatitisimpossibletocovertheentireGermanrenewablemarket or consider thewhole country onlywith German companies,althoughtojudgefromthetablesquoted,itmightbeassumedthatthesecompanieswouldberesponsibleformostofthecountry’senergytransition,increasingtheirturnovertosupporttheincreaseinconsumptionofrenewablesrequired.157Otherpowerfulmultinationalsintheindustrywillalsobenefit,suchastheDanishVestasinwindenergy,ortheAmericanFirstSolarinphotovoltaicenergy,bothofwhichhavealargemarketshareinGermanyintheseindustries.

TherealeconomicbenefitofGermany’senergytransitionwillthereforenotonlybefor German companies, favouring the local economy as initially intended.158Nonetheless,aspreviouslydiscussed,exports fromthewindandsolar industriesmakeupalargeshareofthecountry’stotalexports.

156Formoreinformationoncompaniesintherenewableenergyindustry,seeAppendix13.6,whichshowsthat,aswellasthelargemanufacturerswithrenewabletechnology,currentsynergiesmeanthattherearealsomanyothersmallerfirmsinvolvedinvaluechainsinanumberoftechnologies.157Asindicated,estimatesareforanincreaseintheshareofrenewablesof38%by2020,50%by2030,67%by2040and80%by2050,andinfinalenergyconsumptionby18%by2020,30%by2030and60%by2050.158(Morris&Pehnt,2012)


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V.REFLECTIONSANDFINALCONSIDERATIONS

11. THREEPRELIMINARYCONSIDERATIONSANDSEVENTOPICS

Giventhecomplexityoftheissuedealtwithinthisstudyandtheextentofthetopicsaddressed in it, the following is meant more as a reflection and some finalconsiderationsthanasummaryorasetofsystematicconclusionsonthevarioustopicsdiscussed.

TheGermanenergytransitionhasmanydifferentaspects.Herewedealwiththeperspectives of policy, regulation, energy structure and power generation,development of the proposedobjectives, costs, investments and competitivenessandindustry.Thesearetheseventopicsbasicallyanalysedinthisstudy,whichwillbediscussed,intheformofreflections,below.

11.1. Threepreliminaryconsiderations

Inthissection,wewillidentifyvariousideasasapersonalsummaryandresultofthestudyconducted.

Firstly,althoughitisevidentthattheEnergiewendeistheresultofpolicy,regulation,economyandhistory,thereisafundamentalcontradictionbetweenitsgoalsanditstools.

Themainobjectiveappearstobetoreducegreenhousegasemissionsandforthispurposethetoolsavailablearethoseofferedbyenergyefficiencyandlow‐carbonenergies(renewablesandnuclear).However,whatmightbeconsideredtoolsareactually seen as objectives, and some technologies with limited or zero carbonemissionsarenot taken intoaccount,because theyarenotpoliticallyacceptable,namelynuclearenergy.

Thesecondisthedifferencebetweentheperiods“required”forthedifferenttargetsandthedifferentialeffortrequireddependingonthetypeoftarget.Thus,thetargetsaregenerallysetfor2050,ahorizonthatseemsreasonablefortheambitionsofthegoalspursued.Nonetheless,othertargetshavemuchshorterperiods(suchastheacceleratednuclearclosureprogrammeapprovedin2010).

Ourthirdconsiderationrelatestothetotalcostsofdevelopingrenewables,nuclearclosureanddismantlingandinvestmentinnewcoalplants.Theseallrequirelarge‐scalefundingandthecostsandbenefitsarenotnormallygroupedtogether.Thisismademorecomplicatedbythedifferencesbetweenthetypesofcosts,benefitsandtheir economic valuations, and between the periods in which each of them aregeneratedandachieved.

Thesecostsareclearlydamagingtoindustrialcompetitiveness,asaconsequenceoftheneedtoincreasethesalepriceofelectricitytoenablethecompaniestoaffordsuchanoutlay.Inthisframework,thelargepower‐consumingcompanies,forthemoment,enjoyexemptionsontherenewablespayment,althoughthismeansthatalarge part of German industry, consisting of small and medium enterprises, is


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bearingamajorburden,togetherwithdomesticconsumers.Atthesametime,thiskindofconsumptionincreasesthenumberofconsumersatriskofenergypoverty.

11.2. Seventopics

Policy

TheEnergiewende is a very ambitious programme.On the one hand, it needs toundertakeagreatdiversityofchangesrelatedtoenergywhileontheother,itneedstimetoaccomplishthetransformationspursued.

AlthoughtheEnergiewendeandanumberofitskeyissueshaverecentlybeeninthenews, the real originsof theprogramme canbe tracedback to the seventies. ItsdevelopmentcannotbeunderstoodwithoutreferencetotheGreens’electoralgains,achieving its first entry into a German government in 1985, in Hessen, andsubsequently(in1998and2002)joiningincoalitiongovernments.

This formspartofapolitical cultureof coalitiongovernmentsbetweenChristianDemocratsandLiberals,SocialistsandGreensorChristianDemocratsandSocialists.Asaresult,giventhevarietyofissuesaddressedbytheEnergiewende,Germany’senergypolicyisanissuewhich,fromtheperspectiveofthestate,hashadamajorimpactonsocietyingeneral,sparkingstrongdivergencesofopinionamongGermancitizens.

In addition to the objectives of combatting climate change, driven by thedevelopmentofrenewableenergyandgreaterenergyefficiency,there isalsothequestionofoppositiontonuclearpower,whichprobablyreachedaturningpointfollowingtheChernobylaccidentandwhosecosthasnotbeenhighlightedinallitsimportanceandseverity.Thenuclearissuehasbeenthesubjectoflongdebate,withopposing opinions, actions and decisions over the last fewdecades. In 1974, forexample,nuclearenergywassupportedasareactiontotheoilcrisis.In1986itwasdecidedtoabandonnuclearwithintenyears,andthereweretwonewplans,onein2001andotherin2011.

Theobjectivesor“ambitions”involvenotonlytransformingtheenergyandpowermix.Another aim is to increase theweight of citizens and local communities, bygiving them increasing decision‐making capacity. In this context, distributedgenerationmightbe said tohavebecomean “emblem” that seeks to showcaseacertainwayoflife.

TheEnergiewendeinvolvesanenergytransitionthatgoesbeyondsimpletargetsonrenewableenergypenetrationorthefightagainstclimatechange.Itisacombinedwork(Gemeinschaftwerke)thatrequirestheparticipationofalargenumberofsocialandeconomicagents.

Germany’sgeographicalpositioninthecentreofEurope,withamajorlandareaintheEuropeanframework,seaaccessandtenborderswithothercountries,anditspowerfulinfrastructureofoilandgaspipelines,refineriesandpowertransmission,givesthecountryaprivilegedplace,sinceithasinterconnectionsandinfrastructure


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for importing and exporting energy. All of these factors underline the strategicrelevanceofenergyintegrationwithneighbouringmarkets.

Despite the political changes, particularly with regard to nuclear energy, thereappearstobesocialandecologicalconsensusontheneedforenergytransition,andtomakeanyincreaseinpowerpricesmoreaffordablefortheconsumersbyraisingincomelevels,sinceindustrialconsumersarelessaffectedthankstotheexemptionstheyenjoy.

However,thegrowingnumberofhouseholdsinriskofenergypovertycouldinthefuturerepresentalimitation,oratleast,anobstacletotheEnergiewende;thiscouldalsobethecaseiftheexemptionstofeed‐intariffsarenotmaintainedinenergy‐intensive industry and the industrial network of SMEs that are not eligible forexemptionsandaresupportinghighenergyprices.

Regulation

The political objectives have been translated into numerous and ever moreambitiousinstrumentsoflegislation.Theoriginsforthisinitiativegobackto1985,when it was possible to gain support from the federated states for the issue ofrenewableenergy;thishasbeenextendedtoincludeenergyefficiency(infinaluse,industry and building), transport, and in financing programmes, incentives andsubsidies.

At the same time, it is important to note the subsequent amendments to theregulations, in order to adapt it progressively to new objectives and take intoaccount the results (with their successes and failures) of successive plans andregulations.

Energymix

Gradual changes are taking place in the energymix. Germany’s energy situationshowsthevastweightofoilinthecountry’senergymix(althoughitaccountsforasmallershare than inSpain),andthecontinued importanceofcoalandgas,withfossilfuelsmakingup80%ofprimaryenergy.

Itshouldbeborneinmindthatprogresstowardsreduceddependencyonoilisacomplex task, given the current stateof technology, incentivesandeffectiveness.Theimportanceofcoalmustbeseenintermsof itstraditionandthefactthatatpresentGermanyisbenefitingfromadomesticresource,lignite,whichallowsthetechnologyoftheadvancedplantstobecombinedwithcompetitiveness.

Gasisamainlyimportedresource,andthereisanambivalentattitudetowardsitsuseforpowergeneration,despitetheexistenceofaninfrastructurefordirectsupplyfromRussia.


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Powergenerationstructure.Powermix

Asmentioned,therehavebeensuccessivechangessince1986inthewaytheroleofnuclearenergyinthepowermixhasbeenviewed.Politicalandeconomicattitudeshavevariedandsomecommitmentshavenotbeenrespected.Finallythecountryhas opted for accelerated dismantling,with important repercussions in terms ofcostsandastrongimpactontraditionalenergycompanies.

For its part, one can see a renaissance in coal and coal‐related technologies,particularly in the caseof lignite.Powerproductionandhistorical analysis showthat,despiteareductioninhardcoal,thesameisnottrueoflignite,whichcontinuestoplayanimportantroleinGermany’senergystructure,albeittheshareisfalling,aroleitwillcontinuetoholdincomingyearsdespitediscussionsandpoliticalactiontoprogressivelyreduceitsuse.

Inwindenergy, therehasbeenaswitch frominvesting inonshorepower,whichoffers“near‐competitive”prices,tooffshore,whichismoreexpensiveandrequiresthedevelopmentofanimportanttransmissioninfrastructure.

In any case, progress has been made towards the deployment of renewabletechnologiesanddistributedgeneration,withmajorconsequencesforthestrategyandbalancesheetsofpowercompanies,togetherwithnucleardismantling.

Althoughthisstudydoesnotanalyseelectricitymarkets(arelevantissueandthesubject of future reform),we do need to consider Germany’s role in the CentralEuropean context. As discussed with regard to the political field, the energytransition involvesaneed forgreater regional cooperation,and interconnectionswillbeanelementoftheinfrastructurewhich,togetherwithenergyinterchangeswillgaingreaterimportance.Debateisalsorequiredonthecapacitymechanismstosupportthedevelopmentofrenewablesandforthesecurityofsupply.

Developmentoftheobjectives

Oneofthemostexplicittargets–andoneonwhichmosthasbeenwritten–isthepenetration of renewables in the power mix, an area in which success is moreevident.Nevertheless, the percentages achieved to date are lower than in Spain,(which already hadmajor levels of hydro power generation), 42.8% in Spain ascomparedto26.2%inGermanyin2014.

AlthoughtherehasbeenasignificantreductioninCO2emissions,Germanyisnotontracktomeetitstargetsfor2020.EmissionreductionsinabsolutetermsmustbeseeninthecontextofacountrylikeGermanywithahighvolumeofemissions,whichisaneconomic,industrialandenergypowerinthecentreofEurope.

Inanycase,thereappearstobeprogresstowardgreaterenergyefficiency,whichwillleadtoareductionorstabilisationofenergyneeds.


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Nevertheless, difficulties are being encountered in achieving the plans onpenetrationof renewables in final energy and changes in transport andbuildingefficiency.

Investments,costsandcompetitiveness

Of all the implications and difficulties of the Energiewende, perhaps the mostimportantisrelatedtotheeconomy,asmajorinvestmentsforthedevelopmentofrenewableshaveanimpactonthefinalconsumerandthecompetitivenessoftheindustry,duetoanincreaseinfinalprices.Furthermore,thisprocessalsoinvolvesexpenditureon investments inpower transportanddistribution,nuclearclosureanddismantling,andthedevelopmentofnewcoalplantswithhighspecificcosts.

However,onceagain,Germany’simportanceinEuropemeansthatexemptionsforenergy‐intensive industry find a place in the EU context and directly facilitateindustrialcompetitiveness.

Anotherdifficulty–anditisnotaminorone–istheincreaseintotalcostresultingfromnewdevelopments in renewables, for examplenewoffshorewind, and theneed for a transmission infrastructure from northern coastal areas to the south(includingnotonlyexpansionofthetransmissiongrid,butalsoinvestmentinthemedium‐voltage and distribution grids). Moreover, development of thesetransmissioninfrastructureswillmeetwithacertaindegreeofsocialopposition.

Although for themoment, there ispolitical consensus insupportofacontinuousincreaseinelectricitypricesfordomesticconsumers,therearetwoconsequences.Ontheonehand,thereseemstobeaclearweakeninginsocialsupportand,ontheother,anincreasingproportionofthepopulationisnowslippingbelowtheenergypoverty line. However, it should be noted that the Energiewende‐introducedsurchargeforsupportingrenewableshasbarelyincreasedinthelasttwoyearsandneitherhasthepriceofelectricity,whileatthesametimetherehasbeenafallinthepriceofwholesaleelectricity,whichnowstandsatverylowlevels.

Industry

Germanyhashadaverystrongindustrialpolicyanditsindustrialbaseinthecoalandsteelsectorshasevolvedtowardestablishingpoliciesthatareconsistentwithnewenergysectors(firstnuclearandmorerecentlyrenewable)andafterthattofind ways of making them more transversal, though nonetheless active andintegrating.

Renewable‐energy‐relatedindustryhasseenundisputedsuccessesinwindenergy,withcompaniessuchasEnercon,Siemens,NordexandSenvionnotonlyachievingamajormarketshareinGermany(nearly70%)butalsoontheglobalmarket,wheresomeofthemnowhaveashareofbetween8%and10%.

Inthedevelopmentofbiomassandbiogas,Germanyiscreatingapowerfulbaseofcapitalgoodsandengineering;albeitthetypeofmarketandvolumemeansthatthequantitiesinvolvedarenotasgreatasinthecaseofwindenergy.


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In the field of photovoltaics, a number of issues need to be clarified, and theperformanceofthesectorcanbedefinedasambivalent.WhilstChinaandJapanleadthe global market in photovoltaic modules (Chinese competition has seriouslyharmed German industry), when it comes to manufacturing and marketing ofphotovoltaic products and integration of diverse components in the value chain,therearenumerouscompaniesinGermanycateringforthedomesticmarketthathaveexportingcapacity.

In the industrialcontext therelationshipbetween industrialpolicyandexportofrenewable energy technologies is important. This is the case of the IRENA(International Renewable Energy Agency), which was promoted by the UnitedNations,althoughparticularlybytheEUandGermany.Germanymanagedtohavethe agency’s technological centre,which handles important funds for renewableenergiesindevelopingcountries,locatedinBonn.

All of these points provide some idea of the importance Germany gives to itsindustryandtheprospectsofexportingitstechnologyandexpertise.


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13. APPENDIXES

13.1. APPENDIX1:Abbreviationsandacronyms

ACEEE AmericanCouncilforanEnergy‐EfficientEconomy

bcm Billioncubicmetres

BDEW GermanAssociationofEnergyandWaterIndustries(DerBundesverbandderEnergieundWasserwirtschafte.V.)

BEE German Renewable Energy Federation (BundesverbandErneuerbareEnergiee.V.)

BMBF FederalMinistryforEducationandResearch(BundesministeriumsfürBildungundForschung)

BMEL FederalMinistryofFoodandAgriculture(BundesministeriumfürErnährungundLandwirtschaft)

BMUB FederalMinistryfortheEnvironment,NatureConservation,BuildingandNuclearSafety(BundesministreiumfürUmwelt,Naturschutz,BauundReaktorsicherheit).

BMVBS FederalMinistryforTransport,BuildingandUrbanDevelopment(BundesministeriumfürVerkehr,BauundStadtentwicklung)

BMWi FederalMinistryofEconomicAffairsandEnergy(BundesministeriumfürWirtschaftundEnergie)

bn Billion109(1,000,000,000)

BNetzA GermanFederalAgencyforthePowerGrid(Bundesnetzagentur)

BSW GermanSolarAssociation(BundesverbandSolarwirtzchaft)

BWE GermanWindEnergyAssociation(BundesverbandWindEnergie)

BWR

CCS

Boilingwaterreactor

CarbonCaptureandStorage

CCTS CleanCoalTechnologies

CDU ChristianDemocraticUnion

c eurocent

CHP Combinedheatandpower

CO2 CarbonDioxide

CO2eq. CarbonDioxideequivalent

COP21 Twenty‐FirstConferenceoftheParties


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CPV ConcentratorPhotovoltaics

CSU ChristianSocialUnion

DENA GermanEnergyAgency(DeutscheEnergie‐AgenturGmbH)

EC EuropeanCommission

EEG RenewableEnergySourcesAct(Erneuerbare‐Energien‐Gesetz)

EER EnergyEfficiencyRating

EI Energyintensity

EnEV EnergyConservationOrdinance(Energieeinsparverordnung)

EP EuropeanParliament

EPS EmissionPerformanceStandards

ErP Energy‐relatedProducts(Germany)

ETS EuropeanTradeSystem

EU EuropeanUnion

EUA ETSallowanceunit(measuredineuropertonneofCO2)

FDP FreeDemocraticParty

FiT Feed‐inTariffs

FTA Freetradeagreement

FV Photovoltaics

GDR GermanDemocraticRepublic

GHG

GIZ

Greenhousegases

GermanInternationalCooperationAgency(DeutscheGesellschaftfürInternationaleZusammenarbeit)

GVA Grossvalueadded

GW Gigawatt

GWh Gigawatt‐hour

ICSID InternationalCentreforSettlementofInvestmentDisputes

IEA InternationalEnergyAgency

IITC IRENAInnovationandTechnologyCentre

ILSR InstituteforLocalSelf‐Reliance

IPCC IntergovernmentalPanelonClimateChange

IRENA InternationalRenewableEnergyAgency


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kb/d Thousandbarrelsofoilperday

kW Kilowatt

kWh Kilowatt‐hour

LNG Liquefiednaturalgas

LPG Liquefiedpetroleumgas

m Million

MgC MarginalCost

Mt Milliontonnes

Mtoe Milliontonnesofoilequivalent

MW Megawatt

MWh Megawatt‐hour

NABEG GridExpansionAccelerationAct(Netzausbaubeschleunigungsgesetz)

NAPE NationalActionPlanonEnergyEfficiency

NCRE Non‐ConventionalRenewableEnergy

OECD OrganisationforEconomicCo‐operationandDevelopment

OJ OfficialJournalofTheEuropeanUnion

OPEC OrganizationofPetroleumExportingCountries

OPV OrganicPhotovoltaic

PJ Petajoule

ppm Partspermillion

PPP Purchasingpowerparity

PURPA PublicUtilityRegulatoryPoliciesAct(USA)

PV Photovoltaic

PWR Pressurizedwaterreactor

RE Renewableenergy

ROI ReturnonInvestment

RRM Renewablerawmaterials

SED SocialistUnityParty

SMEs Smallandmedium‐sizedenterprises

SPD SocialDemocraticParty


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StrEG ElectricActforfeed‐intariffs(Stromeinspeisungsgesetz)

t tonne

TAZ DieTageszeiturg(Germannewspaper)

TFEU TreatyontheFunctioningoftheEuropeanUnion

toe Tonnesofoilequivalent

TSO TransmissionSystemOperator

TWh Terawatt‐hours

UN UnitedNations

UNFCCC UnitedNationsFrameworkConventiononClimateChange

USA UnitedStatesofAmerica

USD UnitedStatesdollar

Wp Watt‐peak

WWF WorldWildlifeFund


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13.2. APPENDIX2:BasicinformationonGermany

ItisdifficulttooverestimatetheimportanceoftheGermaneconomyinEurope.IthasthehighestGDP(GrossDomesticProduct)intheEuropeanUnion(EU)andthefourthhighestintheworld.

TABLE32.BasicinformationonGermany(2014)

DATUM GERMANYCapital Berlin

Flag

CoatofArms

Governmentmodel ParliamentaryFederalRepublicMembershipofinternational

organizationsEU,UN,NATO,CBSS,OSCE,OECD,G8andCOE

LeadersPresident: JoachimGauck

FederalChancellor:AngelaMerkelVice‐Chancellor: SigmarGabriel

LegislativeinstitutionsBundesratBundestag

Landarea 357,168squarekilometres

Location

NorthernEurope

Borders:Denmark(North)Netherlands,Belgium,Luxemburgand

France(West)SwitzerlandandAustria(South)andCzechRepublicandPoland(East)

Population(density) 79,800,000inhabitants (223inhab/km2)HDI 0.911

Officiallanguage GermanCurrency Euro(€)GDP €2,915,650million

SectorialGDPAgriculture:0.9%Industry:27.1%Services:67.5%

GDPpercapita €35,400Inflation(CPI) 0.3%Centralbank DeutscheBundesbankExports €1,134 billionImports €916.5 billion

Coveragerate(Exports/Imports)

123.7%

Tradebalance €217.5billion


The manufacturing industry is an important part of the German economy,accounting for 30.5% of its GDP, a high figure when compared to other largeeconomies. The German industrial sector focuses mainly on exports, which


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represented7.7%ofglobalexportsin2013,makingthecountrytheworld’sthird‐largest exporter. Internationally, German industry is known for production ofautomobiles, machines and chemical products, as well as electrical engineering.Manyofthebasicproductsusedintheproductioncyclesoftheseindustries,suchasaluminium, steel and glass, are produced in Germany, which boosts the entireGermaneconomy(Rutten,2014).

FIGURE23.Germanexportsbytypein2013(%)

Source:(ObservatoryofEconomicComplexity,2013)

FIGURE24.Germanexportsbytypein2013(%)

Source:(ObservatoryofEconomicComplexity,2013)


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FIGURE25.LocationofGermanstates(Länder)andneighbouringcountries

Source:(Dengleretal.,2012).


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13.3. APPENDIX3:TheGreens

The followingparagraphsprovidemore informationon theGermanGreenParty(DieGrünen),itspolicies,itselectoralresults,representationinthefederatedstatesandthemainpointsofitsmostrecentprogramme.

Policy

Drivenbyitsthinkingonecologicpolicy,theGreens’ideologyisalsorelatedtoleft‐wing liberalism, pacifism and the fostering of a mixed and sustainableenvironmentally‐friendlyeconomy.TheGreensalsoattractedadissidentsectoroftheFreeDemocratParty(FDP),whichwasrelatedtothecivilrightsmovementandradical feminism. Their main political stance on a range of issues is discussedbelow.159

Inenergyandenvironmentalpolicy,abasictenetoftheGreens’policyissustainabledevelopment.Thisincludesrespectfortheenvironment,theprotectionofnaturalresourcesandthepromotionofrenewableenergies.Aswellastheirenvironmentalpolicy, since 2007 the Greens have also defended a climate policy that includesissuesofsocioeconomicandsecuritypolicy.Hans‐JosefFell,whohasbeenamemberof theGreenssince1992andaspokesmanof theAlliance ‘90/TheGreens in theBundestag, has been one of the main promoters of the party’s energy andenvironmentalpolicy.

Sustainabledevelopment is also themainplatformof theGreens’ socioeconomicpolicy (related to the above issues). The aim is tomeet current needs withoutharmingtheinterestsoffuturegenerations.Onesectionofthepartyalsodefendsthe ideaofan “unconditionalbasic income” inorder towiden theexisting socialsecuritysystem.

In the area of social policy, the Greens firmly defend individual and collectivefreedomandcivilrights.Examplesofthispolicyincludeintegrationofimmigrantsina“multiculturalsociety”,recognitionofsame‐sexmarriageandgenderequality.TheGreenshavea strictpolicyonquotas toensureagenderbalance inall theirguilds; forthisreason, theyhavetwopresidents(in2015SimonePeterandCemOzdemir).

As regards their stance on Europe, the Greens support both the deepening andextensionoftheEuropeanUnion(EU).Amongotherissues,thisincludessupportforTurkey’smembershipbidandfortheLisbonTreaty.

Ineducationalmatters,theGreenssupporttheprincipleofcomprehensiveschools,inorder toend thecurrenteducationsystem inGermanywith its segregationofpupilsatdifferentschoollevels.Onuniversitypolicy,theGreensrejectuniversityfees(bannedinGermanyuntil2005),althoughinHamburg,wheretheyformpart

159(Decker&Neu,1980)(Bündnis90/DieGrünen,2015)(Probst,2007)(Gómez,2011)(DW,2011)(Nordsieck,2013)


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oftheregionalgovernment,theyhaveacceptedamodelinwhichstudentspayfeesretrospectivelyiftheyfindwell‐paidemploymentaftercompletingtheirstudies.

Electoralresults

TABLE33.Federalelections

ELECTORALYEARNO.OFVOTESFOR

THEGREENS%OFVOTES SEATS/TOTAL VARIATION

1980 569,589 1.5 0/497 1983 2,167,431 5.6 27/498 271987 3,126,256 8.3 42/497 151990

GermanUnification2,347,407 5.0 8/662

ResultsforAlliance’90/TheGreens(East)andTheGreens(West)1994 3,424,315 7.3 49/672 411998 3,301,624 6.7 47/669 22002 4,108,314 8.6 55/603 82005 3,838,326 8.1 51/614 42009 4,641,197 10.7 68/622 172013 3,690,314 8.4 63/630 5


TABLE34.ELECTIONSTOTHEEP

ELECTORALYEARNO.OFVOTESFOR

THEGREENS%OFVOTES SEATS/TOTAL VARIATION

1979 893,683 3.2 0/81 1984 2,025,972 8.2 7/81 71989 2,382,102 8.4 8/81 11994 3,563,268 10.1 12/99 41999 1,741,494 6.4 7/99 52004 3,078,276 11.9 13/99 62009 3,193,821 12.1 14/99 12014 3,138,201 10.7 11/96 3


Presenceinfederatedstates

The Greens govern with the SPD in Baden‐Wurttemberg, and with the SocialDemocrats in Lower Saxony, Bremen, Hamburg, North Rhine‐Westphalia,Rhineland‐PalatinateandSchleswig‐Holstein.InThuringia,theygovernincoalitionwiththeSPDandDieLinke(TheLeft).InHesse,theyarepartnersoftheCDU.TheyareinoppositioninBavaria,BerlinBrandenburg,Mecklenburg‐WesternPomerania,Saxony,Saxony‐AnhaltandSarre.


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FIGURE26.Greenrepresentationinregionalparliaments(2015)

Source:(StatistischeÄmterdesBundesundderLänder,2015)

Recentprogramme

ThesearethemainpointsintheGreens’programme160forthe2013elections,whichsought torepresent“all thosewhowantto live inamodern, fairandsustainablesociety”.Inabriefanddirectpamphlet‐summary,theGreensaskedvoters:“Whataboutyou?”. If theyobtainedenoughvotes, theypromised togovern incoalitionwiththeSPD.Herewedescribetheirninegovernmentprojects:a)inenergy,pursuitof a clean, secure and affordable “citizen‐owned” supply, to be 100%met withrenewableenergy;b)minimumgeneralwageofat least€8.50perhour;c)morepublic kindergartens, instead of the current system of economic assistance forparents;d)abolitionoftheexistinghealthcaresystem,whichtheyconsidertobe“class‐based” and introduction of a universal healthcare system; e) control offinancialmarketsandrestrictionsonbankindebtedness;f)adaptationofagriculture“totheneedsofanimalsandtheenvironment”;g)introductionofnewquality‐of‐lifewellbeingindicators,“becauseeconomicgrowthisnottheonlymeasureofwhatisimportant in life”; h) control ofweapons exports; and e) “firm” fight against theextremeright.

160(DW,2011)(Nordsieck,2013)(Bündnis90/DieGrünen,2015)


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13.4. APPENDIX4:LegaldevelopmentoftheEnergiewende

The table below gives a timeline of the main energy legislation enacted by theGermangovernment.

TABLE35.Germanenergylawsofthelast30years

No.(Graph) YEAR NORMATIVE

1 2014 Amendment totheRenewableEnergySourcesAct(EEG)2 2012 Agreementsoncogenerationwithindustry3 2012 Amendment totheRenewableEnergySourcesAct(EEG)4 2011 FinancingbytheKfWbankforfirstoffshorewindfarm5 2011 Monitoringprocessof“TheEnergyoftheFuture”

6 2011Lawonenvironmentandclimateandrenewableenergiesand

programmeforprogressiveclosureofnuclearplants(Atomausstieg)7 2011 Sixthprogrammeforresearchonenergy8 2010 NationalActionPlanonEnergy9 2010 EnergyConcept Plan10 2010 Lawonbiofuelshare11 2009 Amendment totheRenewableEnergySourcesAct(EEG)

12 2009FinancingbytheKfWbankfortherenewableenergyprogrammeandtheprogrammeofenergyefficiencyandrehabilitation(Energieeffizient

Sanieren)13 2009 RenewableEnergySourcesAct (EEG)forheatgeneration14 2009 NationalPlanforDevelopmentofElectricTransport15 2008 Raftoflawsonclimatechangeandtheenergyprogramme16 2007 Programmeforclimatechangeandenergy17 2006 Klimazwei researchprogramme18 2006 Foundationofthesolarenergydevelopmentcentre19 2005 EnergyIndustryAct (EnergiewirtschaftsgesetzorEnWG)20 2005 FinancingbytheKfWforthesolarenergyproductionprogramme21 2005 Fifthenergyresearchprogramme

22 2004 Amendment totheRenewableEnergySourcesAct(EEG)andtheSolarthermie2000Plusprogramme

23 2002 LawonCombinedHeatandPower24 2002 ModificationoftariffsforinstallationofEEGrenewables25 2001 Investmentinthe“Future”programme26 2000 Extralawforheatingandelectricity27 2000 RenewableEnergySourcesAct(EEG)

28 1999Preferentialloansprogrammeofferedbythereconstructionloans

corporation(KfWbank)29 1999 ReformoftheEco‐Tax30 1999 Programmeformarketincentives31 1999 “100,000SolarRoofs” programme32 1998 GrouponenergyefficiencyoftheBalticSea33 1997 Federalconstructioncodesforproductionofrenewableenergy34 1996 Fourthenergyresearchprogramme35 1996 “GreenEnergy” programme36 1995 “100million” programme37 1995 Ecological Subsidy38 1995 Ordinanceonlistoftariffsforarchitectsandengineers39 1993 Totalcostrates40 1991 LawonElectricityUptaketotheGrid (StrEG)or Stromeinspeisungsgesetz41 1990 Programmefortheenvironmentandenergysaving42 1989 “250MWofWindEnergy” programme43 1985 Supporttofederatedstatesforrenewableenergies


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Source:Ownelaborationfrom(IEA,2015)

GRAPH58.TimelineofGermanenergylaws

Source:(IEA,2015)

As the graph above shows, some periods saw more intense legislative activity,particularlytheyearsfrom2009to2013,whenmorelawswerepromulgated.

Thefigurebelowsummarisesthemainlegislationonrenewableenergy.


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IGURE27.TimelineofmainRElegislationinGermany


The table below summarises the progress of the legal framework of theEnergiewendeandthevariouslandmarksreached.

TABLE36.RelevantfactsrelatedtotheEnergiewende

YEAR RELEVANTFACTS1974 FederalEnvironmentalAgencyfounded.

1977Asaresultoftheoilcrisis, "thermalinsulation"and"heatingoperation"ordinancesarepassed,governingmaximumenergydemandforbuildingsandefficiencyrequirementsforheatingsystems.

1978

BlauerEngel(BlueAngel)labelcreatedinGermanycertifyinganabsenceofenvironmentallyharmfulproducts.Thelabelwascreatedbyacoalitionrangingfromenvironmentaliststolabourunionsandchurchgroups(14yearsbeforetheEnergyStarlabelwascreatedintheUSbytheUSEnvironmentalProtectionAgency).

1980PublicationofastudyentitledEnergiewende showingthatitispossibletomaintaineconomicgrowtheveniflessenergyisconsumed.

1983Forthefirsttimeinhistory, theGreenPartyenterstheGermanParliamentandgivesvoicetoenvironmentalconcerns.

1985 Länder supportforrenewableenergy.

2004. Photovoltaicenergy is included inthe EEG, so personsproducing energy intheirownhomeshavea state assurance thatitwill be sold at fixedpricesfor20years

2000. Renewable EnergySources Act (EEG) –reformulated tariff for theproduction of renewableenergy "GermanRenewableEnergyAct"

2001.FirstLawfornucleardecommissioningin32years

2001. Laws for thecreationofjobsrelatedtothe renewable energiessector

2008. Law ofPreference,regulating Non‐ConventionalRenewableEnergies forsuitable planningandgriduptake

2010. Law on basisforrateandbonuses

2009.Amendmentto theEEGontariffs

2010.German taxon nuclearfuel

2011. Law ontheEnvironment,ClimateandRE

Programme forclosure ofnuclear plants(Atomausstieg)

2012.Adjustment oftheRenewableEnergySources Act(EEG)regardingphotovoltaics

2014. Amendment of theRenewable Energy SourcesAct (EEG) and introductionof the energy change thatwould lead to the abolitionofnuclearenergy


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1986NuclearaccidentatChernobyl(Ukraine,formerUSSR).Fiveweekslater,theFederalMinistryfortheEnvironment,NatureConservationandNuclearSafetyiscreated.

1987

‐GermanChancellorHelmutKohl(PDC)speaksofthe"threatofseriousclimatechangeduetothegreenhouseeffect"intheGermanParliament.‐TheFraunhoferInstitutebuildsRappeneckerCottage,thefirstoff‐gridsolar‐poweredmountainfacilityforhikersinEurope.

1989 The"250MWWindEnergy"programmeisintroduced.

1990‐GermanParliament(Bundestag)approves thefirstNCRE(non‐conventionalrenewableenergy)DevelopmentAct.‐EnvironmentandEnergySavingprogramme.

1991

‐AdoptionofthelawonsupplyduringthecoalitiongovernmentofChancellorHelmutKohl,theConservativePartyandtheLibertarianPartyPDCFDP.Thislaw(knownastheStromeinspeisungsgesetzorStrEG)establishesfeed‐intariffs(FiTs)andstipulatesthatgreenenergyshouldtakepriorityoverconventionalenergy.‐The"SchönauerStromrebellen"(PowerRebellionofSchönau,asmalltownintheBlackForest)isagrassrootsmovementforbuyingfromandrecoveringthelocalnetwork.

1992TheFraunhoferInstituteforSolarEnergySystemsbuildsanoff‐gridsolar‐poweredhouseinFreiburg.Theaimistoshowthatanaveragehouseholdcanmeetallitshomeenergyneedsusingrenewableenergy.

1993 - Totalcostrates.

1995‐"100million."programme‐EcologicalSubsidy.‐Ordinanceonfeescheduleforarchitectsandengineers.

1996

‐KfW,apubliclyowneddevelopmentbank,launchesitsCarbonReductionProgrammetosupportretrofittingofexistinghousing,particularlyintheformerGermanDemocraticRepublic.‐PrivateEnergyresearchprogramme.‐"GreenEnergy"programme.

1997‐TheSchönauEnergyRebelsgaincontroloftheirlocalnetworkandstarttopromoterenewableenergy.‐Federalbuildingcodesforrenewableenergyproduction.

1998

‐"Liberalisation"oftheGermanenergymarket.Henceforth,powergeneratingcompaniesandnetworkoperatorshavetobelegallyseparateentitiesandthusnewenergysuppliersmaystartoperatingsellingonlygreenelectricity.Despiteliberalization,nobodyiscreatedinthecountryforanothersevenyears.‐Balticenergyefficiencygroup.

1999

‐The"100,000SolarRoofs"programmestartsthesolarmarketinGermany.ItalsolaunchestheMarketIncentiveProgramme,aschemewithamultimillion‐dollarfundtofinanciallysupportrenewableheatingsystems.‐Germanyappliesan"eco‐tax"whichannuallyincreasesthepriceperlitreofpetrolandkWhofelectricitygeneratedfromfossilfuels.Thisresultsinincreasedcarsales,morefuelefficiencyandareductioninoverallconsumption.‐Programmeofpreferentialloansofferedbythereconstructionloancorporation(KfW).‐Programmeofmarketincentives.

2000

‐ThecoalitiongovernmentofSocialDemocratsandGreens,ledbyChancellorSchroeder,launchestheRenewableEnergyAct(EEG)whichreplacestheSupplyActandspecifiesthatthefeespaidwillbelinkedtothecostoftheinvestmentandnottheretailprice.


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‐ChancellorSchroeder’scoalitiongovernment reaches anagreementwiththeownersofGermannuclearpowerplantstograduallydecommissionthemby2022.‐ExtraLawforheatingandelectricity.

2001‐TheCourtofJusticeoftheEuropeanUnionconfirmsthatfeed‐intariffsdonotconstitutestateaidandarethereforelegal.‐Investmentinthe"Future"programme.

2002

‐Energieeffizienzinitiative setup, focusing onpromotingenduseefficiencyinprivatehomesandbusinesses.ThisinitiativeisfollowedbytheEnergy‐ConservationOrdinance,Energieeinsparverordnung(EnEV).Thermalenergycogenerationlawpassed,withtwosubsequentamendments.Thisisthemostimportantinstrumentsupportingtheproductionofthermalenergy.‐ChangeintariffsforinstallationofrenewableEEG.

2004‐UnrestrictedacceptanceofphotovoltaicsintheEEG.‐Solarthermie2000plusprogramme.

2005

‐TheGermanNetwork Agency,whichpreviouslyoversawpostalandtelecommunicationsservices,beginsmonitoringthepowergridandgasmarket,partlyforsettlementofdisputesoverfeesrelatedtotherenewableenergynetwork.‐TheEuropeanUnionlaunchesitsemissionstradingsystem.‐Germanylaunchestheecologicaldirectivewhichregulatestheefficiencyofenergy‐consumingproducts(exceptbuildingsandcars).‐EnergyIndustryAct(EnergiewirtschaftsgesetzorEnWG).‐KfWfinancingbank’sprogramforsolarenergyproduction.‐Fifthenergyresearchprogram.

2006‐Kimazweiresearchprogramme(ResearchforClimateProtectionandReductionofClimateImpact).‐Foundationofsolarenergydevelopmentcentre.

2007Newgoals,policiesandsupportschemesforefficiencyandrenewableenergyaresetoutintheIntegratedEnergyandClimateprogramme.

2008 Raftoflegislationonclimatechangeandtheenergyprogram.

2009

‐FirstamendmenttotheEEGwithoutinputfromSocialDemocratsorGreens.ThenewlawfocusesincreasinglyonwhatChancellorMerkel’scoalitiongovernmentunderstandas"MBI".‐Lawonrenewableenergyforheatingpassed.Thisisthefirstlawtoexplicitlyaddressrenewableheatingandrequiresbuilderstouserenewableheatingsystems.‐AdoptionofEco‐designoftheLawonEnergy‐UsingProducts(ErP)incorporatingtheEuropeaneco‐designdirectiveinGermanlaw,renamedasthe2005EcologicalDirective.ImplementationoftheNationalElectricTransportDevelopmentPlan.‐KfWfinancingprogramforrenewableenergyandenergyefficiencyandrehabilitation(EnergieeffizientSanieren).

2010

‐ChancellorMerkel’scoalitiongovernmentdecides toextendtheworkinglifeofthe17remainingnuclearplantsby8and14years.‐Thebiomasssustainabilityordinanceaddressestheissueofsustainabilityofbiomassproduction.‐CreationoftheSpecialFundforEnergyandClimate,thefirstGermanefficiencyfund,whichisfinancedthroughcarbonemissioncertificates.Fundingishalvedasaresultofthelowpriceofthecertificates.‐NationalEnergyActionPlan.‐EnergyConcept.


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‐Biofuelquotalaw.

2011

‐TheaccidentattheFukushimanuclearplantcausesChancellorAngelaMerkeltoreconsiderherpositiononnuclearenergyandapprovethegradualclosureofnuclearpowerplants(Atomausstiegprogram)atafasterrateeventhanthatenvisagedinChancellorSchroeder’sprogram.Fortypercentofgenerationcapacityfromnuclearpowerplantsisswitchedoffinoneweekandclosureofthefinalplantisscheduledfor2022.‐TheGermanparliamentapprovesalawtoaccelerateexpansionofthenetwork.Thelawaimsnotonlytoexpandthenetworkbutalsotoupdateandoptimizeexistingnetworks.‐KfWfinancingforfirstoffshorewindfarm.‐NetworkExpansionActNetzausbaubeschleunigungsgesetz(NAGEB).‐"EnergyoftheFuture"monitoringprocess.‐Lawontheenvironmentandclimateandrenewableenergy.‐Sixthenergyresearchprogram.

2012

‐AdjustmenttotheRenewableEnergyAct(EEG)onphotovoltaicsolarenergy.InMay,Germanysetsanewworldrecordforsolarpowergeneration,50%ofdemand.‐InNovember,Germanenergyexportsreachtheirhighesteverlevel.‐Cogenerationagreementswithindustry.

2013‐InJanuary,therateforrenewableenergyincreasesto5.3centsperkWh.‐Germanenergyexportsincreasebyabout50%.

2014

‐Therateforrenewableenergyincreasesto6.3centsperkWh.‐AmendmentoftheRenewableEnergyAct(EEG)includingnetworkexpansionconsiderations,marketefficiencyandcapacityandreserves.‐NationalEnergyEfficiencyPlan(NAPE).

Source:Ownelaborationfrom(Morris&Pehnt,2012)


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13.5. APPENDIX5:PlansandfiguresonenergystructureinGermany

FIGURE28.Oilprospectingandproductionareas

Fuente:(BGR,2009)


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TABLE37.Listofrefineries

REFINERY LOCATION OWNERSHIP

BayernoilRaffineriegesellschaftmbH

Neustadt

VaroEnergyRefiningGmbH(45%)RuhrOelGmbH(25%)

EniDeutschlandGmbh(20%)BPEuropaSE(10%)

BPLingen Lingen BPEuropaSE(100%)BunaSOWLeunaOlefinverbund

GmbHlBöhlen DOWChemical(100%)

GunvorRaffinerieIngolstadtGmbH

Kösching GunvorGroupLtd(100%)

H&RChemisch‐PharmazeutischeSpezialitätenGmbH

Salzbergen H&RWASAGAG(100%)

H&ROelwerkeSchindler Hamburg H&RWASAGAG(100%)

HolbornEuropaRaffinerieGmbH HamburgHolbornInvestmentCompanyLtd.

(100%)

MiROMineraloelraffinerieOberrheinGmbH&Co.KG

Karlsruhe

ShellDeutschlandOilGmbH(32,25%)

EssoDeutschlandGmbH(25%)RuhrOelGmbH(24%)

Phillips66ContinentalHoldingGmbH(18,75%)

MitteldeutschesBitumenwerkGmbH Webau

MitteldeutschesBitumenwerkGmbH(100%)

NynasGmbH&CoKG Hamburg NynasAB(100%)OMVDeutschlandGmbH Burghausen OMV,Wien(100%)

PCKRaffinerieGmbHSchwedt

Schwedt

ShellDeutschlandOilGmbH(37,50%)

RuhrOelGmbH(37,50%)AETRaffineriebeteiligungsges.mbH

(25%)RaffinerieHeideGmbH Heide/Holstein Klesch&CompanyLtd.(100%)

RheinlandRaffinerieWerkGodorf Köln ShellDeutschlandOilGmbH(100%)RheinlandRaffinerieWerk

WesselingWesseling ShellDeutschlandOilGmbH(100%)

RuhrOelGmbH GelsenkirchenBPEuropaSE(50%)

RosneftHoldingsLimitedS.A.(50%)

Source:Ownelaborationfrom(AssociationofGermanPetroleumIndustry,2014)


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TABLE38.Listofmainoilpipelines

NAME SECTIONLENGTH(Km)

ANNUALCAPACITY(Mt)

MERO(MitteleuropäischeRohölleitungAG) Vohburg 343 10

MVL(MineralölverbundleitungGmbH)

Adamowo‐Schwedt

707 20

Schwedt‐Spergau 338 13.5Rostock‐Schwedt 201 6,8

NDO(NorddeutscheOelleitungsges.m.b.H.)

Wilhelmshaven‐Hamburg

144 8

NWO(Nord‐West‐OelleitungGmbH)

Wilhelmshaven‐Wesseling

391 16.3

RMR(Rhein‐Main‐

RohrleitungstransportgesellschaftmbH)

Rotterdam‐Ludwigshafen

525 12.5

RRP(N.V.Rotterdam‐Rijn,Pijpleiding

Maatchappij)

Rotterdam‐Wesseling

323 36

SPSE(SüdeuropäischeÖlleitung,Lavera‐Fos‐

Karlsruhe)Lavera‐Karlsruhe 770 35

TAL(DeutscheTransalpineOelleitungGmbH)

Triest‐Ingolstadt 75937currently(54at

finalstage)Ingolstadt‐Karlsruhe

27214currently(21at

finalstage)

Source:Ownelaborationfrom(AssociationofGermanPetroleumIndustry,2014)


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FIGURE29.Prospectingareasandgasfields

Source:(BGR,2009).


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FIGURE30.Subterraneaninstallationsforstorageofnaturalgas,crudeoil,oilproductsandliquefiedpetroleumgas

Source:(BMWi,2015d)


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Regionalrenewableenergygeneration

Themapsbelowshowrenewablegeneration(hydroelectricorbiomass)figuresforeachLänderorregion.

FIGURE31.Regionalhydroelectricandbiomassgeneration

Source:Ownelaborationfrom(Dombrowski,2014)


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Sankeydiagrams

Source:(IEA,2013)

GRAPH59.Sankeydiagram

ofGermanenergyconsumptionin2013


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Source:(IEA,2013)

GRAPH60.Sankeydiagram

ofGermanenergybalance


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13.6. APPENDIX6:Germancompaniesintherenewableenergiessector

ThetablebelowlistsGermancompaniesoperatingintherenewableenergiessectorinGermany.

TABLE39.Germancompaniesintherenewableenergiessector

COMPANY TECHNOLOGIES ACTIVITY BASEDIN

7CSolarparkenAG Manufacturerandsupplier Hamburg

abakussolarAG Supplierofintegral

solutionsGelsenkirchen

abcGmbHadvancedbiomassconcepts

Supplierofintegralsolutionsandplanner

Bremen

ABOWindGmbH&Co.KG Manufacturer Wiesbaden

actensysGmbH Manufacturer Ellzee

ADAGROsystemsGmbH&Co.KG ManufacturerVechta‐Calveslage

AgenpaGmbH Supplierofintegral

solutions,plannerandothers

Berlin

AgriKompGmbH Supplierofintegralsolutions

Merkendorf

AkoTecProduktionsgesellschaftGmbH

Supplierofintegral

solutions,plannerandothers

Angermünde

AleoSolarAG Manufacturer Prenzlau

AlfaSolarVertriebsgesellschaftGmbH

Manufacturer Hannover

ALGATECSolarwerkeBrandenburgGmbH

Manufacturerandsupplier Röderland

AlphaNewTechnologyServicesGmbH

Supplierandothers Berlin

AmmonitMeasurementGmbH Manufactureranddistributor

Berlin

AndritzHydroGmbH Supplierofintegralsolutions

Ravensburg

ANTARISSOLARGmbH&Co.KG Manufacturer,distributor

andsupplierWaldaschaff

:Wind:Hydroelectric:Geothermal:Photovoltaics:Thermalsolar

:Thermosolar:Biogas:Biomass:Storageandpowergrids:Otherenergysectors


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COMPANY TECHNOLOGIES ACTIVITY BASEDINANTECSolarGmbH Manufacturerandsupplier Arnstadt

A.P.BioenergietechnikGmbH Manufacturer Hirschau

ArinnaEnergyGmbH Manufacturerandsupplier Berlin

ASSolarGmbH‐FachgroßhandelfürSolartechnik

Manufacturerandsupplier Hannover

asolaTechnnologiesGmbH Manufacturerandsupplier Erfurt

AvailonGmbH Manufacturerandsupplier Rheine

AvancisGmbH Manufacturer Torgau

AvantisEnergyGroupGmbH Manufacturerandsupplier Hamburg

AVANCTECH‐RenewableEnergySystems

Manufacturer,distributorandsupplier

Barßel

AwiteBioenergieGmbH Supplier Langenbach

AZURSPACESolarPowerGmbH Manufacturer Heilbronn

BajuenergyGmbH Manufacturer,distributorandsupplier

Eberswalde

BARDHoldingGmbH Manufacturer Emden

BayWar.e.renewableenergyGmbH Supplierofintegralsolutionsanddistributor

Munich

BBBUmwelttechnikGmbH Consultant,evaluatorandplanner

Gelsenkirchen

BekarEuropeGmbH Manufactureranddistributor

Hamburg

BELECTRICSolarkraftwerkeGmbH Manufacturer,distributorandsupplier

Kolitzheim

BerlinWindGmbH Manufacturer Berlin

BIOFermGmbH Manufacturer Schwandorf

BionardoRepowerGmbH Supplierofintegralsolutionsandmanufacturer

Munich

BoschSolarEnergyServices Supplierofintegralsolutions

Arnstadt

C&DÖlserviceGmbH Manufacturer,distributorandsupplier

Oldenswort

CarbotechGmbH Manufacturer Essen

cebeEnergyGmbH Manufacturer,projectsdeveloperandplanner

Rehlingen‐Siersburg

CentrosolarGroupAG Manufacturer Munich




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COMPANY TECHNOLOGIES ACTIVITY BASEDINCEPPCapitalAG Supplierofintegralsolutions Berlin

CEPPInvestGmbH R&D Berlin

CISSolartechnikGmbH&Co.KG Manufacturerandsupplier Bremen

ConcentrixSolarGmbH Manufacturer Freiburg

ConergyAG Supplierofintegralsolutions Hamburg

ContiSolarGmbH Manufacturer Weingarten

CorporateEnergiesGmbH&Co.KG Supplierofintegralsolutionsanddistributor

Berlin

cp.maxRotortechnikGmbH&Co.KG

Supplierofintegralsolutions Dresden

CTSTandemSolarGmbH Manufacturer Chemnitz

CUBEEngineeringGmbH Consultant,projectsdeveloperandplanner

Kassel

DCHSolarGmbH Manufacturer Siegen

DeutscheEnergieversorgungGmbH Manufacturerandsupplier Leipzig

DeutscheWindtechnikAG Manufacturerandsupplierofintegralsolutions

Bremen

DeWindEuropeGmbH Manufacturer Hamburg

D.I.E.ErneuerbareEnergien Supplierofintegralsolutions,

plannerandprojectsdeveloper

Oppenheim

DirkHansenElektro‐undWindtechnikGmbH

Supplierofintegralsolutions Husum

DIVETurbinenGmbH&Co.KG Manufacturerandsupplier Amorbach

e:craftsystemsGmbH Supplierofintegralsolutionsandplanner

NöbdenitzOTLohma

EcofinConceptGmbH Manufacturerandsupplier Hückelhoven

EcostreamInternationalB.V. Manufacturer Köln

EEGService&TechnikGmbH Supplierofintegralsolutions Melle

EG‐Solare.V. Manufacturer Altötting

elgrisUG Supplierofintegralsolutions Aachen

Enercon Manufacturer Aurich

ENERLOGGmbH Manufacturerandsupplierofintegralsolutions

Wolfen

EnergiebauSolarstromsystemeGmbH

Manufacturerandsupplierofintegralsolutions

Köln




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EnergiequelleGmbH Manufacturerandsupplierofintegralsolutions

Bremen

EnergyCompetenceCentreGmbH Supplierofintegral

solutions,plannerandprojectsdeveloper

Berlin

ENERTRAGServiceGmbH Supplierofintegralsolutionsandplanner

Dauerthal

enoEnergyGmbH&Co.SilmersdorfKG

ManufacturerOstseebadRerik

EnviTecBiogasAG Supplierofintegralsolutions

Saerbeck

EuroSkyParkGmbH Supplierandothers Saarbrücken

EWSGmbH&Co.KG Manufacturer,distributorandprovider

Handewitt

ExToxGasmess‐SystemeGmbH Others Unna

F&SsolarconceptGmbH Manufacturerandsupplier Euskirchen

FARMATICAnlagenbauGmbH Supplier Nortorf

FENECONGmbH&Co.KG Manufacturerandsupplier Deggendorf

FichtnerGmbH&Co.KG Supplierofintegralsolutionsandprojects

developerStuttgart

FR‐FrankensolarGmbH Manufacturerandsupplier Nürnberg

FRANKGmbH Manufactureranddistributor

Mörfelden‐Walldorf

Fraunhofe‐InstitutforSolar(ISE)andWind(IWES)EnergySystems

R&D Freiburg

FWTenergyGmbH&Co.KG Supplierofintegralsolutionsandplanner

Weigandshain

GehrlicherSolarAG Manufacturerandsupplier Dornach

GEO‐NETUmweltconsultingGmbH

Consultant Hannover

GFCAntriebsSysteme Manufacturer Coswig

GICON‐GrossmanIngenieurConsultGmbH

Supplierofintegral

solutionsDresden

GMWassertechnik Manufacturerandsupplier BadAbbach

GrammerSolarGmbH Supplier Amberg




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GreenEnergyWorldGmbH Supplierofintegralsolutions,projectdeveloperandothers

Berlin

GUGLERGmbH‐HydropowerTechnology

Manufacturer Passau

HalioWindSystemsGmbH&Co.KG Supplier Haiger

HautecGmbH ManufacturerandsupplierBedburg‐Hau

Havelland‐SolarProjektGmbH&Co.KG

Manufacturer Nauen

HeckertSolarGmbH Manufacturerandsupplier Chemnitz

Heinz‐DieterJäkelREEGASGmbH Manufacturerandsupplier Berlin

HeliatekGmbH Supplier Dresden

HelioSolarGmbH Supplier Umkirch

HeosEnergyGmbH Manufacturer Chemnitz

HPCBIOSYSTEMSGmbH&Co.KGa.A.

Manufacturerandsupplier Berlin

HR‐EnergiemanagementGmbHHolzvergaserwerkstatt

Manufacturer,distributorandsupplier

Bünde

IBCSOLARAG Distributor,projectdeveloperandplanner

BadStaffelstein

IE‐SGmbHIntegratedEnergySystems

Supplierofintegralsolutionsandplanner

Leipzig

IMOAnlagenbauGmbH Manufacturer Merseburg

IndustrialSolarGmbH Manufacturerandsupplierofintegralsolutions

Freiburg

IngfeldGmbH Supplierofintegralsolutionsandplanner

Berlin

INTECEngineeringGmbH Manufacturer,distributorandsupplier

Bruchsal

IntersolarEurope2015 Others Pforzheim




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INTRAphotovoltaics Manufacturer,distributor

andsupplierBochum

JuwiAG Manufacturer Wörrstadt

K&SSolarsystemeGmbH Manufacturer Weikersheim

KACOnewenergyGmbH Manufacturer,distributor

andsupplierNeckarsulm

KBBKollektorbau Manufacturer Berlin

KenersysGmbH Manufacturer,distributorandsupplier

Münster

KGWSchwerinerMaschinen‐undAnlagenbau

Manufacturer Schwerin

KIKASunSolutionGmbH Manufacturer,distributor

andsupplierMunich

KOSTALSolarElectricGmbH Manufacturer Breisgau

KrannichSolarGmbH&Co.KG Manufacturer,distributor

andsupplierWeilderStadt

LahmeyerInternationalGmbH Supplierofintegral

solutions,plannerandprojectdeveloper

BadVilbel

LambionEnergySolutionsGmbH Manufacturer,projectdeveloperandplanner

BadArolsen

LTBHochsauerlandGmbH Supplierofintegralsolutions

Lichtenau

LTiREEnergyGmbH Manufacturerandsupplier Unna

M+WZanderFEGmbH Manufacturer Stuttgart

MANAGESSEnergyGmbH Supplierofintegral

solutions,plannerandprojectdeveloper

Erfurt

MareSolarMarcReißSolartechnik Supplieranddistributor Berlin

MasdarPVGmbH Manufacturer Ichtershausen

MHHSolartechnikGmbH Manufacturerandsupplier Tübingen

MMM‐WindtechnikGmbH Supplierofintegralsolutions

Crimmitschau

MolaSolaireProduktionsGmbH Manufacturerandsupplier Hamburg

MSSMolaSolarSystemsLtd.&Co.KG

Distributor Duisburg

Natcon7GmbH Manufacturer Hamburg

NoltingHolzfeuerungstechnikGmbH

Manufacturerandprojectdeveloper

Detmold

NordexSE Manufacturer Hamburg

N.T.E.S.GmbHWINDKRAFTSERVICE

Manufacturerandsupplierofintegralsolutions

Bremervörde




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COMPANY TECHNOLOGIES ACTIVITY BASEDINOBAGBioEnergyAnlagenbau

GmbH Manufacturerandsupplier Bautzen

OneShoreEnergyGmbH Manufacturer Berlin

OssbergerGmbH+Co Manufacturerandprojectdeveloper

Weiβenburg

ParkerHannifinManufacturingGermanyGmbH&Co.KGHiross

ZanderDivision Manufacturer Essen

PerfectEnergyGmbH Manufacturer BadHonnef

PhaesunGmbH Distributor,plannerandprojectdeveloper

Memmingen

PhoenixSolarAG Manufacturerandsupplierofintegralsolutions

Sulzemoos

PhocosAG Manufacturer Ulm

PlanETBiogastechnikGmbH Supplierofintegral

solutions,manufacturerandplanner

Vreden

PlanungsbüroSolarForm Planner Hannover

PNEWindAG Manufacturer Cuxhaven

PowerWindGmbH Manufacturerandsupplierofintegralsolutions

Hamburg

ProtargetAG Manufacturerandsupplier Köln

PSEEngineeringGmbH Manufacturer Hannover

psmGmbH&Co.KG Supplierofintegralsolutions

Erkelenz

PV‐ProjectsAgency– ProjectforSustainableDevelopment–Global

MarketingofPV

Supplierofintegralsolutionsandproject

developerBerlin

PVflexSolarGmbHHerstellervonSolarzellenundSolarmodulen

Manufacturerandsupplier Fürstenwalde

REFUElektronikGmbH|REFUEnergy

Supplierofintegralsolutions

Pfullingen

RenergiepartnerGroup Operator,projectsdeveloperandothers

Berlin




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RenertecGmbH Manufacturerandsupplier

ofintegralsolutionsBrachttal

RenewablesAcademyAG(RENAC) Trainingcentre,consultancyandothers

Berlin

RenusolGmbH Manufacturer Köln

RitterEnergie‐undUmwelttechnikGmbH&Co.KG

Manufacturerand

distributorDettenhausen

RoSchIndustrieserviceGmbH Consultant Lingen

RotoSunroofVerwaltungGmbH Manufacturerand

distributorBad

Mergentheim

RotorControlGmbH Supplierandconsultant Struckum

RUFMaschinenbauGmbH&Co.KG Manufactureranddistributor

Zaisertshofen

RuSiTecGmbH Manufactureranddistributor

Bremerhaven

S‐powerEntwicklungs&VertriebsGmbH

Manufacturer Meppen

Schlaichbergermannundpartner,sbpsonneGmbH

R&Dandconsultant Stuttgart

SchmackBiogasGmbH Supplierofintegralsolutions

Schwandorf

SchmidSiliconTechnologyGmbH Manufacturerandsupplier Freudenstadt

SCHNELLMotorenAG Manufactureranddistributor

Amtzell

SCHOTTSolarAG Manufacturerandsupplier Mainz

SchützGmbH&Co.KGaA Manufacturerandsupplierofintegralsolutions

Selters

SeilpartnerWindkraft Supplierofintegralsolutions

Berlin

SENSolareEnergiesystemeNordVertriebsgesellschaftmbH

Manufacturerandsupplier Grasberg

SenvionSE Manufacturer Hamburg

Service4WindGmbH&Co.KG Supplier,consultant,evaluatorandplanner

Osnabrück




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SES21AG Manufacturer Polling

SHWStorage&HandlingSolutions Supplier,consultant,evaluatorandplanner

Hüttlingen

SiemensAG Supplierofintegralsolutions,manufacturer,R&Dand

supplier

Berlin,MunichandErlangen

sinoPARTNERTechnologieAG Manufacturer Bretten

skytronenergyGmbH Manufacturer,distributorand

supplierBerlin

SMASolarTechnologyAG Manufacturer Niestetal

SmartEnergysystemsInternationalAG

Supplierofintegralsolutions Karlsruhe

Solar‐FabrikAG Manufacturer Freiburg

SOLARCInnovativeSolarprodukteGmbH

Manufacturer,distributorand

developerBerlin

SolarionAG ManufacturerandsupplierZwenkauand

Dresden

SolarnovaDeutschlandGmbH Manufacturer Wedel

SolarschmiedeGmbH Manufacturerandsupplier Munich

SolarSpringGmbH Manufacturerandsupplier Freiburg

SolarTecInternationalAG Manufacturer Aschheim

SOLARWATTAG Manufacturer Dresden

SolarWorldAG Manufacturer Bonn

SolarzentrumAllgäue.KGmbH&Co.KG

SupplierBiessenhofe

n

SoleaCapitalGmbH ManufacturerandsupplierUnterhachi

ng

SolemioGmbH Manufacturerandsupplier Vogtsburg

SOLEOSSolarGmbH Manufacturer Bornheim




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SollandSolarCellsGmbH Manufacturer Aachen

SOLVISGmbH&Co.KG Manufacturerandsupplier Braunschweig

SoMaSolarHoldingGmbH Manufacturerandsupplier Ellzee

SonnenbatterieGmbH Manufacturer Wildpoldsried

SpeedwindGmbH Supplierandconsultant Helmstedt

StecaElektronikGmbH Manufacturerandsupplier Memmingen

STELALaxhuberGmbH Manufacturer Massing

STISolar‐Technologie‐InternationalGmbH

Manufacturerandsupplier Meerane

STIEBELELTRONGmbH&Co.KG Manufacturer Holzminden

SunEnergyEuropeGmbH Consultant,evaluatorandplanner

Hamburg

SunovationGmbH Manufacturerandsupplier Elsenfeld

SunsetEnergietechnikGmbH Manufacturer Adelsdorf

SunWareSolartechnikProduktionsGmbH&Co.KG

Manufacturerandsupplier Duisburg

SystaicAG Manufacturerandsupplier Düsseldorf

TembraGmbH–WindTurbineDevelopment

Manufacturer Berlin

Torres&Cie.ConsultingInternational

Supplierofintegralsolutionsandproject

developerMünster

UTWDienstleistungsGmbH Supplierandplanner Hamm

ValentinSoftwareGmbH Manufacturer Berlin

VensysEnergyAG Manufacturerandsupplier Neunkirchen




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VertriebvoninnovativenEnergiesparsystemen

Distributor Kesselsdorf

Viessmann SupplierofintegralsolutionsAllendorf(Eder)

VoithHydroHoldingGmbH&Co.KU

Supplierofintegralsolutions Heidenheim

Wagner&CoSolartechnikGmbH Manufacturerandsupplier Cölbe

WebastoSolarGmbH Manufacturerandsupplier Stockdorf

WELTECBIOPOWER Supplierofintegralsolutions VechtaWindigoGmbH Manufacturerandsupplier Berlin

WindwärtsEnergieGmbH Consultant,evaluatorandplanner

Hannover

WolfGmbH Manufacturer Mainburg

WSBNeueEnergienHoldingGmbH Supplierofintegralsolutions Dresden

WulfmeierSolarGmbH Manufacturerandsupplier Bielefeld

WürthSolarGmbH&Co.KG SupplierSchwäbisch

Hall

YandaluxGmbH Manufacturerandsupplier Hamburg

ZOPFEnergieanlagenGmbH Manufacturerandsupplier Leipzig



Source:Ownelaborationbasedon(BSW&SolarpraxisAG,2010)(BWE,2015)(DENA,2013),(DENA,2014),(ENFSolar,2015),(GorozarriJiménez,2012)and(Posharp,2015)


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AUTHORS

EloyÁlvarezPelegry

DirectoroftheEnergyChairofOrkestra‐BasqueInstituteofCompetitiveness.

PhDinMiningEngineeringfromtheHigherTechnicalSchoolofMiningEngineering,Madrid,primarydegreeinEconomicandBusinessSciencesfromtheComplutenseUniversityofMadridanddiplomainBusinessStudies fromtheLondonSchoolofEconomics(“withmerit”).

Throughouthiscareer,EloyÁlvarezPelegryhasworkedintheenergysector,inboththebusinessandacademic field.HehasworkedatElectradeViesgo,EnagásandCarbonesdeImportación.From1989to2009hewasemployedintheUniónFenosaGroupwhere,amongotherposts,hewascorporatedirectorofQuality,EnvironmentandR&D; Fuels; Planning, Economy andControl andGeneral Secretary ofUniónFenosaGas.

HeiscurrentlyamemberoftheRoyalAcademyofEngineering(RAI).Hehasbeenan associate professor of Business Economy in the Higher Technical School ofMiningEngineeringofMadrid;EconomicAnalysisattheComplutenseUniversityofMadridandAcademicDirectoroftheSpanishEnergyClub.

Heistheauthorofthebook“EconomíaIndustrialdelSectorEléctrico.EstructurayRegulación”andco‐editorofthebook“ThefutureofEnergyintheAtlanticBasin”incollaborationwithJohnHopkinsUniversity.Hehasalsoeditedthebooks“Losretosdel sector energético”, “Hacia una economía baja en carbono” and “Energía ytributaciónambiental”.Hehaspublishedmorethanforty‐fivearticlesanddeliveredmorethanonehundredlectures.

He is also amember of the Studies Committee of theWorldEnergyCouncil, theEnergyGroupoftheRoyalElcanoInstituteandtheworkgroupsoftheEuropeanScienceandTechnologyNetworkonUnconventionalHydrocarbonExtraction(W1andW2).

IñigoOrtizMartínez

CollaboratorwiththeEnergyChairofOrkestra‐Basque,InstituteofCompetitivenessintheUniversityofDeusto.PrimarydegreeinIndustrialTechnologiesandMaster’sdegreeinIndustrialEngineeringfromtheUniversityofDeusto.Duringhistimeatuniversityheworkedwith a grant in collaborationwithDeustoTechEnergy, theenergydepartmentoftheDeustoInstituteofTechnology.HeiscurrentlyaprojecttechnicianatF.Iniciativas.


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JaimeMenéndezSánchez

Mining Engineer andMajor in Energy by the University of Oviedo. Heworks asresearch assistant in the Energy Chair,where he has participated in the projectabout“EnergyandIndustrialTransitions”.PartofhisstudieswerecarriedoutintheTechnicalUniversityofOstrava(CzechRepublic)throughanErasmusgrant.ThiswasfollowedbyagrantbyEDPforaninternshipinthatcompany,particularlyintheDepartmentofEnvironment,Sustainability, InnovationandQuality,whereheparticipated in the development of the Lean Programme and other activities. In2015hewasawardedwith theCEPSAPrize for thebestDegreeFinalProjectonExploitationandExplorationofHydrocarbons.

C/HermanosAguirrenº2

EdificioLaComercial,2ªplanta

48014Bilbao

España

Tel:944139003ext.3150

Fax:944139339

www.orkestra.deusto.es