the german energy market - current state and issues export-oriented companies based in germany with...

THE GERMAN ENERGY TRANSITION − BUSINESS OPPORTUNITIES FOR THE POWER AND ENERGY INDUSTRIESFEBRUARY 2018

Claus HabermeierGermany Trade & Invest

© Germany Trade & Invest www.gtai.com 2

Who we are

Foreign trade and inward investment agency of the Federal Republic of Germany

Shareholder


“Marktbeobachtung”

Support export-oriented companies based in Germany with comprehensive foreign market information.

Investor Aquisition

Consult potential foreign investors in terms of their expansion plans and execute the required project management support in Germany.

Promote the economic development of the new federal states. (Aufbau Ost)

Location Promotion

Promote Germany abroad as a leading economy and technology location in order to attract investors who infuse equity and/or create (or secure) jobs in Germany.

A three-fold mandate:

GTAI – the Agency


Project Management Assistance

Location Consulting/Site Evaluation

Project partner identification and contact

Business opportunity analysis and market

research

Market entry strategy support

Joint project management with regional development

agency

Coordination and support of negotiations

with local authorities

Final site decision support

Site preselection

Identification of project-specific location factors

Cost factor analysis

Site visit organization

Organization of meetings with legal advisors and financial

partners

Identification of relevant tax and legal issues

Project-related financing and

incentives consultancy

Administrative affairs support

Accompanying incentives

application and establishment

formalities

Decision & InvestmentEvaluationStrategy

Support Services

GTAI – Investor AcquisitionGermany Trade & Invest is a “one-stop agency” supporting the investor closely and facilitating every stage of the decision-making process


Development of Renewable Energy Systems

Sources: 50HertzT, TenneT, Amprion, TransnetBW, internal data

Total capacity of renewables(End 2000)

~ 30,000 installations

Wind energy

PV

Biomass

The circle diameter is proportionalto the electrical capacity



Wind energy

PV

Biomass




Wind energy

PV

Biomass



> 1.600.000 installations

Wind energy

PV

Biomass


Feed-in-Tariff created dynamic growth


The German Electricity MarketOff-shore Wind Recognized for High Potential

Energy Source Share of Installed Capacity (2015)

Full Load Hours of Power Plant Types (2016*)

Sources: Bundesnetzagentur 2016, *BDEW 2014 *Preliminary values (State 27.03.2017), BDEW

7410

6610

5810

3690 36003170

2690

15001200 940 940

Nuc

lear

Pow

er

Lign

ite

Biom

ass

Hydr

opow

er

Hard

Coa

l

Win

d Po

wer

(offs

hore

)

Nat

ural

Gas

Win

d Po

wer

(ons

hore

)

Oil

Pum

ped

Stor

age

Phot

ovol

taic

s

1 Year: 8,760 h

Nuclear Power5.4%

Lignite13.6%

Hard Coal10.5%

Natural Gas14.3%Oil, Pump

Hydro and Others9.3%

Biomass and Waste3.9%

Hydro-power2.8%

Wind Power (Onshore)

19.3%

Wind Power (Offshore)

1.4%

Photo-voltaic19.5%

Total: 200 GW Annual peak load: app. 80 GW Wind & PV: 80 GW


Goals of Renewable Electricity ConsumptionDevelopments on target

Renewable’s share on Germany’s gross electricity consumption vs. goals of German Energiewende

Sources: BMWi, 2017

00%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1998 2002 2006 2010 2014 2018 2022 2026 2030 2034 2038 2042 2046 2050

Renewable’s share on Germany’s gross electricity consumption

Goals of German Energy Concept (as of 2011)

35% until 2020

50% until 2030

65% until 2040

80% until 2050

32% in 2016


More renewablesdemand

more digitalization


Smart Meter Roll-OutSmart metering systems to be rolled out in Germany from 2017

New draft law “Digitizing the Energy Transition”:

Source: Landis + Gyr

• Smart Metering System (SMS) = Electronic Meter + Secure Communication Gateway

• Electronic meters new standard in 16-year meter replacement cycle for all users

• Mandatory roll-out of full SMS starts 2017 with large users > 10,000 kWh/a and producers with installed capacity between 7 and 100 kW

• From 2020 possibility to require other consumers and producers to install SMS

• Price ceilings apply when equipment is installed

• SMS can always be fitted on a voluntary basis


The German Smart Meter Roll-Out just startedPotential for 3 million new smart meters starting in 2017. From 2020 further 47 million. Thereof only ~150k installed today.

Smart Meters to be rolled out until 2032(Number of units)

Source: BMWI 2016

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Producers (CHP & Renewable Energy plants >7 kW) Consumers > 10 MWh/a Consumers < 10 MWh/a


The Smart Grid Market OverviewNew power structures will lead to bottle necks in Germany as the new generation centers will be far from load centers

Source: Bundesnetzagentur 2016

Power balance 2014 Power balance 2024

[MW] [MW]

2014-2024

[MW]


European Grid Extension projectsTen-Year Network Development Plan 2016

Source: TYNDP 2016 Ten-year network development plan ENTSO-E

TYNDP 2016 investment portfolio –breakdown per year of commissioning

• € 150 billion grid expansion proposed by the TYNDP 2016

• Enhanced market integration will reduce bulk power prices by 1.5 to 5 €/MWh

Pan-European Significance investments – mid- and long-term horizon

Source: ENTSO-E 2016


More renewablesrequire

more energy storage


Energy Storage: many use cases in GermanyProviding grid services, helping industry reduce grid fees, and households increase their own-consumption of cheap PV energy.

Courtesy: Younicos GmbH/Wemag AG, Tesvolt GmbH, Sonnen GmbH

Utility Industry Private

Control Power

Redispatch

Black-start capability

Reduction of grid fees by reducing or shifting Pmax

Increased own-consumption from PV

Increased own-consumption from PV

Special electricity rates for battery swarms


Base and Peak Price Development EEX Spot MarketFormer business model for energy storage

Source: European Power Exchange, bricklebrit.de


Installed Primary Control Power CapacityGrowing market with increasing fluctuating renewables

*preliminary figures; Note: no claim for completeness

Total large-scale batteries in GermanyPower capacity [MW]

2

10

156

15

10

5

515

5

1.6

2

15

3

2

15151513

10

48

11.5

5050

Hybrid: Li-Ion + X

Li-Ion

Li-Ion second life

Lead-acid

15 battery capacity in MW

?

22 48

218

341*

0

50

100

150

200

250

300

350

400

0

20

40

60

80

100

120

140

160

180

200

2012-2015 2016 2017 2018(announced)


Market explosion for stationary batteriesStrong growth for private PV-batteries and large-scale grid batteries

Note: * average system size: 6.8 kWh; ** anticipating 1C (1 MW = 1 MWh)Source: RWTH 2017, BSW 2017

Installed capacity of PV-battery systems(MWh*)

Battery capacity for Primary Control Power(MWh**)

0

100

200

300

400

500

600

2013 2014 2015 2016 2017

75-85k PV-battery systems expected by

end of 2017.

0

100

200

300

400

500

600

2013 2014 2015 2016 2017

Further 123 MW already in pipeline

for 2018.

© Germany Trade & Invest www.gtai.de 18

Development of Renewable Energy CurtailmentLong term energy storage technologies are needed

127421 385

555

1581

4722

10 33 33 44 83315

0

1000

2000

3000

4000

5000

2010 2011 2012 2013 2014 2015

GWh Mio. €

87%

8%5%

wind energy biomass solar energy

Source: German Federal Network Agency, Monitoring report 2016Source: German Federal Network Agency, Monitoring report 2011-2016


Example: Audi e-gas plant in WerltePlant prequalified for secondary control power

Source: Audi AG

Goals

• Demonstration of the process chain

• Optimize operational concept (fluctuating power from wind vs. changing gas feed)

• Gain experience in technology, costs and consenting

Key Parameters

• Project name: Audi e-gas Projekt

• Input power: 6 MWel

• Hydrogen production: 1.300 m³/h

• Start of operation: 25.06.2013

• Owner: Audi AG

• Carbon dioxide source: a biogas plant

Partner

• SolarFuel GmbH

• Zentrum für Sonnenenergie und Wasserstoff-Forschung

• Frauenhofer Institut für Windenergie und Energiesystemtechnik

• EWE Energie AG


H2 Mobility action plan until 2023Construction of a Hydrogen Refueling Network in Germany until 2023

TARGETS:

400 HRS until 2023 ( 100 HRS until 2017)

350 mio. € investment

Max. 90 km distance between two HRS at

the motorway

10 HRS in each metropolitan area

Source: NOW

Partner:

Associated Partner:


National Innovation Program II (NIP II)With NIP II, the German government continues to facilitate R&D and market launch activities in the area of fuel cells and hydrogen

Note: For more detailed insight and whether your company is eligible for funding, please ask your GTAI expert. Source: Federal Ministry of Transport and Digital Infrastructure 2016.

Funding for the following fields of activity:

Infrastructure for emission-free

transport

Stationary applications:

combined heat and power units

Support of supplier industry

Fundamental research for the next generation of fuel cells and

hydrogen technologies

The use of fuel cells for securing

critical infrastructure

Governmental funds: up to €1.4 bn between 2016 and 2026

60% of funds for market activation activities

40% of funds for activities in the field of R&D,

demonstration and market entry preparation


More renewablesoffer

cheaper electricity for heat & vehicles


Sector coupling: strong growth for Electric VehiclesOnly 0.73% of newly registered vehicles were Plug-in Hybrids or Battery Electric Vehicles in 2016

Sources: IEA 2017, BDEW 2017

Electric Vehicles (PHEV + BEV) in Germany(Number of vehicles, 2011 – 2016)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16


…and for Public Charging StationsAcute demand for public charging stations. These will potentially also be equipped with batteries – as well as with smart grid technologies

Sources: IEA 2017, BDEW 2017

Electric Vehicles (PHEV + BEV) vs. Public Charging Stations(Number of units, 2011 – 2016)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16

Electric Vehicles Public Charging Points


SINTEG – New Smart Energy ProgramEUR 600* Million for 5 showcase regions from 2016 to 2020

1. C/sells: interconnected, regional energy systems with cellular structure and focus on PV integration that balance each other

2. Designnetz: decentralized renewable power supplied flexibly to urban and industrial load centers

3. Enera: Stabilizing the grid by improved measurement and data analysis coupled with new market mechanisms

4. NEW 4.0: Maximizing the efficient use of regional wind power overproduction by flexible demand response and inter-regional trade in electricity

5. WindNODE: Sectors electricity, heat, and mobility are integrated to flexibly accomo-date fluctuating regional wind power

Source: BMWi, 2016 *Including EUR 230 million state support

FRANKFURT

STUTTGART

MUNICH

HAMBURG

DÜSSELDORF DRESDEN

BERLIN

2

3

5

1

4


Contact

Germany Trade & Invest

Claus Habermeier

Director at Germany Trade and Invest

New York Office

80 PINE ST FL 24

New York, NY 10005-1732

Tel: +1 (212) 584 9715

E-mail: [email protected]

Germany Trade & InvestForeign Trade and Inward Investment Promotion Agency

Energy Storage – Smart Grid

Heiko StaubitzSenior ManagerFriedrichstr. 6010117 BerlinT +49 (0)30 200 099-226

[email protected]

Supported by the Federal Ministry for Economic Affairs and Energy on the basis of a decision by the German Bundestag.

the german energy market - current state and issues export-oriented companies based in germany with...

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