IEEJ: June 2012 All Right Reserved

German Energy Transition –Opportunities and challenges
IEEJ - Japan Energy Policy Debate
Tokyo, 22./23. March 2012

Holger Gassner
Head of Markets and Political Affairs

RWE Innogy GmbHIEEJ: June 2012 All Right Reserved

Agenda

1. Political Framework and decisions
2. Opportunities and Challenges
3. Conclusion and Outlook

PAGE 2IEEJ: June 2012 All Right Reserved

The EU Roadmap shall define a cost-efficient pathway
towards carbon reductions by 2050
Pathway towards 2050 - forecasts>

According to Roadmap 2050, 80%
domestic reduction in 2050 could
be feasible:
With currently available technologies

100%100%

80% Power Sector

80%Current policy>With behavioural change onlyinduced through prices

60%

If all economic sectors contributeto a varying degree & pace

Efficient pathway:

-25% in 2020

-40% in 2030

-60% in 2040

Source: European Commission, DG Climate Action

Residential & Tertiary

60%

Industry
40%

40%
Transport

20%

20%
Non CO2 Agriculture

Non CO2 Other Sectors
0%
1990
2000
2010

2020

2030

2040

0%
2050

RWE Innogy | March 2012

Page 3IEEJ: June 2012 All Right Reserved

Political decisions taken in Germany> In October 2010 the Government tabled a new Energy concept.
This builds a framework towards the 2050 energy supply with
ambitious targets on carbon emission reductions and increase inrenewable energies.
> In March 2011 the Government decided to rethink the role ofnuclear energy within the energy concept. Immediately 8 nuclear
power stations were taken from the grid.
> In summer 2011 a big package of laws and legislations passed theParliament to foster the goals of the energy concept and to close
all nuclear stations by 2022.

RWE Innogy | March 2012

Page 4IEEJ: June 2012 All Right Reserved

The Energy Concept of the German Federal
Government: main objectives
More renewables, less emissions%10080806550603540
20Growing share of renewables of 60% ingross final energy consumption by 2050
- 25%

60
- 50%

4530

- 80%
bis - 95%

1802020

2030

2040

Growing share of renewables of 80% ingross electricity consumption by 2050
(to date 15%)
Reduction of gross electricity
consumption by 25% until 2050
(baseline 2008)

2050

Share of renewables in grossfinal energy consumption

Electricity consumption (100%= 2008)*

Share of electricity generationfrom renewables in grosselectricity consumption

Primary energy consumption (100%= 2008)*

Reduction of primary energy
consumption by 50% until 2050
(baseline 2008)

Greenhouse gas emissions (100%=1990)

Reduction of GHG by 80% - 95%(baseline 1990)* Concrete data only available for the years 2020 and 2050
RWE Innogy | March 2012

SEITE 5IEEJ: June 2012 All Right Reserved

According to the energy concept the German
electricity supply has to be reconstructed completelyElectricity
Generation2008
100%Efficiency
gains until2050

very ambitious assumptions and cornerstones
underlying in the energy scenarios
Electricity
demand2050

Imports toGermany
2050
Generation inGermany
2050

92,3 TWhrenewables
out of637,3 TWh
total generationin Germany

Decrease of generation in Germany by a half

Tripling generation from renewablesNonrenewable
generation
2050

Renewable
Generation = 80% ofGerman2050
generation 2050
285,2 TWhrenewables outof 352,6 TWh
total generation

Bruttostromerzeugung gemäß Tabelle A I-7, Szenario II A, Energieszenarien EWI, GWS, Prognos
RWE Innogy | March 2012Seite 6IEEJ: June 2012 All Right Reserved

Absolute production targets for renewables for 2050 areambitious
Electricity generation from renewable energies 1990 until 2050 (TWh)

300

300

5250

39250+ 18.300%

200150+ 225%
+ 35%

150+ 43%

6,441

Photovoltaic

56,3Biomass

Other*

Wind energy

100Onshore wind100
5050+ 364%

113+ 24%

24,5Offshore wind

2010

2007

2005

2003

2001

1998

1994

02050

Hydro1990

TWh200

Geothermal> Targets for hydro, biomass, on- and offshore wind are acceptable> Photovoltaic possible, but due to inefficiency and high costs critical
Source:Daten bis 2010: BMU; Daten 2050: Energieszenarien nach EWI, GWS, Prognos
RWE Innogy | March 2012

* Andere: BMU: Biogener Anteil des Abfalls; EWI, GWS, Prognos: Biogener Müll, Klär- und Deponiegas

IEEJ: June 2012 All Right Reserved

The Share of Renewables in Power Generation in Germany is supposed
to grow from 17% in 2010 to 55% to 2030
Gross power generation by energy carriers 2010
2030 (in TWh)

Hard coalLignitePump storage

Nuclear powerGasOthers1)

Source: BMWI; Energy scenarios 2011

PetroleumWindBiomass

HydroSolarGeothermal2)
Other Renewables3)

1) Waste, mine gas und other non-reneables according to dthe definition of AGEB
2) Geothermal: 2,0 TWh
RWE Innogy | March 20123) Other renewable fuels: 7,0 TWh

IEEJ: June 2012 All Right ReservedUtilities focus more on renewable energies
Example: RWE founded new company with focus on wind,hydro and biomass while also supporting new technologies
Onshore Wind

Offshore Wind

Hydro

Biomass

New Technologies> Established in February 2008

> Bundling renewables activities and competencies across RWE Group> Focus on capacity growth in commercially mature renewable technologies,i.e. wind, biomass and hydro> Research & Development and Venture Capital to drive the development of emerging technologies,e.g. solar, geothermal, marine> Focus on Europe: Asset portfolio of 2.4 GW in operation and 1.2 GW under construction mainly locatedin United Kingdom, Germany, Spain, Netherlands, Italy and Poland *RWE Innogy | March 2012

PAGE 9IEEJ: June 2012 All Right ReservedAgenda

1. Political Framework and decisions
2. Opportunities and Challenges
3. Conclusion and Outlook

PAGE 10IEEJ: June 2012 All Right Reserved

Challenges and Solutions

Main challenges:

Possible options:> Integration of fluctuating
generation from wind and solar.

> Grid extension> Ensure security of supply.
> Ensure economicalcompetitiveness of industry.
> Ensure payable energy for theconsumer.

> Flexible generation withconventional power plants> Increase storage capacities> Smart grids and demand side
management> Be cost effective

RWE Innogy | March 2012

SEITE 11IEEJ: June 2012 All Right Reserved

Discontinuous Wind- and PV-feed-in make the energy
turnaround becoming a challengeGWGW

25

14
1220

10
15

max: 22.656 MW
04.02.2011, 19:00

10

min: 140 MW
20.05.2011, 10:00

5

max: 13.096 MW
09.05.2011, 12:00

6

min: 592 MW
01.01.2011, 12:00

403.02.2011 - 05.02.2011

19.05.2011 - 21.05.2011

0

00:00
03:00
06:00
09:00
12:00
15:00
18:00
21:00
00:00
03:00
06:00
09:00
12:00
15:00
18:00
21:00
00:00
03:00
06:00
09:00
12:00
15:00
18:00
21:00

2
00:00
03:00
06:00
09:00
12:00
15:00
18:00
21:00
00:00
03:00
06:00
09:00
12:00
15:00
18:00
21:00
00:00
03:00
06:00
09:00
12:00
15:00
18:00
21:00

0808.05.2011 - 10.05.2011

31.12.2010 - 02.01.2011

Only in the first half of 2011 variations of wind-feed-in of 23 GW and of PV-feed-in of 13
GW could be regarded.
Source: RWE Supply&Trading, MLT-VW
RWE Innogy | March 2012

SEITE 12IEEJ: June 2012 All Right Reserved

All existing conventional power plants contribute to integrate
and balance the renewable generation%

Ability of conventional power plants to change
their load:
MW
1200

Nuclear power

1000

Maximum~1260 MW

Minimum~630 MW

Gradient+/- 63 MWMin

800

New coal power plants

600

EEG-Windenergie-Einspeisung in Deutschland im Januar 2009,
Tagesminima und Tagesmaxima der 1/4-Stunden-Leistungsprofile
Stand: 10.02.2009

Maximum~800 MW

Minimum~320 MW

Gradient+/- 26 MW/Min

Wind injections January 2009

Leistung in MW
20000
18000
16000

Maximum~600 MW

Minimum~420 MW

Gradient+/- 8 MW/Min

14000

400

Existing coal power
plants

200

12000
10000

Maximum~875 MW

8000

Minimum~260 MW

6000

Gradient+/- 38 MW/Min

4000

New CCGT power plants

0Min

2000
0051015202530

1234567891011 1213 1415 16 1718 19

20 2122 23 24 25

26 27

28 29

30 31

Datum (Januar 2009)

RWE Innogy | March 2012

SEITE 13IEEJ: June 2012 All Right Reserved

In general the high voltage grid must be extended especially after the shut down of the nuclear stations
Current
Future capacity
capacity balancebalance

German high voltage grid

Offshore wind farms

++

2011
2021
2011

++

2021

2022

!

Conventional
power plants

2011

!
2011
2011
2011

2015

Abandonmentof powerplants

2011
2011
2022
2019
2017

!

-2022

2021

Network expansion project up to 2015 (dena I)

Operative NPP

Increased grid bottlenecks expected
Abandoned NPP

RWE Innogy | March 2012

SEITE 14IEEJ: June 2012 All Right Reserved

Nuclear phase-out and more renewable energies increase
regional grid bottlenecks – 4,450 km new lines are needed
Grid extension identified by DENA grid study I und II
Necessary grid extension (in km)
4.450

3.600

3.600
636
214*
Bisher
So far realisiert
realised

760
Residual demand
Verbleibender
Bedarfaccordingto DENAI
nach DENA
I

35 km / year

2005

Additional
demandZusätzlicher
Bedarfaccordingto DENA
nach DENA
II II

DENA I + II

470 km / year

2011

2015time

2020> For building 3600km of high-voltage line 12.000 masts have to be erected.
> Since 2005 the grid has been extended by approx. 35 km per year. In the coming nine years approx.
470 km per year have to be realised.
* Source: BNetzA, monitoring report 2011

RWE Innogy | March 2012

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IEEJ: June 2012 All Right Reserved

Actually insufficient capacity of German North Sea grid is themain barrier for Offshore-growth

RWE Innogy | March 2012

SEITE 16

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Challenge: Fluctuating generation must be integrated to keep thelevel of security of supply
20.00018.000I. Huge fluctuation margin,temporal power surplus in the future

16.000Total installed wind capacity: 24,817 MW (01/12/2009)
24.000II. Extremelyhuge load
gradients

12.00010.00020.000Wind Power [MW]Wind Power [MW]14.00016.00012.000

8.000

4.000

8.000
0Jan

Feb

Mrz

Apr

Mai

JunJulAug

Sep

Okt

Nov

Dez

2008
2008

6.000

III. Long calms must be bridged

4.000
2.000
002.02.

Data Source: ISET

03.02.

04.02.

05.02.

06.02.

07.02.

2009
Pumped storage capacity available in Germany to date

RWE Innogy | March 2012

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Different storage technologies are discussed

Adiabatic air storage

Pump-storage

RWE Innogy | March 2012

SEITE 18

IEEJ: June 2012 All Right Reserved

Perspectively a 313-times enlargement of pumpstorage capacity (compared to today) would benecessary
TWhGross electricity
consumption
Germany
10 days lack ofwind (in winter)

Dec
Capacity of pumpstorage Germany
Currently installedcapacity matches
approx. 7.000
MW. Pump
storage capacity
can bridge aperiod of 6 hours.

450JulIn case of 10days lack ofwind, 313 times
the current
pump storage
capacity isneeded tobridge the calm.

x 313
12,52050

12,5*

0,04

12,52050

2010

2050

Jan19902010
Low wind period from
10-12 days
Low wind period> 12 Tagen

Low wind: Days where a wind
power plant generates less then
10 % of its capacity.

* Calculation: 450/360*10High growth of pump storage capacity is necessary. Also including the potentials in Norway,
Switzerland and Austria the aims are ambitioned.

RWE Innogy | March 2012

PAGE 19

IEEJ: June 2012 All Right Reserved

Flexible design makes new conventional power plants
becoming good partners of renewables
Comparison of ramp capacities (new lignite unit – old ligniteunit, new gas unit – old gas unit)
MW
1.000

New lignite
Max cap.
Min cap.
Max cap.

800~ 1000 MW~ 500 MW+/- 30 MW/min

New gas600

Max cap.
Min cap.
Max gradient~875 MW~260 MW1+/- 38 MW/min

400

Existing lignite
200

Existing gas

Max cap.
Min cap.
Max gradient

Max cap.
Min cap.
Max gradient0~300 MW~200 MW+/- 10 MW/min

510152025~420 MW~168 MW+/- 10 MW/min

30 minutes

The faster a power plant is able to lower and raise its output, the more flexible it can be utilised.
1) switch-off of a turbine

RWE Innogy | March 2012

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IEEJ: June 2012 All Right Reserved

Hydro and Biomass as balancing energy?
Potential in Germany is limited

Wind energy
June 2011

BiomassJune 2011

HydroJune 2011

> Curbed storage water- and pump storage power plants are already employed asbalancing energy power plants. Today the potential of hydro is nearly fully utilized.
> Biomass ist currently the only renewable und especially base-load capable balancing
energy.
> Currently necessary incentives for selling biomass efficiently on the balancing energy
market are missing.
Source: http://www.50hertz-transmission.net/cps/rde/xchg/trm_de/hs.xsl/167.htm/papp/apc_nextgen_inter_trmprod:EEG_Energy_Input_Process_Application/
RWE Innogy | March 2012

SEITE 21

IEEJ: June 2012 All Right Reserved

Electro mobility may play an important role in the future
Smart Grid
Application possibilities and potentials are numerous
Large-scaleroduction
renewables

E-Car andloading infrastructure
System service distribution
gridoperator

Smart Home

Balancing energy

Pooling(virtual power plant)

Decentral production
and own consumption

IKT-systems
data exchange of power needs andavailability of power

Transmission grid

Distribution grid

Source: FTD, RWE
RWE Innogy | March 2012

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Costs for the support of renewable energies must be
considered carefully
Feed-in costs under the German support scheme (EEG) (Gross in bn €)23,722,1
Hydro

Biomass

Wind Onshore

Wind Offshore

Photovoltaic

Others19,318,011,116,012,37,3

10,0
9,0
7,95,8

1,2

1,62,22,6

3,60,1

20,7

4,5

3,10,2
3,84,05,24,30,30,22000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: BMU Leitstudie 2008, EEG-Mittelfristprognose der Stromtransportnetzbetreiber (Zahlen bis 2010 stammen aus der EEG-Mittelfristprognose Stand 11.05.2009,
Zahlen für 2011 stammen aus der EEG-Mittelfristprognose Stand 15.11.2010, Zahlen ab 2012 stammen aus der EEG-Mittelfristprognose Stand 15.11.2011)
RWE Innogy | March 2012

IEEJ: June 2012 All Right Reserved

Agenda

1. Political Framework and decisions
2. Opportunities and Challenges
3. Conclusion and Outlook

PAGE 24IEEJ: June 2012 All Right Reserved

Conclusions and Outlook> Energy transition means more then building renewable capacities.
> The entire energy a must be rebuild to secure security of supply.
> The grid infrastructure is a very crucial part in the transition
process.
> All parts of the value chain (generation, transmission andconsumption) are effected.
> Timing of the transition and cost challenges are important tosecure economic competitiveness and public acceptance.
> Under these aspects the energy transition could be successful.

RWE Innogy | March 2012

PAGE 25IEEJ: June 2012 All Right Reserved

THANK YOU VERY MUCH FOR YOURATTENTION AND LET‘S COLLECTIVELY:Holger Gassner
Head of Markets & Political Affairs / CR
RWE Innogy GmbH
Gildehofstr. 145127 Essen+49 (0) 201 12 14072
holger.gassner@rwe.com
PAGE 26

Contact: report@tky.ieej.or.jp