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Transcript of Energy Transformation German Polish Energy Dialogue Karsten Neuhoff Meeting with Polish Journalists...
Energy Transformation
German Polish Energy Dialogue
Karsten NeuhoffMeeting with Polish JournalistsBerlin, 5.12.2012
1 Background on Polish and German Energy System
2 Energy Transformation in Germany
3 Economic prospects of energy transformation
4 European dimension of energy transformation
Energy Transformation
Comaprison energy use/person
Karsten Neuhoff, 22.3.20123
1
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Other REHydroNuclearCoalGasOil
Poland Germany
Primary energy use (Tone of oil equivalent) per person
• Both countries with strong history of coal• Germany shifted first to oil then to gas as domestic heating source• RE growth strong in Germany (as no losses in transformation 3* bigger than depicted)• German ambition – replace nuclear and fossil with efficiency and renewables
Source: Based on BP Statistical Review of World Energy June 2012 and Eurostat
Import dependency motivates savings and substitution
Karsten Neuhoff, 22.3.20124
Source: Based on BP Statistical Review of World Energy June 2012
1
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
0%
20%
40%
60%
80%
100%
120%
140%
Coal PolandCoal GermanyGas PolandGas Germany
Share of domestic consumption met by local productin
Hard coal: Germany net importer since 1982, Poland since 2011-> reduced demand will not impact local mining but reduce import costs
Lignite: Both Germany and Poland with large lignite share in power-> existing fields operate til approx. 2030
CO2 emissions / head
5
1
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
CO2/headOther REHydroNuclearCoalGasOil
Poland Germany
• Both counries have strong reductions since 1989 due to combination linked to efficiency and economic transformation
• Despite lower energy use/person, high carbon larger coal share in Poland translates into similar CO2 emissions in both countries.
Source: Based on BP Statistical Review of World Energy June 2012 and Eurostat
Investments in energy savings and renewables can reduce fossil fuel import costs
Karsten Neuhoff, 22.3.20126
1
Fuel import costs relative to GDP (2011)
Poland Germany0%
1%
2%
3%
4%
5%
6%
7%
Coal import costsGas import costOil import cost
Source: Based on BP Statistical Review of World Energy June 2012
1 Background on Polish and German Energy System
2 Energy Transformation in Germany
3 Economic prospects of energy transformation
4 European dimension of energy transformation
Energy Transformation
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.0
10
20
30
40
50
60
0
100
200
300
400
500
600
700
800
900Incremental thermal retrofit costs Non-thermal retrofit costs
Energy savings
An
nu
alis
ed I
nve
stm
ent
Co
sts/
En
erg
y S
avin
gs
in E
UR
/m2
Up
-Fro
nt
Inve
stm
ent
Co
sts
in E
UR
/m2
Single-Family House KfW 100Multi-Family House KfW 100 (=New Built) KfW 55 KfW 55
Key for cost effectiveness: Energy efficiency potentials
8Based on 7 Cent/kWh gas price, 5.5% real interest rate
Source: Neuhoff et al., 2011. „Economic Viability, Financial
Support, and Energy Savings“ www.climatepolicyinitiative.org
2
Competition - Chinese energy & climate policy targets
9
2
Energy efficiency target
Carbon efficiency target
Car
bon
inte
nsity
16% Energy intensity17% Carbon intensity
20% Energy intensity
45-50% Carbon intensity
Chinese commitments to energy & carbon intensity improvements:
12th FYP
1
Based on Review of Low Carbon Development in China, 2010 and early reports of 12th FYP
20
20
20
15
20
10
Experience curves – from innovation to diffusion2
Source IEA
Support for renewable energy – learning and improving
2
DIW Discussion Papers 1189, Thilo Grau:: Responsive Adjustment of Feed-in Tariffs to Dynamic PV Technology Development
11
Anlagen bis 30KW
12
2Costs for energy transformation – can be managed
Distriubutional impacts key – deserve tailored policy
Source: DIW Wochenbericht Nr. 41.2012
1 Background on Polish and German Energy System
2 Energy Transformation in Germany
3 Economic prospects of energy transformation
4 European dimension of energy transformation
Energy Transformation
Energy transformation – investing in RE and EE to reduce fuel import costs
14
Average annual energy system costs for Europe (2011-2050)
Current Policy Initiatives: 2619 billion Euro (39% Capital cost)
High Renewables Scenario: 2590 billion Euro (48% Capital cost)
European fossil fuel import bill (2030 / 2050)
Current Policy Initiatives: 532 / 704 billion Euro
High Renewable Scenario: 375 / 154 billion Euro
Savings: 157 / 550 billion Euro
German FIT “predictable and transparent… long-term” investment framework
23
Source: based on EC 2011, Energy Roadmap 2050 Table 40/41
The job and productivity benefits
•Green investments reach macro-economic significance•They can have long-term productivity gains. • In the short-term, some can have high multipliers
3
1 Background on Polish and German Energy System
2 Energy Transformation in Germany
3 Economic prospects of energy transformation
4 European dimension of energy transformation
Energy Transformation
The role of EU ETS for European companies
Karsten Neuhoff17
4
Gt CO2
in EU-27
0
1
2
3
4
5
2010 2020 2030 2040 2050
Linear 80-95% reduction trajectory
Linear 80-95% reduction trajectory
EU Target
20% full CDM
20% no off-sets
30% full CDM
30% no off-sets
ETS numbers based on “The role of CDM post 2012” Climate Policy Initiative working paper
The impact of EU ETS for Innnovation and Investment
1. Capturing Companies’ AttentionCompanies with higher expectations of the future
stringency of permit allocation are more likely to invest in low-carbon innovation
2. Providing Clarity for Decision MakingThe EU ETS directive has set a cap on ETS emissions
that declines at a rate of 1.74% per year from 2013, unless reset, until 2050. This creates a long-term framework to inform company strategy.
3. Creating enabling environment for Low-Carbon Investment
Power generators report the following factors are important for investment decisions: Price & access of fuels, Price & access of installations, Price & demand for electricity, Public opinion and the long term carbon priceSource: (1) study by LSE/Imperial/Carlos III interviews with 800 manufacturing companies (3) study by ISI-Fraunhofer/ETH Zürich survey of 65 power companies, as part of Carbon Pricing for Low-Carbon Investment Project http://climatepolicyinitiative.org/publication/344/
18
4
Coordination for policies and supply chain
Karsten Neuhoff19
4
Assumed emission growth business as usual 1%/year
Contribution from new low carbon technology portfolio
Contribution from energy efficiency
Gt CO2
in EU-27
0
1
2
3
4
5
2010 2020 2030 2040 2050
Linear 80-95% reduction trajectory
Linear 80-95% reduction trajectory
Renewables DirectiveSET Plan
EU Target
20% full CDM
20% no off-sets
30% full CDM
30% no off-sets
ETS numbers based on “The role of CDM post 2012” Climate Policy Initiative working paper
EE Directive
The Need for European Action
Karsten Neuhoff, 22.3.201220
- Other regions accelerate implementation of carbon pricing
4
Graph: Left: Michaelowa et a., right: Andreas Türk, Sonja Klinsky, Michael Mehling, Xin Wang 2012, Climate Strategies
EU ETS
WCI (2013)
RGGI PRChina(2013?)
NSW
NZ ETS
TokyoKorea(2015?)Taiwan(201x?)
Australian ETS 2012
South African Carbon Tax
Transmission constraints – Germany in Europe4Line Loadings: Voltage Levels >= 220kV - Max wind
10 E
Karsten Neuhoff, 29.3.201221
Source: Neuhoff, K, Boyd, R., Grau, T., Barquin, J., Eachavarren, F., Bialek, J., Dent, C., von Hirschhausen, C., Hobbs, B., Kunz, F., Weigt, H., Nabe, C., Papaefthymiou, G., Weber, C., 2011, Renewable Electric Energy Integration: Quantifying the Value of Design of Markets for International Transmission, DIW Berlin, Discussion Paper, 1166.
Integrated (European)
energy markets
Grid 2020 – financing needs4
Sources: ‘planned’ from Roland Berger 2011, ‘estimates’ from EC, 2011
0
20
40
60
80
100
2010 Market Value(6 TSOs)
2020 Market Value(estimate scaled to 6 TSOs)
Envisaged Grid Investment to 2020:Planned by TSOs (ref: Roland Berger), and
EC estimate
2020 EstimatesDebtEquity
· 1.5% annual equity growth
EC estimate: approx 50% of EUR 100bn
Roland Berger: approx 50% of planned
investments
1 Background on Polish and German Energy System
2 Energy Transformation in Germany
3 Economic prospects of energy transformation
4 European dimension of energy transformation
Energy Transformation
Vielen Dank für Ihre Aufmerksamkeit.
DIW Berlin — Deutsches Institutfür Wirtschaftsforschung e.V.Mohrenstraße 58, 10117 Berlinwww.diw.de
RedaktionKarsten [email protected]