1. The German Energiewende: Implications for Europe Climate and Energy Package. Myths and costs in the context of the road map 2050 Warsaw, September 27th 2011

2. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 2 Speedier Energiewende Adjusted goals 2020: –Share of Renewables 35 % –Reduction of electricity consumption 10 % –Reduction of heat demand in buildings 20 % Goals 2050 still valid: –Reduction of CO2-emissions at least 80% –Electricity production: Renewables 80% –Reduction of energy consumption 25% Phase-out of nuclear power until 2022 Strengthening the supergrid Rising prices: Protecting the eletricity intensive industry Post Fukushima Energy Policy in Germany

3. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 3 West German Energy Programme 1977: Following the French path Level today Nuclear Power Coal Gas Lignite TWh Year Foundation of the Green Party Anti nuclear protest beginns

4. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 4 Reality 2011 German Electricity Production first half year 2011: 283 TWh Quelle: BDEW, AG Energiebilanzen Renewables

5. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 5 The international context: Growth of production capacities + 36 % + 48 % + 55 % + 153 % + 437 % + 594 % - 42 % Eigene Darstellung, Zahlen: Frost und Sullivan 2011 Capacity growth until 2030: 41 % Generation growth until 2030: 63 % Rising problems to satisfy electricity demand: Secure supply as a decisive economic factor Energiewende is not a German phenomenon

6. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 6 Germany has lost its tecnological edge in renewables Shares of newly installed global wind capacity 2010 Quelle: VDMA, Dewi Share of global solar turnover

7. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 7 Nuclear Power phase-out Immediate closedown of the seven oldest nuclear plants and Krümmel This corresponds to 40 % of German nuclear capacity Last three plants will be closed on 31st december 2022 Christian-liberal coalition returned to the accord between the the socialist-green government and the nuclear plants operators in 2000 Decision to activate 2.000 MW fossil reserve capacities

8. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 8 Is there a European energy market? The political goal is to create an EU internal energy market This has not been achieved yet – The grid connections between the member states are only weakly developed – No European electricity exchange exists – Therefore there is no European merit order 3.400 3.900 3.200 2.100 1.000 4.000 1.700 1.600 1.400 1.800 3.400 600 1.800 Interconnectors` Capacities 2009 F NL DKS CH A PL/CZ

9. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 9 Merit Order: Pricing at an electricity exchange Base LoadPeak LoadMid Load Nuclear Power, Lignite Coal, Gas Pump Storage, Oil Demand kWh Marginal Costst / /MWh Supply Prognosis Market Price Spread/Earnings

10. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 10 France Belgium Netherlands Denmark Switzerland Austria Poland Czech Republic Others Sum MWh Export Import Germany has lost its exporter status 55 % of missing nuclear production is replaced by better weather and higher solar production 45 % is replaced by imports

11. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 11 European implications: grid stability Germany is now net electricity importer After the shutdown of the nuclear power plants with their stable feed- in, the risk of blackouts has risen also for the neighbours Especially southern Germany lacks production capacities Other countries like Switzerland, Austria, Netherlands, France cannot be sure to get the needed energy They will have to strengthen their grids faster to take in more volatile power from Germany

12. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 12 European implications: prices Germany has enough capacity to supply itself But: merit order has shifted towards more expensive electricity production Thus, it is more lucrative for power plants from neighbouring countries to sell their electricity in Germany Lower prices in Germany may result But also higher prices in the neighbour countries because of reduced supply (scarcity signals) Prices in France, UK, Netherlands and Belgium have risen by 10 %

13. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 13 European implications: CO2-certificates and climate targets In 2010 nuclear plants produced 43,6 TWh and zero emissions Same amount pro- duced by fossil plants: 26 Mio tons CO2 400 Mio. Euro extra for CO2-certificates at 15 Euro/ton Replacement by imports: Germany exports emissions ETS: Higher Prices for all participants Climate Targets?

14. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 14 Neighbours strategies Tusk: Coal is back on the agenda Expects severe power shortages 2016 lack of 3-6 GW Look for other suppliers Strengthen the grids Finish nuclear plant near Kaliningrad Threatens Lithuanias nuclear plans Growing importance in northwestern Europe Enlarge the capacity by 50 % until 2018 Until 2014 already 7 GW are under construction Become net exporter Enlarge nuclear power plant Rising exports in the long run not possible No ambition to close German gap

15. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 15 EU policy Immediate reaction after Fukushima: stress tests - European Council decision in March: all nuclear power plants in the EU have to undergo a risk and safety assessment (stress-tests) - European Nuclear Safety Regulators Group elaborated common specifications, stress tests started in June - First results to be presented at European Council in December EU legislation: - The EU has competence for: functioning of energy market, interconnection of networks, security of supply, energy efficiency and renewable energies, climate protection - The EU has NO competence for: choice and exploiting of energy sources, general structure of energy supply in Member States - Nuclear safety lies inbetween: framework directive but no EU standards

16. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 16 Future EU policy Is the German unilateral reaction to Fukushima the starting point for a real common EU energy policy? Secure supply is a European Issue: Nabucco Install renewables where it is cheapest Creating level playing field for all companies EU energy policy as a means to further strengthen integration

17. Dr. Sebastian Bolay: The German Energiewende: Implications for Europe 17 Dr. Sebastian Bolay Director Energy and climate policy German Chamber of Inudstry and commerce Breite Str. 29 10178 Berlin Fon +49(0)30.20308-2202 Fax +49(0)30.203085-2202 www.dihk.de bolay.sebastian@dihk.de