IEA Germany Energy Policy Review - 2007

Saved to Z:// drive.

• Commends Germany for getting so far with RE, while suggesting that they move toward market-based mechanisms, citing high price of solar.
• Criticizes decision to phase out nuclear by 2022, saying it should be included in mix to achieve CO2 reductions.
• Commends plan to end subsidization of coal by 2018
• Recommends functional access to electricity transmission line networks for all market participants on equal basis (but isn't it already assured for RE?)
• Critcizes plan to provide carbon allowances to new coal and lignite power plants under EU GHG trading scheme
• Estimates show that between 2000 and 2012, the feed-in tariff will cost EUR 68 billion in total. 12 "In particular, the subsidies provided to solar photovoltaics are very high in relation to output; they will eat up 20% of the budget but contribute less than 5% of the resulting generation. In comparison, many energy efficiency measures cost multiples less in terms of their reductions in carbon dioxide emissions."
• 22 Projections for energy usage and price (residential and commercial) 2000-2030.
• 26-7 "Investment decisions, for example, lie solely in the hands of private energy suppliers. Nevertheless, the government believes that it remains one of its responsibilities to create conditions in which market forces can produce economically desirable outcomes. These conditions include the regulation of natural monopolies (such as gas and electricity grids), the development of market-based instruments for climate change mitigation (such as emissions trading) and the provision of subsidies for certain technologies that are not yet ready for the market (such as renewables)."
• 28-9 "Germany’s rapid development of its renewables sector has been driven by its renewables promotion policy, a differentiated feed-in tariff. Under the differentiated feed-in tariff scheme, guaranteed rates range from a low of 3.78 eurocents per kWh for biomass to a high of 56.8 eurocents per kWh for photovoltaics, and are, in general, guaranteed for 20 years. The feed-in tariff rates are set so that all technologies are elevated to a level playing field; in (PFCs) and sulphur hexafluroride (SF6) against either a 1990 or a 1995 baseline. terms of profit, an investor should be indifferent between the various renewable energy technologies. Annual degression rates between 1% and 5% are also applied to all technologies (except small hydropower), such that renewables installations going on line in future years receive progressively lower rates in order to account for technological and market learning. Erneuerbare-Energien-Gesetz (EEG), the Renewable Energy Act, guides the programme and mandates that the feed-in tariff programme be reviewed every four years in order to ensure that individual technologies are not oversubsidised."
• 34-5 Ecotax policy and tax rates on motor fuels, heating fuels, and electricity. Discusses tax exemptions, but not clear whether renewable electricity is exempt, as in Belgium. (I guess not.)
• 36 Intermittancy of wind prevents it from becoming a primary energy supply - evidence in Mallon book to the contrary.
• 40 - Second full paragraph sums up IEA's perspective on feed-in tariffs. Say tariffs for PVs are very high, and need to be compared to other methods of reducing CO2, such as efficiency measures. R&D funding should be used to reduce cost of technology.
• 47 - Emissions trading sector covers 55% of country's CO2 emissions. National allocation plan for 2005-07 (NAPI) capped CO2 at 495 MtCO2/yr for those installations covered. NAPII for 2008-2012, as revised by EC, caps it at 425.
• 49 - Plans for emissions reductions in sectors not covered by emissions trading (households, small business, transport) include Ecological tax reform making energy more expensive and employment cheaper, strengthening public transport, promotion of renewables through EEG, Expansion and modernisation of combined heat and power (CHP) plants through the April 2002 enactment of the law on CHP, and Improved energy efficiency in buildings through streamlined regulations, the introduction of energy certificates, financial assistance for energysaving measures and other measures.
• 52 - Rightly criticizes government's essential giveaway of emission permits to new plants for 14 years of operation. Also promotes auctioning of emission permits with revenue recycling back to gov't or consumers.
• 54- IEA seems to question whether goal of doubling energy productivity by 2020 from 1990 levels is possible. Plan includes increasing funding for CO2 Building Rehabilitation Program by EUR 1.5 billion per year (more on this on p. 58); modernizing power plans, promoting distributed gen and CHP plants; step up initiatives for energy conservation in buildings, electricity consumption, and transport. Energy Efficiency Action Plan released in June 2007.
• 56 - Says total of EUR 1.4 billion per year now available for energy rehabilitation in buildings.
• 59 - Technical efficiency gains in vehicle gas mileage since 2000 have been cancelled by increased driving.
• 59-60 - EU voluntary agreement with auto industry to reduce passenger car emissions to 140 g CO2 per km (avg) by 2008
• 60 - On a daily basis, about 27 million passengers use public transportation in Germany, resulting in about 19 million avoided individual vehicle trips. In 2005, public transport use increased to over 10 billion trips, an increase that can be attributed to easy access to public transport facilities: 86% of all households take less than 10 minutes to reach the closest public transport stop on foot.
• 66 - Table of renewables supply, 1970-2005
• 68 - Renewable promotion objectives: According to the EEG, Germany works to promote renewables to facilitate a sustainable development of energy supply, particularly for the sake of protecting the climate, nature and the environment; to reduce the costs of energy supply for the national economy, in part by incorporating long-term external effects; to contribute towards avoiding conflicts over fossil fuels; and to promote the further development of technologies for the generation of electricity from renewable energy sources.
• 68 - Major RE policies: Germany’s primary tool to promote renewables in the electricity sector is the EEG, enacted in 2000, and amended in 2004. The EEG replaced electricity feed-in legislation (Stromeinspeisungsgesetz, StrEG) enacted in 1990. The other major policies are a programme to provide financial incentives for installations that produce heat from renewables and the promotion of biofuels in transport.
• 68 - Under original feed-in law, power companies obliged to pay 65-86% of market price to renewables producers. Replaced with guaranteed rate, differentiated by source, location, size of installation, and technology. Idea is that producers should make same profit regardless of technology. The amount paid depends on the year in which the installation is built, with rates guaranteed for a term between 15 and 30 years, depending on technology. Tariffs decline annually to take into account technical development.
• 69 - Table of Feed-in tariffs by technology for 2006
• 69 - Under EEG, RE installations guaranteed priority grid access, transmission and distribution. Some detrimental transmission effects (?) occurred within Germany and at Netherlands border due to system not designed properly to handle significant wind integration.

At this point, I stopped reading the entire report, printed out the Renewable Energy section, and highlighted things in the document. Some info on costs for FITs, financial incentives for renewable heat, and biofuel tax exemptions, but not complete. IEA suggests that Germany should switch to renewables obligation (quota) or premium (a la wind PTC in U.S.) system now that RE market is relatively well-developed. Especially dislikes the large tariff attached to PV. Says R&D, rather than market deployment, should be subsidized.