RE Germany

Although Germany is not particularly windy and is blessed each year by about the same amount of sunlight as southern Alaska, it is now a global leader in the generation of energy from sun and wind, and in the production of solar panels and wind turbines. Its renewable energy industry employs about a quarter of a million people, and brought in almost $40 billion in revenue in 2007, up 10 percent from 2006 and nearly four times the figure for 2000. Many renewable energy companies have set up at least some kind of operation there in recent years, including Arise Technologies, a solar company headquartered in southwestern Ontario, which announced in September 2007 that it would establish its first industrial-scale production facility in eastern Germany.

To most North American economists and policy enthusiasts, the FIT Countries are full of any number of heresies, whether price fixing or central planning or some other acridly socialistic term deemed synonymous with eco-nomic anti-free-market intervention. But the frenetic activity at eastern German economic development offices is a direct result of the FIT’s unorthodox pricing scheme, and one European nation after another has chosen to follow the German lead. The FIT — an easily copied piece of legislation, unencumbered by the elaborate rules and fine calibrations of cap-and-trade regimes — has now spread to France, Greece, Ireland, Italy, and Spain.

This is probably the reason that most forecasts, reports and visionaries, including Green Peace, are maintaining that Europe will continue to be by far the market leader in renewable energy generation, companies and technology.

 

The German RES Powerhouse

Germany is an EU leader in the wind energy, the photovoltaics, the solar thermal and the biofuel sectors. A stable and predictable policy framework has created favourable conditions to RES penetration. Germany has the highest installed wind power capacity in the world. Feed-in tariffs for renewable electricity (RES-E), market incentives for renewable heat (RES-H), and tax exemptions for biofuels have proven a successful policy mix leading to a very dynamic market for renewable energy sources (RES).

 

Key facts from the German Environment Ministry

• The share of RES in total primary energy consumption was 5.8 % in 2006.

• The share of RES in the final energy consumption was 8.4% in 2007 compared to 7.8% in 20061.

• The share of RES in the gross electricity consumption was 14% in 2007. Compared to 11.5% in 2006 (in 2005: around 10.4%2).

• The share of RES in total heat supply amounted to 6.5% was achieved in 2007, compared to 6% in 2006 and 5.3% in 2005.

• The share of biofuels in the transport fuels in 7% in 2007 compared to 4.7% in 2006 (and 3.8% 2005). Germany’s dependence on imported energy amounts to 65.1%.

Technology specific figures

• Wind energy is the largest contributor to electricity production from renewable energies in 2006 with 30.5 billion kWh (2005: 27.2 billion kWh). This equals a share in total electricity consumption in Germany of 5%. With a new installed capacity of 2,233 MW in 2006, the construction of wind energy plants increased by 23% compared with 2005. In total, at the end of 2006, 18,685 wind energy plants were in operation with an installed capacity of 20,622 MW. Germany thus remains world leader.

• Electricity production from hydropower remained stable in 2006 with 21.6 billion kWh (2005: 21.5 billion kWh).

• Electricity production from biomass (without gas from landfills and sewage treatment plants, biogenic wastes) amounts to approximately 13.1 billion kWh in 2006 (2004: approx. 8.6 billion kWh). This equals a share of around 2.2% in total gross electricity consumption.

• Electricity production from biogas almost doubled from 2.8 billion kWh in 2005 to around 5.4 billion kWh in 2006.

• The electricity production from photovoltaics increased from 1.3 billion kWh in 2005 to around 2 billion kWh in 2006.

• The annual increase in solar thermal exceeded the limit of 1 million square metres of solar panel area for the first time in 2006. At the end of 2006, over 8 million square metres were installed.

• Demand for biomass in the heating sector (especially wood) increased by an estimated 10% in 2006. In total around 84 billion kWh were supplied from biomass. This equals around 94% of heating supply from renewable energies.

• Biofuels sales increased from around 2.3 million tonnes in 2005 to at least 2.8 million tonnes in 2006. In addition to the dominant sale of biodiesel (2005: 1.8 million tonnes), significant volumes of bioethanol (0.5 million tonnes) and vegetable oil (0.3 million tonnes) were recorded.

 

Feed-in tariffs

The feed-in tariffs have been introduced in Germany in 1990. The Electricity Feed Act (StrEG) entered into force on 1 January 1991. In April 2000, it was replaced by the Renewable Energy Sources Act, which was amended in July 2004. The Renewable Energy Act (EEG) is based on the following core principles: Priority access for renewable energy to the grid Priority transmission and distribution Obligation of grid operators to purchase the electricity produced from renewable energy Fixed price (“tariff”) for every kilowatt-hour produced from renewable energy for 20 years. Tariffs are differentiated by source and size of the plant Annual decrease (-1,5% - -6,5%) are in place to take account of technical development (degression) Equalisation of additional costs between all grid operators and electricity suppliers

 

Biofuel Tax exemptions

Biodiesel benefits from a partial tax exemption (B100). The tax will gradually increase from 9 c€ per litre in 2007 up to 45 c€ per litre beginning in 2012". Crude vegetable oils benefit from partial tax exemptions. The tax will increase from 10 c€ per litre in 2008 to 45 c€ per litre beginning in 2012. 2nd generation biofuels/ E85 are exempted from tax until 2015.

The German Federal Government has passed a (draft) biofuel sustainability ordinance. Under this ordinance, biofuel producers will in future enjoy fiscal and administrative support only if certain sustainability criteria are adhered to.

Comments

[Elissadarlene]

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[Solar Hot Water System]

Solar photovoltaic (PV) panels generate electricity.