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Energy Policy Review
Germany 2020
Energy Policy Review
Germany 2020
3FOREWORD
Foreword
The International Energy Agency (IEA) has conducted in-depth peer reviews of its member countries' energy policies since 1976.This process not only supports energy policy
development, but also encourages the exchange of and learning from international best practice s and experiences. In short, by seeing what has worked - or not - in the "real world", these reviews help to identify policies that achieve their objectives and bring concrete results. Recently, the IEA has moved to modernise the reviews by focusing on some of the key energy challenges in today's rapidly changing energy markets. Germany is an important and active member of the IEA. I am grateful to Peter Altmaier, Federal Minister for Economic Affairs and Energy, for his collaborative spirit and commitment to building a secure and sustainable energy future. Together, we co organised the first Global Ministerial Conference on System Integration of Renewables in Berlin in October 2019. The event brought together government ministers, industry chief executives and other high-ranking officials from around the world to share best practices and innovative ideas to help fully grasp the opportunities of wind and solar energy. Since the IEA review of German energy policies in 2013, the Energiewende has remained the defining feature of the country's energy landscape. In place for nearly a decade, the Energiewende is a major plan for transforming the German energy system, making it more efficient and supplied mainly by renewable energy sources. It aims to phase out electricity generation from nuclear power by the end of 2022.To date,
the Energiewende is clearly visible in electricity generation, where it has been effective at increasing the share of renewable energy supply. Still, despite progress on lowering overall emissions, Germany is struggling to meet its near-term targets. This is in large part because of uneven progress across sectors, with notable challenges in transport and heating. Now, the government must refocus its efforts to achieve stronger emissions reductions in these other sectors. The IEA welcomes the recently adopted climate action plan, which includes a carbon price in the transport and heating sectors, as an important step in the right direction. Energy security remains a focus area for the IEA, and I am pleased to observe that Germany has maintained a high degree of oil, natural gas and electricity supply security.As the nuclear and coal phase
-outs increase Germany's reliance on natural gas, it will be increasingly important for the country to continue efforts to diversify its gas supply options, including through the import of liquefied natural gas. I strongly believe that both policy and regulatory refo rms can move Germany towards a cost-efficient, equitable and sustainable path to meeting its highly ambitious energy transition goals. It is my hope that this report will help Germany as it undertakes this crucial endeavor.Dr Fatih Birol
Executive Dire
ctorInternational Energy Agency
5TABLE OF CONTENTS
ENERGY INSIGHTS
1. Executive summary .....................................................................................................11
Overview ............................................................................................................................11
Emissions targets ..............................................................................................................11
Electricity transition ............................................................................................................12
Beyond electricity ..............................................................................................................14
Energy security ..................................................................................................................15
Key recommendations: ......................................................................................................15
2. General energy policy .................................................................................................17
Country overview ...............................................................................................................17
Supply and demand ...........................................................................................................19
Institutions ..........................................................................................................................24
Energiewende ....................................................................................................................26
Pricing and taxation ...........................................................................................................31
Assessment .......................................................................................................................32
Recommendations .............................................................................................................35
ENERGY SYSTEM TRANSFORMATION
3. Energy and climate change ........................................................................................37
Overview ............................................................................................................................37
Energy-related CO2 emissions ..........................................................................................38
CO2 drivers and carbon intensity .......................................................................................40
Institutions ..........................................................................................................................41
Emissions reduction targets and policies ..........................................................................42
Focus area: Decarbonising heat and sector coupling .......................................................50
Adapting to climate change
Assessment .......................................................................................................................57
Recommendations .............................................................................................................59
4. Energy efficiency .........................................................................................................63
TABLE OF CONTENTS
6 Overview ........................................................................Energy consumption by se
ctor ........................................................................ ..................65 Institutions ........................................................................ Energy efficiency policy ........................................................................ .............................69 Assessment ........................................................................ Recommendations ........................................................................ .....................................805. Renewable energy ........................................................................
...............................80 Overview ........................................................................ Supply and demand ........................................................................ ...................................84 Institutions ........................................................................ Policies and measures ........................................................................ ..............................89 Assessment ........................................................................ ............................................ 106 Recommendations ........................................................................ .................................. 1096. Energy technology research, development and demonstration ......................... 113
Overview ........................................................................ ................................................. 113Public spending on energy RD&D ........................................................................
.......... 113 7 th Energy Research Programme ........................................................................ ........... 115International collaborations ........................................................................
.................... 118 Assessment ........................................................................ ............................................ 119 Recommendations ........................................................................ .................................. 121ENERGY SECURITY
7. Electricity........................................................................
........................................... 123 Overview ........................................................................ ................................................. 123 Electricity supply ........................................................................ ..................................... 124Electricity market structure and regulation ..................................................................... 127
Assessment ........................................................................ ............................................ 141 Recommendations ........................................................................ .................................. 1448. Natural gas ........................................................................
........................................ 147 Overview ........................................................................ ................................................. 147TABLE OF CONTENTS
7TABLE OF CONTENTS
Supply and demand ........................................................................................................ 148
Institutions ....................................................................................................................... 150
Upstream policy .............................................................................................................. 151
Market structure .............................................................................................................. 151
Infrastructure................................................................................................................... 153
Alternative applications for gas ...................................................................................... 155
Energy security ............................................................................................................... 157
Assessment .................................................................................................................... 160
Recommendations .......................................................................................................... 162
9. Coal ............................................................................................................................ 165
Overview ......................................................................................................................... 165
Supply and demand ........................................................................................................ 166
Coal mining policy .......................................................................................................... 167
EU emissions limits ........................................................................................................ 169
Coal phase
-out ............................................................................................................... 169
Lignite power reserve
..................................................................................................... 171
R&D and technology development ................................................................................. 171
Assessment .................................................................................................................... 171
Recommendations .......................................................................................................... 173
10. Oil ............................................................................................................................. 175
Overview ......................................................................................................................... 175
Supply and demand ........................................................................................................ 176
Trade .............................................................................................................................. 178
Germany's oil supply and demand outlook .................................................................... 180
Oil industry structure ....................................................................................................... 180
Prices and taxation ......................................................................................................... 181
Oil market and policies ................................................................................................... 183
Oil supply infrastructure
.................................................................................................. 186
Oil emergency policies and organisation ....................................................................... 189
Assessment .................................................................................................................... 192
TABLE OF CONTENTS
8Recommendations .......................................................................................................... 193
11. Nuclear ..................................................................................................................... 195
Overview ......................................................................................................................... 195
Industry structure
............................................................................................................ 196
Nuclear phase
-out .......................................................................................................... 198
Institutions ....................................................................................................................... 199
Nuclear waste management ........................................................................................... 202
Decommissioning
........................................................................................................... 205
Nuclear research and competencies .............................................................................. 208
Assessment .................................................................................................................... 209
Recommendations .......................................................................................................... 211
ANNEXES
ANNEX A: Organisations visited .................................................................................... 213
ANNEX B: Energy balances and key statistical data ..................................................... 215
ANNEX C: International Energy Agency "Shared Goals" .............................................. 219
ANNEX D: Glossary and list of abbreviations ................................................................ 221
LIST OF FIGURES, TAB
LES AND BOXES
Figures
2.1 Map of Germany ......................................................................................................18
2.2 Overview of the German energy system by fuel and sector, 2018 .........................20
2.3 TPES by source, 1973-2018 ...................................................................................21
2.4 Breakdown of TPES in IEA member countries, 2018 .............................................21
2.5 Energy production by source, 1998-2018 ...............................................................22
2.6 Self-sufficiency (production/TPES) by energy source, 1998-2018 .........................22
2.7 TFC by sector, 1997-2017 .......................................................................................23
2.8 TFC by source and sector, 2017 .............................................................................24
2.9 Structure and targets of the Energy Concept ..........................................................27
3.1 GHG emissions by sector, 1990-2017 ....................................................................38
3.2 Energy-related CO emissions by sector, 1990-2017 .............................................39
3.3 Energy-related CO emissions by energy source, 2005-17 ....................................39
3.4 Energy-related CO2 emissions and main drivers in Germany, 1990-2017 .............40
3.5 CO2 intensity in Germany and selected IEA member countries, 1990-2017 ..........41
3.6 CO2 intensity of power and heat generation in Germany and in other selected
IEA member countries, 1990
-2017 ..........................................................................41TABLE OF CONTENTS
9TABLE OF CONTENTS
3.7 Germany's energy and climate targets ....................................................................42
3.8 Sectoral targets in the Climate Action Plan 2050 ....................................................45
3.9 Energy supply in residential space heating in Germany, 2016 ...............................51
3.10 District heating sales by fuel used for generation, 2017 .........................................54
4.1 Energy supply and drivers, 2000-17 ........................................................................63
4.2 Energy intensity in IEA member countries, 2017 ....................................................64
4.3 Final energy consumption by sector, 2000-17 ........................................................65
4.4 TFC in residential and commercial sectors by source, 2000-17 .............................66
4.5 Breakdown of TFC in the residential sector, 2017 ..................................................66
4.6 TFC in industry by source, 2000-17 ........................................................................67
4.7 Energy consumption in manufacturing industry sectors, 2017 ...............................67
4.8 TFC in transport by source, 2000-17 .......................................................................68
4.9 Fuel efficiency (kilometre/litre) in road transport by mode, 2000-16 .......................69
5.1 Share of renewable energy in the German energy system, 1978-2018 .................84
5.2 Renewable energy and waste in TPES, 2000-18 ...................................................84
5.3 Renewable energy and waste in electricity generation, 2000-18 ...........................85
5.4 Biogas consumption by sector, 2005-17 .................................................................86
5.5 Final energy consumption for heat generation based on renewable energy
sources, 2000-18 .....................................................................................................87
5.6 Final energy consumption for transport based on renewable energy sources,
2000-2018 ................................................................................................................88
5.7 Progress towards 2020 targets................................................................................90
5.8 Policy support changes and renewables capacity deployment, 1990-2017 ...........92
5.9 Price reductions in recent auctions for solar PV and onshore wind, 2014-19 ........93
5.10 EEG surcharge and average wholesale electricity market price, 2010-18 .............94
5.11 Share of solar and wind in electricity generation in IEA countries, 2018 ................95
5.12 Conventional electricity generation in Germany, November 2017 ..........................95
5.13 IEA forecast of renewable capacity additions in Germany, 2018-24 ......................96
5.14 Share of renewable energy sources in heating and cooling, IEA countries, 2017 .98
5.15 Biomass versus oil heating in new installations in Germany, 2008-18 ................ 100
5.16 Fuel shares in district heating in Germany, 2017 ................................................. 101
5.17 Fuel shares in sales and energy consumption for residential space
heating in Germany .............................................................................................. 102
5.18 Heat oil fuel prices in IEA in Q1 2019 ................................................................... 103
5.19 Household delivered heat costs for different heating appliances, 2018 .............. 103
5.20 Renewable energy in transport by source in selected countries, 2016 ............... 105
5.21 GHG emissions reductions from biofuels used for CPQ compliance
2014-17, compared with gasoline and diesel ....................................................... 106
6.1 Government energy RD&D spending per GDP in IEA countries, 2017 ............... 114
6.2 Government energy RD&D spending by category, 2010-17 ................................ 114
6.3 German research and innovation system stakeholders ....................................... 115
7.1 Electricity generation by source, 2018 ................................................................. 123
7.2 Electricity generation by source in IEA, 2018 ....................................................... 124
7.3 Electricity supply by source, 2000-18 ................................................................... 125
7.4 Electricity net imports and exports by country, 2000-17 ...................................... 125
7.5 Monthly electricity generation by source, July 2016-June 2019 .......................... 126
7.6 Electricity consumption (TFC) by consuming sector, 2000-17............................. 127
7.7 Electricity prices in IEA member countries, 2018 ................................................. 128
7.8 Electricity prices in Germany and selected IEA countries, 2000-18 .................... 128
7.9 Average annual power supply disruptions in European countries, 2016 ............. 140
8.1 Share of natural gas in the German energy system, 1978-2018 ......................... 147
8.2 Natural gas supply by source, 2000-18 ................................................................ 148
8.3 Germany's natural gas net imports by country, 2000-18 ..................................... 149
TABLE OF CONTENTS
108.4 Natural gas consumption by sector, 2000-17 ....................................................... 149
8.5 Natural gas prices in selected IEA member countries, 2000-18 .......................... 152
8.6 Germany's planned LNG facilities ........................................................................ 155
9.1 Share of coal in different energy supplies, 1978-2018 ......................................... 165
9.2 Coal supply by source, 2000-18 ........................................................................... 166
9.3 Hard coal imports by country, 2000-18 ................................................................ 166
9.4 Coal consumption by sector, 2000-17 .................................................................. 167
9.5 Hard coal mining sector employment in Germany ............................................... 168
9.6 Installed coal power capacity before and after the coal exit suggested by the
Coal Commission .................................................................................................. 170
10.1 Share of oil in different energy metrics, 1978-2018 ............................................. 176
10.2 Domestic oil production, 2008-18 ......................................................................... 176
10.3 Oil demand by product, 2008-18 .......................................................................... 177
10.4 Oil demand by sector, 2007-17 ............................................................................ 178
10.5 Crude oil net imports by country, 2008-18 ........................................................... 179
10.6 Oil products net imports by country, 2008-18 ...................................................... 179
10.7 Germany's oil supply and demand outlook, 2018-23 ........................................... 180
10.8 Oil fuel prices in IEA member countries, Q1 2019 ............................................... 182
10.9 Map of Germany's oil infrastructure ..................................................................... 188
10.10 Germany's oil refinery outputs composition, 2018 ............................................... 189
11.1 Nuclear power generation and share in electricity generation, 1974-2018 ......... 195
11.2 Organisational structure of Germany's nuclear regulatory oversight ................... 199
11.3 German NPPs' on-site interim storage capacities ................................................ 203
11.4 Nuclear facilities in Germany, as of April 2019 .................................................... 206
11.5 Build-up in provision for D&D by company and activity ....................................... 208
Tables
3.1 Germany's climate and energy targets from the Climate Action Plan 2050
and Energy Concept ...............................................................................................46
3.2 Energy tax rates for heating fuels ............................................................................54
5.1 Targets and indicative trajectories of renewable energies in final
energy consumption and electricity supply by year and policy ...............................907.1 Installed electricity generation capacity, 2005-17 (GW) ....................................... 126
8.1 Natural gas storage capacity in select countries .................................................. 154
10.1 German oil refineries, 2018 .................................................................................. 187
11.1 Status of the German nuclear fleet, 2018............................................................. 196
11.2 Organisational restructuring in the field of radioactive waste management ........ 201
11.3 Germany's nuclear waste inventory ..................................................................... 203
11.4 Applications and licences for decommissioning due to nuclear phase-out (as of
April 2019) ............................................................................................................. 207
Boxes3.1 Air quality challenges in German cities ...................................................................48
5.1 Germany is a world leader in biogas .......................................................................86
11ENERGY INSIGHTS 1.Executive summary
Overview
Since the 2013International
Energy
Agency
IEA) review of German energy policies,
t heEnergiewende
continues to be the defining feature of Germany's energy policy landsc ape. In place for nearly a decade, the Energiewende is a major plan for transforming the German energy system into a more efficient one supplied mainly by renewable energy sources and without electricity generation from nuclear by the end of2022. As such, the Energiewende is meant to move Germany towards a low-carbon,
nuclear -free energy system by the middle of the century. Over the last four decades, Germany 's energy supply has shifted from a clear dominanc e of coal and oil to a more diversified system. Nuclear energy, first introduced in the1970s,
is being replaced by more renewables, in line withGermany's
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