Insights and Opportunities
Overview: As prices for conventional fuels continue to increase and prices for renewable energy steadily decrease, the renewable energy sector is expected to continue to grow. Electricity generation from renewable energies is substantially based on the German Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, EEG), which is in accordance with European policy (Directive 2001/77/EC). Germany aims for 12.5 percent of electricity to be produced from renewable sources by 2010. Experts forecast as much as 47 percent of German electricity from renewable sources by 2020.
Wind Energy: Of all renewable energy sources, wind energy will remain the most significant. Until 2020, 25 percent, or 149 TWh, of the entire electric consumption in Germany is expected to be met by wind energy. Most of this production will be realized on shore, with installed capacities expected to reach 45 GW in 2020 (24 GW in 2008). Off-shore installations are expected to reach 10 GW.
Bio Energy: Total installed capacity of bio energy power plants is expected to more than double from 4.1 GW (2007) to 9.3 GW in 2020 to reach an electricity production of 54 TWh. The major share will come from biogas, followed by solid biomass (mainly wood and plants), liquid biomass (plant oils), and sewage and landfill gas. Bio energy is expected to be the second largest source for electric power.
Photovoltaic (PV) Energy: In 2020, 39.5 GW of installed cells will generate 40 TWh (2007: 4.3 TWh). PV will then generate around seven percent of the electricity used in Germany. To reach these ambitious growth goals, a further increase in efficiency combined with drastic price reductions are necessary, particularly since the feed-in tariffs for power generated by PV installations are subject to an annual digression of eight percent on average. It is expected that PV-generated power will cost as much as ‘conventional’ power by 2015. According to the German Solar Association (BSW), € 2.9 billion will be invested in upgrading or new construction of PV manufacturing plants, and € 224 million in additional R & D activities by 2010.
Hydro Power: Major investments are expected in the hydro power segment, not only for refurbishing existing facilities and upgrading them to meet environmental standards (e.g., elimination of barriers, installation of fish passes) but also by reactivating decentralized small units.
Geothermal Energy: At present, total installed electrical power equals to 7 MW generating 150 Million kWh per year. It is expected that this energy form will reach as much as 6000 MW and 400 Million kWh/year by 2020. 150 designated areas for geothermal exploration have been designated in Germany, some of which allow for the realization of several projects. About 62,000 heat pumps are installed, mostly in private residences. More than half use water-to-water or brine-to-water technology for which vertical drilling or horizontal netting is required. A little less than half use air-to-air heat pump technology, which is expected to carry the highest growth potential.