BMI View: We maintain our upbeat outlook for the German non-hydropower renewables sector, as the introduction of capacity auctions - while slowing down growth in the short-term - will help reduce cost of new capacity and ensure that new intermittent power generating capacity can be integrated into the power grid without jeopardising the stability of power supply. Over the long term, these cost-reductions and the improved integration of capacity will cement renewables importance in the power mix, particularly as other power sectors stagnate and the backlog of expensive renewables subsidies is phased out.
|f = BMI forecast. Source: EIA, National Sources, BMI|
|Generation, Non-Hydropower Renewables, TWh||175.980||181.480||187.080||192.970||199.700||206.320||213.690|
|Generation, Non-Hydropower Renewables, % y-o-y||17.040||3.130||3.080||3.150||3.490||3.310||3.570|
|Capacity, Non-Hydroelectric Renewables, MW||93,178.4||98,129.3||102,010.1||105,925.1||109,843.6||113,966.7||118,388.8|
|Capacity, Non-Hydroelectric Renewables, % y-o-y||8.0||5.3||4.0||3.8||3.7||3.8||3.9|
Latest Updates And Structural Trends
Germany will introduce competitive auctions in the renewables sector from January 2017, as the EEG 2017 was passed through the German parliament in July 2016. The new mechanism will be introduced on the back of a series of solar power pilot auctions over 2015, that are meant to help the government better calibrate the new system. The amount of capacity awarded in auctions will be capped in order to ensure that new capacity can be integrated into the grid system without jeopardising the stability of the power supply. While this will slow growth over the short-to-medium term, we believe it will be a strong positive for the sector over the longer term, as costs decrease and new technologies that can support renewables integration gain traction in the country (like automated demand-response measures and battery storage).
Germany will reportedly lay out a climate action plan for 2050 by mid-2016. The plan will be a result of discussions with industry groups and trade unions that centre on finding a politically palatable solution to cutting coal power emissions. This will be on the back of the Climate Action Programme announced in December 2014. The latter plan aims to slash carbon emissions by between 62mn and 78mn tonnes by 2020, of which 25mn to 30mn tonnes will come by way of energy efficiency. It also signalled to the electricity sector to cut back an additional 22mn tons of carbon emissions by capping coal-fired power generation. However, we remain cautious to the government making strides in the phase-down of coal-fired power, as it remains an issue of great political sensitivity in the country.
2015 was a record year for wind power generation in Germany. Given good wind conditions and delayed offshore wind capacity coming online over the year, we estimate that wind comprised 13.2% of total power generation in Germany in 2015, compared to 10% in 2014. Adding to this, the country reportedly ran about 95% on renewable energy on May 8 2016, illustrating the potential of peak generation for wind and solar power in contributing all power in the German power mix.
The Germany Renewables Report researched at source contains BMI Research's assessment of the current renewables market in Germany. The report also contains historical data together with forecasts to end-2018 covering electricity generation (TWh) and electricity capacity (MW).
The renewables sectors covered in the report include Wind, Solar, Geothermal, Tidal and Wave, and Biomass (See Table of Contents for exact coverage). The report also features details on government green energy agendas and funding opportunities, as well as presenting a detailed list of key renewables projects currently being planned or undertaken in Germany, their capacity, the timeframe of construction and their current status.
The report discusses the various energy policies currently in force, including targets, subsidies and the relevant infrastructure developments or limitations which might impact on renewables growth, analysing the potential effects of regulatory changes in conjunction with the background macroeconomic outlook. Finally, there is a general overview of the competitive landscape in Germany, together with a detailed summary of the main utilities and manufacturers present and their business operations.
BMI's Germany Renewables Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with unique independent forecasts and competitive intelligence on the Germany renewables industry.
- Benchmark BMI's independent renewables industry forecasts for Germany to test other views - a key input for successful budgeting and planning in the renewables market.
- Target business opportunities and risks in the Germany renewables sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in the country.
BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering the renewables market in Germany, regulatory changes, major investments and projects and significant multinational and national company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the renewables sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2010-2012) and forecasts to end-2018 for electricity generation (TWh) and electricity generating capacity (MW) for each individual renewables sector present in the country.
These in turn are broken down into:
Electricity Generation: Overall capacity (TWh), growth % change year-on-year, KWh per capita, % of Total Non-Hydropower renewables generation, % of total electricity generation.
Electricity Capacity: Overall capacity (MW), growth % change year-on-year, % of non-hydroelectric renewables capacity and % of total capacity.
These forecasts are in turn supported by explicit assumptions, in conjunction with analysis of the key risks to the main forecast.
Business Environment Rankings
BMI's Renewables Business Environment Rankings provide fully comparable Risk-Reward Rankings aimed at investors in the regional renewables market.
The rankings methodology makes sophisticated use of various industry, economic and demographic data point.