BMI View: We maintain our upbeat outlook for the German non-hydropower renewables sector this quarter - with wind power driving growth amid a solar sector slowdown. The introduction of a competitive auctions system by 2017 will stabilise growth at a slower, albeit more sustainable rate over the next decade, in light of rapid growth over the last decade. This will be the result of a government aim to make the segment more competitive in order to curb subsidy support growth and curtail further electricity retail price hikes.
|f = BMI forecast. Source: EIA, National Sources, BMI|
|Generation, Non-Hydropower Renewables, TWh||164.340||170.090||176.150||182.600||190.080||197.530||205.250|
|Generation, Non-Hydropower Renewables, % y-o-y||16.030||3.500||3.560||3.660||4.090||3.920||3.910|
|Capacity, Non-Hydroelectric Renewables, MW||92,945.4||97,948.7||102,218.0||106,667.8||110,925.4||115,422.8||119,885.0|
|Capacity, Non-Hydroelectric Renewables, % y-o-y||8.0||5.4||4.4||4.4||4.0||4.1||3.9|
Latest Updates And Structural Trends
Germany's offshore wind sector registered 2,3GW of capacity additions connected to the grid over 2015, four times what was added in the UK over the year. The growth spike was a result of a backlog of delayed offshore wind projects coming online over the year, taking cumulative offshore installations in the country to 3.2GW. We expect this deployment rate to fall, as the offshore wind capacity target set at 6.5GW leading up to 2020 (cut from an initial 10GW) is too low to support growth at 2015 levels over the next five years.
The German government aims to increase the share of renewables in the total power generation mix from 29.2% (2016 - BMI forecast) to 35% by 2020. This goal increases to 50% by 2030 and a staggering 80% by 2050. Based on existing trends, we forecast Germany could already surpass its 35% target of non-hydropower renewable generation mark in 2021.As part of its strategy of curbing costs for its renewables subsidy mechanism by making it more cost-competitive, Germany's federal network agency Bundesnetzagentur invited bids for 150MW of solar capacity in February 2015, in the country's first pilot green energy tender. The regulator accepted proposals for 500MW of solar photovoltaic capacity over 2015, which will be followed by 400MW in 2016 and a further 300MW in 2017. This shift is a part of a wider strategy to curb capacity additions in order to ensure sustainable growth in the German renewables segment. The government aims to deploy the reverse capacity auction system across the renewables sector in 2017.
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.
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.