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RWE East / RWE Hrvatska
Croatian Energy Association, WEC national committee, 23th Forum
Zagreb, November 28th, 2014
HOW TO DEFINE AND IMPLEMENT AN ENERGY POLICY
IN LIGHT OF NEW EU GUIDELINES FOR THE YEAR 2030?
Ingo Block, RWE Hrvatska
RWE HR
PAGE 1
Agenda
1.
2.
3.
4.
RWE Introduction
EU Climate policy 2030
German „Energiewende“
Energy company strategies
RWERWE
Hrvatska
East
November
March
20142013
PAGE 2
RWE Group – Acting along the whole energy value chain
RWE Hrvatska
Source: RWE Fact Book, 10/2014, Page 8
RWE East
November
March
20142013
PAGE 3
RWE Group – Acting all over Europe






49 GW plant capacity (No. 2 in EU)
270 GWh electricity sales
1,145 TWh electricity traded
More than 16 mill. electricity customers
app. 100.000 customers in Croatia
More than 7 milll. gas customers
Figures as of Dec 2013, [Croatia as of Dec 2014
RWE Hrvatska
Source: RWE Fact Book, 10/2014, Page 13
RWE East
November
March
20142013
PAGE 4
RWE – 115 years experience in energy business and
15 years in energy market liberalisation
We know what
we are talking about
We are challenged
by these mega trends
trends in Europe
- Decarbonisation
- Decentralisation
- Innovation
We are the trustful
partner of the energy
transition in Europe!
RWERWE
Hrvatska
East
November
March
20142013
PAGE 5
EU climate policy
CO2 Reduction
Efficiency
Renewables
EU leaders agreement March 2007
1990
- 20%
2020
- 20%
20%
EU leaders agreement 23 October 2014
1990





- 40%
EU and nationally binding targets
EU ETS sector – 43%, Non-ETS
sector – 30% [ref. 2005]
Non-ETS: target to be broken down
to national targets for every Member
States (burden sharing)
ETS: cap to be tightened to - 2.2% /a
Market Stability Reserve


EU binding target
not to be broken
down to binding
national targets for
Member States (but
they can chose to
set national targets)
2030
- 27%
27%


EU indicative target
to be reviewed in
2020, aiming at 30%
for 2030
RWE East
November 2013
PAGE 6
Germany being the forerunner with “Energiewende” – but
what does it mean for market participants?
> 100.000s of new energy producers benefiting from generous RES FIT
> Million private households paying the invoice for “Energiewende”
> Industrial/commercial customers benefiting from decreasing wholesale
prices – not only in Germany but in Europe as a whole
Conventional power plant operators suffering huge losses due to sharply
reduced load factors and decreased wholesale prices …
> … but they are the backbone of secure supplies!
RWE East
November 2013
PAGE 7
EU and in particular Germany by renewables support
schemes provoked a steep photovoltaic boom …
Photovoltaic capacity in Europe
Key messages
> Photovoltaic (PV) boom in Germany
ongoing incentivated by
80000
70000
- drastically falling module prices
- generous subsidies
60000
 37.950 MWp PV as of 30.09.2014
40000
> Other EU countries, mainly Italy, but
also France and UK catching up
30000
20000
> PV will continue their growth
10000
DE
IT
ES
FR
BE
CZ
GB
20
12
20
11
20
10
20
09
20
08
20
07
20
06
0
20
05
MW
50000
- system parity will be reached for more
and more customers
- …due to decreasing PV prices
- …and even with reduced subsidies
Other EU
RWE East
November 2013
PAGE 8
… pushing inflation of electricity bills in Germany …
Source: BDEW, GermanEnergy and Warter Association, May 2014
RWE East
November
March
20142013
PAGE 9
… and reducing plant margins and load factors (Germany)
Short-term variable costs
[€/MWh]
Without power production under the
Renewable Energy Act
Steep curve because the demand is
price-inelastic in the short term
Demand
midday
Market price
midday
Hydropower
Nuclear
Lignite (new/old)
Short-term variable costs
[€/MWh]
Hard coal (new/old)
With power production under
the Renewable Energy Act
Gas (new/old)
Demand
midday
Oil
Market price
midday
Margin loss
New market
price
REA
Generation capacity
37,9 GWp PV + 35,4 GW Wind power as of 9/2014
RWE East, October 7, 2014
PAGE 10
Decentralisation of the energy industry is the future
RWE East
November 2013
PAGE 11
Offering customers more than only commodity
> Home automation
> Networked home
appliances
> Heat, electricity storage,
decentralised generation
(Photovolatics, CHP)
> Electro mobility
> Energy consulting
> Energy efficiency
RWE East
November 2013
PAGE 12
Europe needs consistent energy & climate policy to really
protect climate and to retain competitiveness
> ETS is basically the only market mechanism to efficiently steer CO2 /
GHG emissions
> Not integrating the non-ETS sector and setting different targets
(renewables and energy efficiency) severely harm ETS efficiency as well
as insufficient flexibility to deal with economic depression
> Market stability reserve may lead to some improvements but sustainable
effects on higher CO2 prices are doubtful
> Thus multi-regulation approach instead of single market approach of
ETS may determine climate energy & climate policy in the future
> EU will step further on with the internal energy market in many areas but
contradictive approach in climate protection may harm competitiveness
of EU in the world
RWE East
November 2013
PAGE 13
Thank you for your attention
For further information about RWE:
http://www.rwe.com/web/cms/mediablob/de/108808/data/2495606/54/rwe/investorrelations/praesentationen-videos/praesentationen/Facts-Figures-2014.pdf
RWE HR
18/07/2015
PAGE 14
Back Up
RWE HR
18/07/2015
PAGE 15
EU ETS - CO2 surplus until 2020
Source: Öko-Institut
RWE HR
18/07/2015
PAGE 16
EU ETS – Price projection until 2030
Source: Point Carbon, Sandbag
RWE HR
18/07/2015
PAGE 17
…. share of taxes & levies amount to more than 50%
Source: GermanEnergy and Warter Association, May 2014
RWE East
November
March
20142013
PAGE 18
...reducing operation and challenging economics of our
conventional power plants
Utilization of a German CCGT unit 2009 compared to 2011
Production in June and July 2009
Production in June and July 2011
MW
MW
Juni 2009
Juli 2009
Juni 2011
Juli 2011
RWE East
November 2013
PAGE 19
RWE was pushed to be the European first mover in order to tackle
volatile Renewable power generation with a conventional power
fleet
Where are we today?
e.g. Coal Power plant 700 MW
RWE is European frontrunner for Operational
excellence. This allows improvement processes over the
value chain, having different approaches as power plant
manufacturers
RWE gathered experiences to boost power plant
parameter
for market driven operation including fast
.
demand tracking and short optimized start-up time.
The complete overhaul planning was adopted to
market conditions with longer operational times and
shorten revision periods
Within its International fleet RWE executed several
optimisation and efficiency programs considering
different cultural characteristics
The RWE internal elaborated work safety program
reduced the overall LTIF values down to less than 3
Problem:
DeSOx from the 80‘s under dimensioned
- objective: SOx 400 mg/m3  200 mg/m3
- National coal to Import coal
Budget 75-90 Mio €
Solution:
Optimisation of existing equipment instead of new
built
Start:
End:
2010
2012
Resources:
3 FTE during period time
Other:
Punctual support for quality checks and overhead
Invest new
solution
8 mio € instead of MTP planning with 75 mio. €
Internal
result:
MTP reduction of 67 mio. €
RWE East, October 7, 2014
PAGE 20