Recent Facts about Photovoltaics in Germany

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1 hotovoltaics in Germany Recent Facts about P Last update: October 2 8 5, 201 Current version available at -pv-in- -about -facts https://www.ise.fraunhofer.de/en/publications/studies/recent germany.html Compiled by Dr. Harry Wirth aics Division Director Photovolt Modules and Power Plants Fraunhofer ISE Contact: Karin Schneider Press and Public Relations 5147 Phone +49 761 4588- Fraunhofer Institute for Solar Energy Systems ISE Heidenhofstrasse 2 79110 Freiburg Germany [email protected] Citation note: Recent Facts about Photovoltaics in Germany, Fraunhofer ISE, download 5, 2018 from https://www.pv -fakten.de, version of October 2 ) 181025_Recent_Facts_about_PV_in_Germany.docx 1 (86

2 Table of Contents Inhaltsverzeichnis What purpose does this guide serve? ... 5 1 2 Are we reaching our annual capacity target? ... 5 3 Does PV contribute significantly to the power supply? ... 5 4 Is PV power too expensive? ... 6 Levelized Cost of Energy ... 7 4.1 9 4.2 Feed- in Tariff ... 4.3 Remunerations Paid ...11 Total Pricing on the energy exchange and the merit order effect ...12 4.4 Determining the Differential Costs ...14 4.5 Privileged Electricity Consumers ...15 4.6 4.7 EEG Surcharge ...15 5 Subventions and Electricity Prices ... 18 5.1 Is PV power subsidized? ...18 5.2 Are fossil fuel and nuclear energy production subsidized? ...19 5.3 ...20 -positioned home owners? Do tenants subsidize well 5.4 ...21 Does PV make electricity more expensive for householders? Does PV increase the electricity price for industry? ...22 5.5 Are we exporting large amounts of PV power to other European nations? 23 6 24 Can new PV plants bring reasonable rates of return? ... 7 8 Does installing PV only create jobs in Asia? ... 26 Are large power plant operators interested in PV? ... 28 9 10 Is PV research taking up high levels of funding? ... 30 Does PV power overload our energy system? 11 31 ... 11.1 Transmission and distribution ...31 11.2 Volatility ...32 11.2.1 Solar power production is predictable ... 32 11.2.2 Peak production is significantly lower than installed capacity ... 33 Solar and wind energy complement each other 11.2.3 ... 34 ...35 Controllability 11.3 11.4 ...36 power plants response fossil and nuclear Conflicts with slow- 181025_Recent_Facts_about_PV_in_Germany.docx 2 (86 12 December 2018 )

3 11.5 Does volatile solar power endanger security of supply? ...38 ...38 11.6 Does the expansion of PV have to wait for more storage? 12 Does the manufacture of PV modules consume a lot of energy? ... 39 13 Do PV Power Plants Require Excessive Amounts of Area? ... 39 13.1 ...39 Will Germany be completely covered with PV modules? 13.2 Does new PV capacity compete with food production for land? ...39 14 Are PV plants in Germany efficient? ... 40 14.1 Do PV plants degrade? ...41 ...42 14.2 Can PV modules become soiled? 14.3 ...42 Do PV plants often operate at full capacity? Does PV make relevant contributions to climate protection? ... 45 15 emissions danger the climate? ...45 15.1 Do anthropogenic CO 2 15.2 Does PV make a significant contribution to reducing the CO emissions? ...46 2 In addition to CO 15.3 are there other environmentally harmful gases released 2 during the production of PV? ...48 15.4 Do dark PV modules warm up the Eart h through their absorption? ...48 16 Are PV systems capable of replacing fossil fuel and nuclear power plants? 49 17 Are we capable of covering a significant proportion of our energy demand 49 with PV power? ... ...49 Energy demand and supply 17.1 17.2 ...54 Energy scenarios ...57 17.3 Compensatory measures Keeping PV power production constant ... 17.3.1 57 17.3.2 Complementary operation of existing power plants ... 58 17.3.3 Decreasing energy consumption ... 58 17.3.4 Load management ... 59 17.3.5 Balanced expansion of PV and wind power capacities ... 60 17.3.6 Grid expansion ... 60 Combined heat and power solution 17.3.7 ... 61 17.3.8 ... 62 Electromobility Energy storage ... 62 17.3.9 Overview ... 65 17.3.10 ... Do we need PV production in Germany? 68 18 19 Do PV modules contain toxic substances? ... 68 19.1 Wafer -based modules ...68 19.2 Thin- film modules ...69 19.3 Solar glass ...69 back schemes and recycling Take- 19.4 ...69 3 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 )

4 Are there enough raw materials available for PV production? ... 69 20 20.1 Wafer -based modules ...69 20.2 Thin- film modules ...70 Do PV plants increase the risk of fire? ... 70 21 Can defective PV plants cause a fire? 21.1 70 ... 21.2 Do PV plants pose a danger to firefighters? ...71 21.3 Do PV modules prevent firefighters from extinguishing fires externally from the roof? ...71 21.4 Are toxic e missions released when PV modules burn? ...72 22 Appendix: Terminology ... 73 ...73 22.1 EEG surcharge 22.2 Module efficiency ...74 22.3 ...74 Rated power of a PV power plant Specific yield ...74 22.4 22.5 System efficiency ... 74 22.6 Performance ratio ...75 22.7 Base load, intermediate load, peak load, grid load and residual load ...75 Gross and nets power consumption 22.8 ...75 22.9 External costs [DLR1] ...76 Appendix: Conversion tables [EEBW] ... 77 23 24 Appendix: Abbreviations ... 78 25 Appendix: Sources ... 78 84 ... Appendix: Figures 26 4 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 )

5 1 What purpose does this guide serve? nuclear age behind, paving the way for photovoltaics (PV) Germany is leaving the fossil- production. This com- to play a significant role in a future shaped by sustainable power pilation of current facts, figures and findings is regularly updated. It aims to help in cr e- ating an overall assessment of PV growth in Germany. 2 Are we reaching our annual capacity target ? No. In 2017, GW of new PV power plant capaci ty was reported to the Federal Network 1.75 Agency ny (as of 2018- 31-01), which c orre sponds to almost 2% of total new in Germa PV he capacity worldwide. In the German Renewable En ergy Act EEG 2014 and 2017, t [EEG] . The coalition PV federal government set down an annual target of 2.5 GW agreement of March 2018 schedules increasing the share of renewable energies (RE) to 65 percent of gross electricity consumption by 2030. For this purpose, a steady annual PV expansion of about 5 GW is necessary [AGORA]. or all of of by 2050, Germany’s energy demand with renewables To meet most ca. 150 - 200 GW PV installed capacity is required by 2050 [ISE5, IWES2]. This means that a n a v- s- erage of 4-5 GW PV must be installed annual ly up to 2050. With time, the older PV sy tems be replaced. As of now . a large role , replacing installations have not played must However, once the targeted capacity of 200 GW PV has been reached and assuming an that . PV must be re placed each year operating life of 30 years 6-7 GW , estimates show 3 Does PV contribute significant ly to the power supply? Yes. -generated amounted to about 40 TWh [BDEW5 ] and power According to estimates, PV approximately 7.2 percent of Germany’s net electricity consumption including covered grid losses ( final energy, see section 22.8) in 2017. Renewable energy as a whole (RE) accounted for c a. percent of net electricity consumption, while PV and total RE in 39 6.7 accounted for ca. and 36 percent of Germany’s gross electricity consum p- percent tion respectively . On sunny weekdays, PV power can cover 4 5 percent of the momentary electricity demand. On weekends and holidays the coverage rate of PV can reac h 60 per cent. At the end of 2017 , the total nominal PV power installed in Germany was ca. 43 GW, 31- ([BNA2], installed capacity of all subsidized PV systems, as of 2018- 01) distributed over . [BSW] power plants million 1.6 5 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 )

6 1: Percentage renewable energy in net electricity consumption (final energy) for Germ Figure a- ny, data from [BMWi], [AGEB5] 4 Is PV power too expensive? It depends on the benchmark used. It is difficult to compare the costs of PV electricity with fossil and nuclear electricity since the external costs are ignor ed ( see section 22.9 , [DLR 1], [FÖS 1], [FÖS2]) . The marginal costs for nuclear power are in the order of only 1 €- -fired power 3- 7 €- ct/kWh, for coal cts/kWh, for gas -fired power 6 -9 €- cts /kWh . T he fixed costs of power generation (e.g. investments, capital) are added on top of this . The cost of the fuel is included in the . Although an EU and waste gases of waste treatment the not -wide marginal costs but emissions trading (European Union Emi ssions Trading System, EU ETS) was introduced for the energy sector in 2005 to make CO emissions more expensive and to internalize 2 costs to some extent. Due to an over abundance of available certificates, however, the price had collapsed by the end of 2017. Estimates of the direct and indirect follow -up costs also facing Germany in the coming years due to global climate change are not yet known. Expenditures for dismantling are nucle shut down ar power plants which have been the most proba bly not covered by the operator’s reserves . The creation and maintenance of sites for nuclear waste in Germany will probably cost much more permanent storage than the 23 billion euros given to the German states for storing Germany’s nuclear n- waste . Damages from nuclear acc idents are covered up to 250 million euros by the i surance company and up to 2.5 billion euros by an operator pool. For amounts above ison, this compar , the nuclear power plant operator is liable with its assets. [ATW1]. As a nuclear disaster amounted to ca. 100 billion euros, a damage caused by the Fukishima value which is many times higher than the company value of the German nuclear power plant operators. The uncovered risks are carried by the tax payers. 6 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 )

7 In new MW power plants, PV electricity is produce -5 €- cts/kWh, d at costs starting at 4 electricity is directly fed into the grid. The power under the condition that the produced produced by the older, smaller power plants is much more expensive, due to the prev i- ously higher investment costs. In order to bring on the energy transformation and foster Act investments in PV systems of all sizes, the German Renewable Energy Sources RES (Erneuerbare Energien Gesetz EEG) was created in 2000. This instrument guarantees a n their installations with an a p- fixed rate of purchase and enables plant operators to ru propriate profit. The aim of the Renewable Energy Source Act is to effect a continual reduction in the cost of electricity generation from renewables by creating a market for RE systems. (See section 4.1). Increasing capacity is only one of the cost s in Germany’s energy transformation. For a PV e costs associated with PV expansion stood in the forefront of the discus- long time, th sions. Over th e past few years, PV and wind have an established place in Germany ’s en- electricity ge ergy system , bringing n ew cost s to the fore . Besides the costs for ply n- sup eration, costs in the following areas are becoming increasingly significant : • Expanding the north- south power lines for wind power • Shutdown of nuclear power plants • Dismantling and modifica tion of fossil power plants to enable a more flexible o p- eration during reduced utilization -stabilization for grid i.e. storage and converter Build up capacities (stationary • batteries and electric mobility heat pumps, heat storage, P ow- age, , pumped stor er-to-X) installations but rather, as with the e x- These costs are not caused by the increase in PV are associated with the normal progression of the energy transfor- pansion of PV itself, mation. All energy consumers for whom a long -term sustainabl e energy supply must be created are, in turn, responsible for the costs of its realization. 4.1 Levelized Cost of E nerg y between the total The levelized cost of energ y (LCOE) for a PV power plant is the ratio y production (kWh) over time. economic life costs of the plant (€) and its total electricit its The for PV power plants [ISE1] is based primarily on: LCOE 1. purchase investments to construct and install the plant ) 2. financing conditions (return on investment, interest, plant lifetime 3. operating costs over the lifetime of the plant (insurance, maintenance, repairs) 4. irradiance availability 5. lifetime and the annual degradation of the power plant -of-scale, the in- and economies Thanks to technological progress , the learning curve for PV power plants vestment costs , have fallen an , which make up the greatest outlay 7 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 )

8 de- 13 percent per average of – in all, 75 % since 2006. Figure 2 shows the price year since 2006 for velopment . rooftop installatio ns between 10 kW in Germany to 100 kW p p s with rated Figure 2: Average end customer price (net system pr ice) for installed rooftop system nominal , plotted by PSE AG. /EuPD 100 kWp, data from BSW power from 10 - Module costs are responsible for almost half of the total investment costs of a PV power p- plant of this size. This percentage increases for larger power plants. The price develo ment of PV modules follows a so- called «price learning curve,” in which doubling the total capacity installed causes prices to fall by a constant percentage. Figure 3 shows 400 GW inflation -adjusted world market prices. At the end of 2017, approximately of s to continue PV power had been installed worldwide. Provided that significant progress be made in product development and manufacturing processes, prices are expected to in accordance with this rule. keep drop ping .e. crystalline silicon and The aver age price includes all market -relevant technologies, i thin film. The trend indicates a price reduction of about 24% with a doubling of the cumulative installed capacity. The module prices in Germany are 10 -20% higher than on the -dumping measures of the European Commission. world market, supported by anti The tenders of the Federal Network Agency provide an orientation value for electricity mounted systems (see following section). generation costs from new PV ground- 8 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 )

9 Figure 3: Historical price development of PV modules (PSE AG/Fraunhofer ISE, data from: Strat e- gie s Unlimited/Navigant Consulting/EuPD ). The straight line shows the price development trend. -relevant The average price shown include s all mar ket crys- technologies in the fields of talline silicon and thin -film technology. The trend indicates that doubling the cumulative installed PV capacity results in a price reduction of 24 percent . In Germany m odule pri c- es lie about 10- 20% higher than on world m arket , due to anti -dumping measures of l- the European Commission. The licensing round of the Federal Network Agency (see fo field open- new for electricity generation costs lowing section) gives a benchmark for the . PV systems (< 10 MW) Feed 4.2 -in T ariff The German energy transformation require s large investments in solar and wind capac i- guarantee ty. In order to build a PV power plant today, an investor needs a purchasing that stipulates a fixed price over the economic life of the power plant. Otherwise, the invest or may delay his investment based on trends that show PV power plant costs con- deflation). Since all installed PV power plants produce electricity at the tinue to decline ( same time, the more expensive electricity from the older power plants would no l onger be competitive in the future . To delay PV expansion in hopes of lower costs in the future would not only be a cynical reaction with respect to the progressing climate change but would also slow down the dynamics of cost reductions. The first EEG in 2000 and the subsequent changes have installments in Germany . ed shap the growth of PV a fixed expansion corridor for RE as a share of gross electricity The EEG 2017 specifies ion, attempting to both support and restrict the growth in PV capacity. consumpt 9 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 )

10 PV Self -consumed • energy is taxed above a certain nominal power (approx. 10 kW) with 40% of the current EEG surcharge (Section 4.7), which means that the PV electricity generation costs increase by approx. 2.7 € ct / kWh p receiv systems up to 100 kW PV New -in tariff e a fixed feed • • New PV systems between 100 and 750 kW p must sell their energy by direct ma r- ing . ket • New PV systems over 750 kWp are required to partake in calls for tender and -production. may not be used for self s, the installation • Numerous other regulations exist regarding potential areas for capability of remote power and reduction, among others. power control -in tariff for PV power as a function of commissioning date, average remuneration 4: Feed Figure of the bidding rounds of the Federal Network Agency , electricity prices from [BMWi1] up to 2016 and with estimates thereafter , average compensation for PV power, partly estimated [BMWi5]. a- Depending on the system size, t he feed -in tariff for small roof s ystems pu t into oper up 11,84 to €-cts/kWh to the operator and is guaranteed tion by October 2018 can be , the over the next twenty years. For medium -size systems from 750 kW up to 10 MW -in tariff is set by the licensing agreement. The last licensing round of the Federal feed . Network Agen cy on the bid date February 1, 2018 set a mean val ue of 4.33 €-cts/kWh for the same bid date systems To compare: The tender for electricity from onshore wind €-cts/kWh. 60 brought an average price of 4. On the global scale PV electricity prices in locations with high radiation levels has been offered at record low levels between 1.5 – (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 10 )

11 2.5 cts/kWh (e.g. in Saudia Arabia for a 300 MW plant). In constrast, the negotiated strike price for the planned nuclear plant Hinkley Point C in England t ranslates essentially to a feed -in tariff of 12 €-cts/kWh plus inflationary adjustment for a period of 35 years. The plant is pl anned to start operation in 2025 . The feed -in tariff for PV power drops faster than any other regenerative power source, in the last 15 years approx. 80% for small rooftop installations and 90% for systems of medium size. he diffe The user who consumes self -generated electricity can by no means consider t r- y from the grid) and the EEG feed -in electricit ence between the gross electricity price ( tariff (estimated value of the electricity generation costs) as profit. For one, self- -hour withdrawn. Considering that consumption increases the fixed costs per kilowatt the same connection costs are distribut ed over a smaller amount of withdrawn electric i- ty, the electricity purchased per kWh becomes more expensiv e. Also , the electricity and withdrawn from a PV system for self -consumption may be subject to extra taxes appreciable , depending on the tax classification of the values reach can es. These charg Electricity produced by PV systems > 10 kWp which were put into oper a- system [SFV]. tion after August 2014 are subjected to a portion of the EEG levy. year After 2020, the feed -in tariff will gradually expire for th e oldest plants, as their 20- pay ment period is reached . However, these plants will continue to supply power at le v- elized costs that undercut those of all other fossil fuel and renewabl e energy sources, due to low operating costs and zero fuel costs. Remunerations Paid Total 4.3 As stipulated in the EEG, t he total costs for the -in are deter- remuneration of PV feed mined each year by the transmission system operators (Figure 5). In 2017 the total costs 10.3 . The already radical reduction 5 billion euros amounted to an estimated [BMWi5] -in rates and system size in addition to the phase out of the EEG feed- in feed in tariff for new PV systems at a threshold of 52 GW capacity ensures that total remunerations paid for PV are limited to 10 B]. Further PV expansion within the -11 billion euros year [ÜN per 5). Additional Figure existing EEG will only moderately increase total remunerations ( PV expansion will not lead to a decrease in the total remuneration. measures to throttle n- ould, however, cause a slowdown in the construction of very inexpe Such a measurec sive PV systems. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 11 )

12 [BMWi1] , d and [BMWi5] Figure 5: PV expansion and total feed -in tariff ata from 4.4 Pricing on the energy exchange and the merit order effect PV electricity, a mean electricity price is calculated To estimate sales revenues from . The running the European Energy Exchange on based on the prices achieved EEX price s offer specific quantities of rder principle. Plant operator is de termined by the merit o define ranked in ascending order of price d mostly by their marginal costs, and electricity, he purchase offers of power consumers are arranged in descending order. 6). T (Figure The point of intersection of the two curves shows the energy exchange price of the e n- tire quantity traded. The most expensive offer influences the profit margins of the cheaper suppliers. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 12 )

13 6: Pricing on European Energy Exchange EEX [Roon]. Figure the -in has legal priority, meaning that it is found at the start of the pricing PV power feed scale due to the merit order effect. Wit h fictitious marginal costs of zero , PV power is always sold when available. PV power is of predominantly generated during the middle the day when power consumption (and previously, but no longer, the electricity pr ice) is x- During these peri ods, PV power mainly displaces electricity from e at its midday peak. -fired power plants (especially gas peak- pensive load ). This storage plants and pumped- placement lowers the spot price of electricity on the market and leads t o the merit dis order e prices, the profits of all co ffect of PV feed -in (Figure 7). With sinking market n- Further, solar PV plants (nuclear, coal, gas, hydro) c- decrease. ele ventional power also lowers the capacity (gas and -load power plants tricity itional peak utilization of the trad in particular.) hydro 7: Influence of RE on the average spot price on the energy exchange (EEX) [BDEW2]. Figure (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 13 )

14 The increasing amount of renewable electricity being fed into the grid, lower coal prices and surplus of CO2 allowances have drastically depressed prices on the EEX (Figure 8). On the electricity market, PV power had an average market price factor of 1 over the course of the year. This means that the revenue per kWh is equivalent to the average factor for wind was about 0.9 [ÜNB]. electricity price on the exchange. The market price the medium will decrease on With the futher expansion of volatile RE , the market price term because the electricity supplied increases with higher feed -in and the feed -in is controlled by the supply side. -in of renewabl e electricity, the EEX becomes more and more a With increasing feed related provision of ng a price for the demand- electricity, generati market for residual renewable electricity and no longer reflecting the value of electricity. Determining the Differential Costs 4.5 The differential costs shall cover the gap between the remunerations paid out according to the EEG promotion and the sales revenue collected from PV electricity. Fo llowing a peak of almost 7 n- €-cts/kWh , the spot price of electricity, used to determine the differe below 4 €-cts has since fallen to amount of electr icity from PV and . The /kWh tial costs, wind that is fed into the grid is increasing. This reduces the spot market price through the merit order effect and thereby, paradoxically increases the calculated differential costs. According to this method, the more PV installed, the m ore expensive the kWh price of PV appears to be. Price drops in coal and CO reduce the similarly allowances 2 spot price and thus increase the calculated differential costs. differential costs price and the calculated 8: Development of the average spot electricity Figure ]. [BDEW2 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 14 )

15 4.6 Privileged Electricity Consumers ermine who shall finance the transformati Policy makers det on to renewable energy . They decided that energy , i.e . those who spend a high pr o- [BAFA] -intensive industries tion of their costs on electricity, are to be exempted from the EEG surcharge por to a large extent. In 2015, industries we 4.8 billion euros. The re relieved of costs totaling ca. total electricity of 107 TWh falling -fifth of under this exemption amounts to almost one Germany’s entire power consumption. Figure 9 shows the estimated breakdown of the EEG surcharge paid by industry i n 2015 . This wide -scale exemp tion increases the burden on the other electricity customers, in particular, private households, who account for almost 30 percent of the total power consumed. 9: Electricity consumed and EEG surcharge for industry (estimated for 2015) [BDEW24] Figure The surcharge exemption for privileged customers as set down in the EEG has further increased the nominal EEG surcharge per kilowatt hour (see Section 5.5 ). At the same benefit are energy -intensive industries prices on during spot from the lower ing time, peak- times. It is evident that part of the surcharge indirectly end s up in the poc k- power ets of these energy -intensive industries : «Energy -intensive compa nies, which are either largely exempt from the EEG surcharge reduced rate of 0.05 €- cts/k Wh, benefit or pay a the most from the merit order effect. For these companies, the low er prices brought about by the merit order effect overcompensate s for the costs incu rred as a result of the by far EEG surcharge .” [IZES] Energy therefore benefit from the -intensive companies tion without making a noteworthy contribution. energy transforma 4.7 EEG Surcharge out generated and the sales revenues The difference between the remunerations paid from re newable electricity ( supplemented by other it ems) is compensated by the power consum- EEG surcharge (Figure 10). The cost of the surcharge is borne by those For 2018, t ion scheme. do not fall under the exempt , who ers is set at he EEG surcharge 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 15 (86 )

16 €-cts/kWh . End users must pay value added tax (19%) on this surcharge so that 6.792 the costs imposed on private households increases to 8.08 €-cts/kWh . parameter 10: Influential Figure s and calculating method [ÖKO] the EEG surcharge for s the EEG surcharge s- s/kWh in ct show Figure 11 and the sum paid out for installed sy o- tems. Since the measure basing the surcharge on the EEX spot market price was intr -in tariff have been drifting apart. The i duced in 2010, the surcharge and the feed n- ing amount of privileged consumers in energy creas -intensive industry and other measures have also contributed to this drift. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 16 )

17 Figure 11: Development of the EEG surcharge and the EEG differential costs [ISE9] Based on the way i t ́s defined , the EEG surcharge would increase for the following re a- sons : 1. increasing quantities of power used by «privileged ” consumers virtually exempt from contributing to the su are r- Because energy -intensive indus tries , smaller -sized consumers, such as private households , small industry and charge commercial consumers must bear additional costs amounting to billions of euros. 2. and merit order effect PV feed -in during daytime. PV power feed -in during, for example, midday when the EEX spot price formerly , benefit ting electricity customers. peaked reduced the electricity price very effectively -in , however, ). At the same time (See section 4.4 the difference between the feed tariff and the market p rice calculating the EEG surcharge , increased. , the basis of This disadvantages smaller customers bound to pay the EEG levy. 3. Merit order effect and electricity surplus For many years, increasingly more power has been produced in Germany than effe c- tively con sumed , and n amely power from fossil and nuclear power plants with low marginal costs being used as expensive peak load power plants. Due to the merit or- der effect, this surplus reduces the market price, pushing peak power plants out of the energy mix. ing electricity 4. declin efficiency measures through consumption tives supporting more efficient energy use (e.g. energy saving lamps) reduc e the Initia surcharge amount of electricity purchased , and thereby increase the kWh per con- sumed. 5. Additional expenditur e from compulsory direct marketing The compulsory direct marketing creates additional administrative expense t hat remuneration. EEG power produce rs must compensate with a higher -consumption Increasing production from RE power, without self 6. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 17 )

18 The expansion of RE drives the levy up at least on the short term both directly (be- cause more feed -in remuneration is paid out) as well as indirectly (due to the r e- duced price of emission certificates leading to a cheaper price for energy from fos sil fuel plants.) 5 Subv entions and Electricity Prices 5.1 Is PV power subsidized? No . The support is provided through a surcharge , which applies also to self- produced and self -consumed PV electricity. not supported by The investment incentives for PV power are rag- public funds. While f -in tariff mentary reports often quote figures relating to past and future PV power feed pay ments in the hundreds of bill ions and call these « subsidies”, a true subsidy is sup- porte d by public funds. The EEG, on the other hand, makes provisions for a surcharge in which energy consumers make a compulsory contribution towards the energy transfo r- mation, a necessary and agreed upon resolution. This interpretation is also supported by but rather the European Commission. The EEG surcharge is not the total remuner ation, (remunera paid tween costs the difference be tial costs, calculated as the differen tion) and revenues received (see section 4.5 cumulative costs paid out for PV power fed ). The into the grid up to and including 2016 amounted to ca. 70 billion euros . To calculate the EEG surcharge, the financial benefit s of PV power are determined a c- cording to the market clearing price on the European Energy Exchange (EEX) in Leipzig . By this method, the benefits of PV power are underestimated systematically . For one, PV power has long been having the desired effect on this market price, namely that of dri v- r- exte 4.4 ing it downwards (see section ). Second, the market price leaves out the heavy fossil fuel and nuclear power production (section 5.2 nal costs of nsidering total ). Co costs of fossil fuel and nuclear power production of ca. 10 € -cts /kWh , the additional costs of the PV feed -in tariff decline so quickly that the first intersection point occurs already in 2013 4). The marginal costs decrease to zero and thereafter are Figure (see negative. As it is expected that the external costs of fossil fuels and nuclear power shall soon be- come impossible to bear, the increase in RE shall ensure that electricity remains available at sustainable prices in the long term. Our industrial sector needs better prospects for a , as do householders. secure energy supply in the future from the bitter lessons experienced The electricity policy can learn in housing construc- tion policy. Because comprehensive measures to renovate the existing building stock -income households must apply for social not been undertaken to date, many low have funds to be able to pay for their heating fuel. These funds flow, in part, then to foreign suppliers of gas and oil. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 18 )

19 What would be the pri ce to pay if the German energy transformation fails? Without required to costs as to the total knowing this figure, it is difficult to make a statement transform our energy supply system. fossil fuel and nuclear energy production subsidized? Are 5.2 Yes. Policy makers also influence the price of electricity generated by fossil fuel and nuclear power plants. Political decisions determine the price of CO emission allowances, condi- 2 r- tions for filtering smoke and, where necessary, for the permanent storage of CO2 (ca bon capture and storage, CCS), the taxation of nuclear power as well as insurance and ts. This means that policy makers decide to safety requirements for nuclear power plan what extent today’s energy consumers must bear responsibility for the elusive risks and l fuel and nuclear sources. As these aspects are burden of producing electricity from fossi mix less hat PV power will make the electricity y likely t more rigorously priced, it is ver expensive . Until this happens, fossil fuel and nuclear power will be sold at prices that conceal their external costs (see section 1], [FÖS1]) and pass the burden on to 22.9, [DLR future generations. Contrary to initial plans, and with costs of 5- 15 euros per metric ton of CO emi , CO s- 2 2 sion allowances only have a minor effect on the costs of generating power from fossil d with estimated . Compare fuels figure 12) , realistic prices of 70 euros per metric (see a subsidy of more than 20 billion euros per year for fos ton [DLR1 ], this results in sil fuel power plants . allowances from 2008- 12: Price of CO 2 2013 on the EEX spot market Figure (http://www.finanzen.net/rohstoffe/co2 -emissionsrechte/Chart) (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 19 )

20 It is currently impossible to pinpoint the actual costs and risks of generating power from The majority of these shall only emerge in the future and nuclear sources. fossil fuel (CO -induced climate -related catastrophes, nuclear disasters, the permanent storage of 2 nuclear waste, nuclear terrorism, permanently contaminated sites), making a compar i- fic ult. According to experts, t he risks of nuclear power are so severe that insur- son dif ance and reinsurance companies the world over are not willing to offer policies for plants generating energy of this kind. A study conducted by the Versicherungsforen Leipzig set s the limit of liability for the risk of the most serious type of nuclear meltdown at 6 trillion euros, which, depending on the time period over which this sum is accrued, would increase the electricity price per kilowatt hour to between 0.14 and 67.30 eur os [VFL]. As a result, it is essentially the tax payers who act as the nuclear industry’s insur- ers. This is essentially forced upon them both against their wishes, since the majority of unspecified Ger mans have been opposed to nuclear energy for many years, and as an amount, because no fixed price has been established to date for damage settlements. This is a subsidy whose burden on the future cannot be predicted. According to estimates by the IEA, power generated by fos sil fuels received more than . According to a study by the [IEA4] billion dollars of 544 subsidies worldwide in 2012 International Monetary Fund, total subventions worldwide for coal, oil and natural gas in 2015 are estimated to be 5.1 billion US$ [IW F]. 5.3 Do tenant s subsidize well- positioned home owners? No. This notion, which makes a popular headline and in this instance is taken from the « Die Zeit” newspaper published on December 8, 2011 is a distorted image of reality. Except -intens for the politically willed exception granted to energy , the costs of ive industry switching our energy system to RE are being borne by all consumers (including all n- -by-cause pri households and thereby home owners and tenants) according to the cost ciple. In addition to PV, these costs also contribute funding to wind power and other renewables. All electricity customers can decrease their energy consumption by selecting and using energy efficient appliances. Many municipalities offer free consultations on energy saving advice and also grants to help pay for new, more efficient devices. Elec- tricity tariffs that increase with consumption would be a suitable means to reduce the burden on low -income households and simultaneously to reward energy efficiency. PV systems installed by home owners are usually under 10 kWp. The systems within this power range make up less than 15% of the total installed PV power in Germany, while bove 500 kWp make up about 30 % (Figure 22). The larger systems are large systems a often financed with citizen participation or funds, in which tenants can also participate. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 20 )

21 5.4 Does PV make electricity more expensive for householders? Yes. However , private households bear many additional charges within their electricity bill . r- The German legislature set s the principles for calculating and distributing the EEG su , and other taxes and fees, the effects of which are currently detrimental to charge holders. house €- 13: An example showing components m aking up the domestic electricity price of 29,2 Figure (CHP: German Combined Heat and Power Act in 2017 ); German Electricity Grid Access cts /kWh -NEV): easing the burde ; concession fee: fee -intensive industries n on energy Ordinance (Strom for using public land; offshore liability fee; AbLa: Levy on interruptible loads), Data from [BDEW3]. household A typical kWh paid roughly an annual power consumption of 3,900 has . Figure i- electric 29,3 €-cts/kWh in 2016 [BMWi1] this 13 shows a typical breakdown of n- The electricity levy was introduced in 1999. According to the law, the levy i price. ty tends to make electricity more expensive; the proceeds go principally into the public pension fund. Private households must pay value added tax on the electricity levy and the EEG surcharge. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 21 )

22 Figure 14 : Development of gross domestic electricity prices (2017, estimated at 3% increase) , net -scale industrial consumers [BMW electricity prices for large i1] and the EEG surcharge; about 55% of the gross domestic electricity pric e is made up of taxes and fees . increase the electricity price PV Does 5.5 industry? for Yes and no. There are clear winners but also losers. According to the German Industrial Energy and Power Federation (VIK), th e electricity year low for medium voltage customers x- – provided that they a re e price is at a ten -surcharge the VIK final Today 15). empted from the EEG (Figure . (See VIK base index, -privileged businesses is twice as high as the selling price index for non base index. This is price. e to the EEG surcharge which makes up part of the final selling mainly du (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 22 )

23 [VIK] customers 15: VIK e medium lectricity price index for Figure -voltage V power to other European 6 Are we exporting large amounts of P nations? from coal power plants. No, the increased export surplus comes primarily Figure shows the increase in electricity exports since 2011 [ISE4]. The monthly values 16 of the Energy Charts (www.energy c- was conspi -charts.de) show tha t the export surplus uously high in winter, i.e. in months with a particularly low PV power production. The age price per kWh achieved in electricity exports has been somewhat below the a aver v- erage import price for some years. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 23 )

24 Figure 16: Electricity export (negative values indicate export) for Germany [ISE4] The fact that the German pow er plant park is increasingly producing for export should also be related to the low production costs for coal electricity, in particular the low CO 2 certificate prices (Section 5.2) of recent years. 7 Can new PV plants bring reasonable rates of return? Yes . - In principle, new PV installations can bring profits through grid feed -in as well as self consumption. Although the legislator curtails both business models through a package of measures (Section 4.7), good returns are possible due to the sharp drop in prices for PV modules. This also applies to PV systems without or with only low self -consumption. Self -consumption becomes more worthwhile, the greater the difference is between the ms without e n- and the LCOE of the PV system. For syste cost of delivering PV electricity -consumption o- supply and demand pr is dependent on coinciding ergy storage, the self file s. Independent of the system size, households generally consume 20- 40 % of their of PV cove r- self -produced electricity [Quasch]. Larger systems increase the percentage age for the total power, however, reduce the percentage of self -consumption. Com- -consumption as mercial or industry consumers achieve an particularly high rate of self long as their consumption profile doesn’t collapse on the weekends (e.g. Refri gerated warehouses, hotels and restaurants, hospitals, server centers, retail). Energy s torage and - technologies for energy transformation offer a large potential for increasing the self 17.1 consumption (compare Section ). irradiation The PV system yield is higher in sunnier regions , h owever, regional diffe r- (kWh/kWp ratio -to-one section to specific yield in a one ee ). (S ences do not transfer , such as the module operating temperature or the duration of 22.4 .) Other parameters the annual yield affect snow cover, also . (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 24 )

25 Figure 17: Rough estimate of levelized cost of electricity (LCOE) for PV power plants at different annual irradiances To obtain a rough estimate of the discounted LCOE (not adjusted for inflation, see Fi g- were used : ure 17) , the following assumptions optim al orientation of module (approximately 30° south) • • performance ratio (section 22.6) of 85 percent • annual yield degradation of 0.5 percent lifetime of 20 years • • annual operating percent (of plant price) costs of 1 percent • inflation rate of 0 • nominal imputed inter est rate of 5 (average of own and borrowed capital percent investments) In Germany, the annual sum of average global irradiance on a horizontal surface is 1055 2 kWh /m per year [DWD]. y (LCOE) is estimated using the net The levelized cost of energ present value method, according to which, the running costs and LCOE are discount ed the time the plant was commissioned. The LCOE values d by the interest rate given at e- it easier to compare them with the makes termined a re not adjusted for inflation. This s constant in nominal terms but declines in real terms. feed -in tariff which i percent equity investment, th In the event of a 100 to the rate e imputed interest is equal Agency (Bundesnetzagentur) set the return of return. To compare, the Federal Network on equity at 9.05 percent (before corporate tax) for both new and further investments in ectricity and gas networks [BNA1 the el ]. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 25 )

26 It is currently not possible to calculate the energy yield beyond the twenty operati ng -first year of a PV system likely, however, that many plants will continue to generate si g- . It is nificant quantities of electricity at marginal running costs. However, the guidelines gov- erning self -consumption and the future pricing a nd remuneration concept of ESC s as well as any interventions from policy makers also affect yield calcu lations. There is no guarantee on t period. Neither remuneration PV plant’s rate of return during the EEG he manufacturer’s guarantee nor plant insurance policies are able to remove the risk to the the investor entirely. 8 Does installing PV only create jobs in Asia? No , however over the last few years Germany lost many jobs in the PV industry. 36,000 people in Germany [BSW]. In 2016, the PV industry employed Businesses from the following sectors contribute to the German PV indus try: 1. manufacture of materials (silicon, wafers, metal pastes, plastic films, solar glass) cells, modules, in- manufacture of intermediate and final products, including solar 2. verters, supporting structures, cables and coated glass construction of manufacturi 3. ng plants 4. installation (especially trade) Noteworthy shares in the global market in 2016 were the German inverter manufactu r- ers (SMA, KACO and others with more than 10%), poly -silicon producers (Wacker world in second place worldwide) and the market leader), silver paste producers (Heraeus equipment manufacturers. obs were lost in Germa ny in the last few years as a result of company closures Many j and insolvency, which affected cell and module manufacturers, the mechanical eng i- neering industry and installers . In 2007, the plan that the combination of EEG, inves t- ment grants in the (new) eastern states of Germany and research support would help establish Germany as a worldwide leading production site for PV cells and modules ap- peared to work . A German company led the international rankings in production vol- decreased ume . Since then, however, the market share of German manufactures has dramatically industrial policy in Asia the and the huge investments put into in due to there. The labor costs play a subordinate role in this development production capacity because PV production today is highly automated. An im portant aspect, however, is the o- low complexity associated with PV production as compared, for example, to the aut For several years, t o- mobile or microelectronic in dustry. lines that pr -key production urn , which duce very good quality PV modules can be bought off -the -shelf enables fast technology transfer. n- -in tariffs in Germany and Europe have spurned on massive i Effective laws for feed vestments in PV power plants. Alone in Germany, these amounted to investments of 90 billion euros through to 2014 [DLR2] , however, the econom . In these countries ic- political framework is missing in production capacity within a investments for generating (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 26 )

27 . Rather , China and other Asian countries competitive format (e.g. on the gigawatt scale) have succeeded through the creation of attractive conditions for investments and credit to mobilize four billion euro investment capital from national and international sources -scale production lines. for the construction of large In spite of the high import quota of PV modules, a large part of the value chain for PV percent of PV modules power plants remains within Germany. Assuming that around 80 percent ome from Asia, that these modules comprise roughly 60 installed in Germany c of the total PV plant costs (other 40 percent predominantly from inverter and installation percent of the levelized cost of costs) and that initial plant costs make up around 60 -in tariff goes to electricity (rem ainder: capital costs), then nearly 30 percent of the feed Asia for imported modules. Also to consider is that a share of all Asian PV products are produced on manufacturing equipment made in Germany. Figure 18: Employees in the RE sector in Germany [DLR2] s of In the long term, the falling cost PV module manufacturing coupled with increasing c- freight costs and long delivery times shall improve the competitive position of manufa companies in Germany. turing (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 27 )

28 9 Are large interested in PV? power plant operators , large have shown little interest in PV For a long time German power plant operators power production. In 2010, the majority of Germany’s installed PV capacity belonged to private individuals and farmers, while the remainder was divided between commercial enterprises, project planners and investment funds. The four big power plant operators nd Vattenfall (called «big four” in Figure 19) owned a mere EnBW, Eon, RWE a percent. W 0.2 here does their aversion to PV power come from? The electricity 1. rmany is sho wing a declining tendency since consumption in Ge 2007. The construction of new renewable power plants will force either a redu c- tion in the utilization rate of existing power plant parks or an i ncrease in electric i- ty export. 2. Because PV electricity is generated primarily du ring periods of peak load, conve n- peak load power plants are required less often . This reduces t heir utiliz a- tional tion and profitability in particular. Paradoxically flexible power plants with fast r e- sponse times are increasingly in demand. 3. PV power plants deliver power during the day at times when demand is at a peak Figure 43: Schematic representation of a residual load curve for Germany with power supply of 100% EE, with generators (+) and loads ( -); Red: Converters th at price market the lowers 43). (Figure This of produce usable heat or waste heat ll plants presently producing electri electricity EEX, which carries over to a on the c- ity . (Section 4.4 ). Previously, the big power plant operators were able to sell ine x- pensive base load power at a lucrative price during mid day . Since 2011, PV led to price reductions on the energy exchange and thus to dramatic slumps in profit. -down prop- 4. up and shut slow start- Because PV power production fluctuates, the -fired power plants cause difficulties with increasing erties of nuclear of older coal ve electricity prices on PV expansion. One particularly striking example is negati the market. Coal is being burned and the consumers must pay for the electricity. This leads to system wear in places where controls are technically feasible but no in the necessary frequency provi sion exists. s models are required for decentralized PV production as 5. Radically new busines tion coal and nuclear power produc argely . In the wind centralized compared to l tion, the transformation effect is less drastic. sector, especially offshore produc While big power plant producers have shown little interest in PV up to now, large wind farms, especially offshore wind, fit much better into their business model. BIG 4” German power producers began to worsen dr a- As the balance sheets of the « -thirds of its staff to its daughter hey began to react: RWE transferred two matically, t which handles all business related to the energy transformation, including PV innogy, -year report for 2017, it states that Innogy operated less than 100 electricity. In its mid PV at the end of 2016. Similarly, E.ON SE has formed Uniper to handle its tradition- MW al gas and electricity and is now concentrating on renewable energy, including PV. In 2013, EnBW stated that it is redirecting its activities to focus on the energy transfor- mation. As of September 2016, the company operates 50 PV plants. Vattenfall is selling (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 28 )

29 its lignite sector and plans to concentrate on renewable electricity production, and since 2016 also PV. Figure 19 f the total installed capacity of PV plants at the end of 2010 : Division of ownership o [trend:research]. suppliers in Germany recognized proximately 1000 municipal electricity Many of the ap ed by offering the challenge s facing the energy transformation early on and have react new products and integral concepts, e.g. . Figure 20) «virtual power plants” ( Figure (Munich municipal 20: Concept for a virtual power plant of the Stadtwerke München [SWM] works) (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 29 )

30 10 Is PV research taking up high levels of funding? n- hat it took time for renewable e Looking back at previous numbers , Figure 21 shows t ergy and energy efficiency to become a focal point of energy research. 22 Figure s the funding granted for PV research by the federal ministries . show : Germany’s Figure 21 in the Energy Research Program of the Federal Government expenditure by topic in € million [BMWi6]. Funding for PV research categorized by technology in € million [BMWi6]. Figure 22: (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 30 )

31 11 Does PV power overload our energy system ? 11.1 Transmissio n and distribution More than 98 percent of solar power systems in Germany are connected to the dece n- tralized low -voltage grid (Figure 23) and generate solar power consumption [BSW]. As a result, solar power is mainly fed in decentrally and hardly demands to expand the German national transmission grid. High PV system density in a low voltage grid section may cause the electricity production to exceed the power consumption in this section on sunny days. Transformers then feed power back into the medium -voltage grid. At very high plant densities, the transformer station can reach its power limit. An even distribu- tion of PV installations over the network sections reduces the need for expansion. Lef -in of PV power [BSW], Right: Distribution of installed PV power according t: Feed 23: Figure to plant size [ISE10] the ing PV power plants are decentralized and well distributed accommodat thereby local feed the existing electricity grid. Large PV power plants or a -in and distribution of accumulation of smaller plants in sparsely populated regions require that the distribution network and the transformer stations are reinforced at cer tain sites. The further expansion of PV should be geographically even more consumption- friendly , in order to simplify the distribution of solar electricity. For example, Brandenburg or -Vorpommern have installed 3 to 4 times more PV power per inhabitant Mecklenburg than, for example, the Saarland , NRW, Saxony or Hesse [AEE2]. According to a study by the Agora Energiewende, the German electricity grid will be able to transport the required amounts of electricity even with an installed PV capacity , measures to modernize and i of just under 100 GW in 2030 [AGORA]. In particular m- prove the use of existing networks are needed, but no significant development. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 31 )

32 When there are currently network bottlenecks, PV power is rarely the reason (Figure 24). Due to surplus wind power in Northern Germany, electricity deficits due to power plant e- shutdowns (nuclear in Southern Germany) and a sluggish grid expansion, grid bottl necks often occurred in the German transmission grid. Because the grid expansion – a necessary step to alleviate the bottlenecks – will still tak e some time, redispatching measures will be increasingly required in the foreseeable future. Redispatching means that the transmission operators (TSO) intervene in the market -based operation schedule of the power plants (dispatch) to redistribute the elect -in, ricity feed g- prevent power sur es in the grid (preventative redispatch) or to carry out fixes (curative redispatch). Before a -in is reduced (negative redispatch) and afterwards bottleneck occurs, the energy feed , the total cost of redispatch measures 2017 increased (positive redispatch) [BDEW4]. In . amounted to € 1.4 billion lectronically limited electrical energy in GWh / year [BNA3] Figure 24: E Volatility 11.2 Solar power production is predictable 11.2.1 Reliable national weather forecasts mean that the generation of solar power can now 25). Figure accurately be predicted ( , re- decentralized Because PV power generation is gional changes in cloud cover do not lead to serious fluctuations in PV power produc- as a whole. Germany throughout tion (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 32 )

33 [ISE4]. Figure 25: Actual and predicted ho urly generation of power in 2014 Peak production is significantly lower than installed capacity 11.2.2 Due to technical losses (performance ratio PR <= 90%, see section 22.6) and incon- sistent weather conditions, a real generation of electricity above 70% of the installed . also Figure 26. rated output (see chapter 3) is very unlikely throughout Germany, cf percent of their rated power -in management”) individual plants to 70 «feed Limiting ( leads to an estimated loss of revenue of between 2 and 5 percent. A statutory regul a- rce in 2012. tion that actually enforces this limit for small plants came into fo 33 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 (86)

34 11.2.3 Solar and wind energy complement each other -minute values Average power for the supply of solar and wind power in 2017, 15 26: Figure [ISE4]. Climate in -related high solar radiation and high wind forces are negatively correlated Germany . With an installed capacity of 43 GW PV and 51 GW of wind power at the end ). of 2017, the total power supply rarely reached more than 45 GW of power ( Figure 26: A balanced mix of solar and wind power generation capacities is clearly superior to the one -sided expansion that a competitive support model would produce. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 34 )

35 Figure [ISE4]. - 2014 pr oduction of PV and wind power for 2012 Monthly 27: Controllability 11.3 role as a stabilizing variable. The With its ever greater capacity, PV increasingly fulfills the amended EEG dated January 1, 2012 stipulates that feed -in management in the form of percent of real power remote control via the grid operator or an automatic cut off at 70 -voltage grid. In accordance is also performed to regulate plants connected to the low ry -N-4105, which has been in force since Janua with the Low Voltage Directive VDE AR 1, 2012, inverters must perform functions that support the grid. «...the predominantly decentralized way in which PV is fed into the distribution grid in close proximity to consumers reduces grid operating costs and in particular those rela t- ing to the transmission grid. A further advantage of feeding in PV is that in addition to (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 35 )

36 o- feeding in real power, PV plants are in principle able to offer extra grid services (e.g. l cal voltage regulation) at cost -effective prices. They are particularly suitable for integr a- tion in subordinate grid management systems and may contribute towards improving grid stability and quality.” [ISET2] 11.4 Conflicts with slow- response fossil and nuclear power plants The PV power generation profile fits so well to the power grid’s load profile that at all times Germany’s entire electric ity demand, which range s between 40–80 GW, shall e x- ceed the PV electricity available, even if PV capacity continues to expand in the coming are increasing. Due to up start- plant However, conflicts with slow years. the present s, these types of power plants technical and eco nomic constraint react to fluctuating re- Older power plants, especially lignite, can not to a very limited extent. sidual loads only lly. Nuclear power plants are technically able to run provide balance energy economica with a power gradient of up to 2 %/min. and a power increment from 50 % to 100 % [ATW2]. For economic reasons, the power production was seldom reduced in nuclear In principle, however, volatile producers with their negligible marginal costs must plants. obtain priority. c- These unresolved conflicts can briefly lead to significant overproduction and high ele tricity exports at low to negative stock market prices, as the example in Figure 28 shows. The entire week was sunny, with strong winds on Monday and Tuesday. On public hol i- days such as May 1st and weekends, the daily load is lower than on working days. Coal and nuclear power plants delivered electricity even when the price forecast the day b e- fore had negative values. During past heat waves, the rivers used as cooling reservoirs for fossil fuel and nuclear power plants became critically warm. The PV installations in Germany were able to help e this problem in neighboring countries relax this problem and can also help to reduc e- such as France. Especially during summer, the installed PV in Germany categorically r duces the load on the fossil fuel and nuclear power plants. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 36 )

37 renewable f electricity trading price, conventional and : Example showing course o 28 Figure electricity in the 18th calendar week in May 2018 [ISE 4] 12 December 2018 181025_Recent_Facts_about_PV_in_Germany.docx ) (86 37

38 Does volatile solar power endanger security of supply? 11.5 No. The security of supply for final consumers has even increased since 2006 in parallel with the expansion of photovoltaics (Figure 29). Increased investments in the expansion of transmission grids have contributed to this development. 29 erent network levels in : System Average Interruption Duration Index (SAIDI) for diff Figure minutes / year [BNA3] Does the expansion of PV have to wait for more storage? 11.6 No. Investing in storage is first profitable when large differences in the electricity price fre- EEX or at the consumer level . quently occur , either on the electricity exchange market Currently investments in storage, specifically pumped storage, are even being deferred -effective cost because operation is not possible. PV and wind will A continued expansion of first cause prices on the electricity exchange . On the other hand , a reduced amount of EEX to sink more often and more drastically electricity icity from caused by the planned phase out and more expensive electr nuclear coal -fired plants due to the imposed CO s- allowanc es or taxes will result in price increa 2 . This price spread creates the basis for a profitable storage operation. If es on the EEX the price difference is passed on to the final customer through a tariff structure, then storage also becomes an interesting a lternative for them. n- A study by AGORA Energiewende identifies 12 measures to modernize the grids to i ]. clude among others, approximately 100 GW of installed PV power by 2030 [AGORA (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 38 )

39 12 PV modules consume a lot of energy? Does the manufacture of A solar plant’s energy payback time depends on the technology use d and the plant’s 2 an annual global horizontal irradiance of 1055 kWh/m location. For , which is the mean value for G ny, this takes approximately two years [EPIA]. The lifetime of solar mo d- erma ules is between 20 and 30 years, meaning that a solar plant constructe d today would generate at least ten times a s much energy during its lifetime as is used to manufacture it. What’s more, ever more efficient manufacturing processes mean that this value shall improve in the future. Wind power plants in Germany demonstrate even shorter energy pay back times ranging from 2-7 months. 13 Do PV Power Plants Require Excessive Amounts of Area? 13.1 Will Germany be completely covered with PV modules? No. . A GW d in Germany is presently ca. ules installe all PV mod The nominal power of 43 s- suming an average efficiency of 14 percent for all installations, this translates to a mod- ule area of approximately 300 km². Some of these modules are installed in open fields, and some are inst alled on rooftops. Projections show that to achieve its target of a carbon neutral and sustainable energy supply system, Germany requires 200 GW of installed PV in total. This is five times the installed power existing in 2016. If one assumes a mean module efficiency of 19 pe r- cent, then the required PV module installations to meet this goal add up to about 1000 km². This module area is equivalent to about 2 percent of the total area of settlements and roads or 8 percent of the net land area used for resid ential purposes in Germany. For modules installed on flat roofs and open spaces, the utilized area is actually about 2 to 2.5 times higher than the pure module area, due to the necessary spacing interval required between tilted modules mounted on horizonta l planes. A study commissioned by the Federal Ministry of Transport and Digital Infrastructure estimates that there is a potential for expansion of open spaces without restriction on 2 more than 3000 km of land, corresponding to 143 GW of PV. In addition there is an expansion potential on roof areas of 150 GW photovoltaic, without consideration of solar thermal use [BMVI]. " new PV capa 13.2 Does city compete with food production for land? No. The large- scale construction of PV systems on arable land has not been suppor ted by the stallation of such systems ground the in to a halt and EEG since July 2010. As a result, new ground- mounted systems are only being constructed on specific redeveloped or in the close vicinity of highways and railway lines. -quality sites , low brownfield sites (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 39 )

40 Furthermore, expansion scenar installa- ios do not envisage a significant amount of PV tions being built on arable land. There are various methods under investigation in the area of Agro -PV that propose d land use for both agricultural purposes and PV combine [Beck]. Reduced irradiance has not been found to stunt the growth of many crops; some crops even benefit from it. 14 Are PV plants in Germany efficient? The nominal efficiency (see section 22.2) of commercial wafer- based PV modules (i.e. modules with silicon solar cells ) in new production has risen in recent years by an annual arly rate of around 0.3 and a peak percent 17 percentage points to an average of ne meter performance of over 20 percent . Each square- of module has a rated power of over 200 W. nearly 17 0 W, with premium modules reaching operation, PV plants do not actually operate at Since additional losses occur during inal module efficiency. These effects are combined in the performance ratio (PR). A nom percent throughout the designed PV plant i nstalled today achieves a PR of 80– 90 well- operating temper ses incurred as a result of higher a- year. This takes into account all los ture, varying irradiance conditions, dirt on the solar modules, line resistance and conve r- sion losses in the inverter. Inverters convert the direct current (DC) generated by the feed modules to alternating current (AC) for grid -in. The efficiency of new PV inverters percent. currently stands close to 98 , specific yields of around 900- Depending on irradiance and performance ratio (PR) up to 950 kWh/kWp are typically generat ed in Germany and in the sunnier regions 1000 kWh/kWp. This co rrespond s to around 150 kWh per square- meter module and for premium modules around 180 kWh. An average 4 -person household consumes around 2 4400 kWh electricity per year, corresponding to the annual yield generated by 30 m of - that a south . Calcula tions show new modules with today’s averag e market efficiency o- facing, tilted roof of a detached family home expansive enough to accomm is typically the equivalent of the date about 20 PV modules. This would be sufficient to supply ly’s annual electricity needs. To increase yield, PV m odules are optimally tilted on fami flat roofs and open land i- to achieve the highest yield. Tilted s outh- facing modules , pos to prevent shading, require an area ap- tioned at suitable distance from one another ximately 2 to 2.5 times their own surface area. pro In comparison, when converting energy crops into electricity, the efficiency value calc u- lated on the basis of irradiance is significantly less than one percent. This amount falls further when organic fossil fuels such as coal, oil or natural gas are converted into ele c- combustion- based on the chemical energy based power plants is tricity. The efficiency of - which already exists in fossil fuels. Based on this method of calculation, Germany’s coal fired power plants report an average ef percent, for example. ficiency value of 38 Burning biofuels in vehicles also only results in mediocre levels of efficiency when these 30: Figure are determined on the basis of the irradiated energy and surface area used. compares the total drivin g distances of vehicles that burn various biofuels with that of (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 40 )

41 an electric vehicle (plug -in hybrid drive), whose required drive energy is provided by a PV an . array covering needed for the fuel area equivalent to the energy crop acreage 2 2 of energy crops (2,3) or 40 m of m 30 Figure 100 : Vehicle range for an annual yield of 1 a = 2 Photon, April 2007 ources: on flat, open ground, S elevated PV modules constructed on 100 m (1) and Fachagentur Nachwachsende Rohstoffe (2), (3). While southern Spain and North Africa are able to produce specific yields of up to losses and transmission to Germany would result in energy power 1600 kWh/kWp, the . Depending on the voltage level, transmission losses are between 0.5 additional charges percent per 100 kilometers. Not taking conversion losses into account, high- and 5 voltage direct current (HVDC) transmission lines reduce transportation losses to just u n- kilometers. Based on this, an HVDC transmission line of 5000 der 0. 3 percent per 100 kilometers in length would present transmission losses of around 14 percent. 14.1 Do PV plants degrade? Yes, albeit very slowly. -based PV modules age so slowly that detecting any Wafer l- output losses poses a cha lenge to scientists. A study examining 14 pl ants in Germany fitted with multicrystalline and monocrystalline percent relative drop in efficiency per modules showed an average degradation of a 0.1 year across the entire plant, including the modules [ISE2]. In this context, the common assumption that plants experience annual output losses of 0.5 percent seems conserv a- 20 to 25 years and in for a period of tive. Typically the manufacturer s guarantee holds some cases even 30 years, ensuring a maximal linear power loss of 20 % e- within this p riod . The above figures do not take into account any losses arising as a result of manufactur- ing faults. Comprehensive tests conducted by Fraunhofer ISE have shown that light - induced degradation of between one and two percent occurs during the first few days (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 41 )

42 of operation depending on the material used in the solar cells. The indicated rated pow- er of modules normally refers to output following this initial degradation. term data has not been collected for many types of thin Long- -film modules. Depending on the type, degradation during the first few months of operation and seasonal fluctua- tions can be observed. Can PV modules become soiled? 14.2 Yes, but any dirt that accumulates on the vast majority of plants in Germany is generally washed away the next time that it rains, so that virtually no yield losses occur . Problems d in the vicinity only arise in modules installed at extremely shallow angles or those locate of deciduous trees or sources of dust. 14.3 Do PV plants often operate at full capacity? No. The performance indicator « r- full -load hours” is the quotient of the actual energy gene ated by a power plant in the space of a year and its rated pow 22.3 er (see section ). Due to the fluctuating and cyclical solar irradiation patterns, PV plants actually operate for hours per year , and even when they are operating, the than half of the 8760 total less system generally operates at partial load. Based on a trend scenario , the transmission system operators (TSOs) assume an average of 98 0 full load hours per annum for PV ]. Figure systems in Germany and 892 hours per annum for roof -mounted systems [ÜNB s- 31 gives the forecasted full load hours per annum for different renewable energy sy . tems in Germany : Forecasted hours of full Figure 31 -load operation for renewable energy plants, mean values from 2012 -2016 [ÜNB] for Germany between 1981 and 2010 wa average total horizontal i rradiance s 1055 The 2 2 kWh/m kWh/m per year and fluctuates between approximately 950 and 1260 per year (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 42 )

43 across Germa- Figure 32 shows the irradiance distribution according to location [DWD]. ny. In order to maximize yields, PV modules are oriented facing south and are installed with a tilt angle 30–40° to the horizontal . Tilting the PV modules increases the total in- r- l su on the modules irradiance by around 15 percent compared to the horizonta cident 2 face . This increases the average incident irradiation to roughly 1200 kWh/m per year throughout Germany. A performance ratio PR (see section 22.6) of 85 percent and an ideal orientation would result in a geographical average across Germany of more than 1030 full -load hours. -mounted systems are not ideally oriented and many still have a PR of Since some roof somewhat lower. percent, the actual average number of full less than 85 -load hours is Technical improvements in the module and installation can increase the incident irradi a- tion, the performance ratio PR, the yield and thus the number of full -load hours of a PV The improvements entail: system. • Tracking ( see s ection 17.2 ) Bifacial PV technology • • Reducing losses caused by shading • Reducing the temperature coefficient of the solar cells Reducing the operating temperature of the module by backside ventilation • • Increasing the module properties for weak light and askance light conditions • Reducing module losses caused by snow cover and soiling Early detection and repair of reduced output • ase degradation over the module lifetime • Decre -load In wind power plants, the greater the hub height, the greater the number of full hours. When required, nuclear, coal and gas -fired power plants are capable of working , accord ing almost continuously (one year = 8760 hours) at their rated power. In reality to [BDEW1], lignite power plants reached 6640 full -load hours in 2007, while hard -fired hours -fired power plants achieved 3550 coal . (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 43 )

44 2010 32: Horizontal annual global irradi Figure ation in Germany averaged over 1981- ) 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 44 (86

45 Does PV make relevant contributions to climate protection? 15 15.1 Do anthropogenic CO emissions danger the climate? 2 Yes. Most experts see a substantial risk. It has been proven without a doubt t . Compared [IPCC] is increasing global warming hat to the preindustrial era, the mean global temperature has risen by 0.8 °C [IEA]. The m a- that jority of the scientific community assumes CO that anthropogenic and other 2 greenhouse gas emissions are most likely the main cause for the rising concentration of mean global te m- use gases in the atmos greenho phere as well as for the increase in the perature. In May 2013, the atmospheric CO for the concentration reached 400 ppm 2 years. first time in 800, 000 34 the development through today show Figure of the atmospheric CO Figure 33 and 2 or rather Antarctic, temperature. concentration and the global, : Development of the atmospheric CO 33 Figure concentration and the mean global temperature 2 ed on the NASA Global Land change bas -Ocean Temperature Index [IEA2]. increas e in global temperature dangers the stability of the global climate A more rapid - system to an extent that is not fully understood today. The temperature increase has far food secur ity , coastal settlements, diversity of species and global reaching effects on the itats. hab numerous (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 45 )

46 : Estimate of the atmospheric CO 34 Figure concentration and the temperature in Antarctica 2 concentration for 201 6 has been added based on ice core data [EPA], CO 2 emissions? Does PV make a significant contribution to reducing the CO 15.2 2 Yes. from natural gas and hard coal power Presently PV is replacing electricity generated plants on the ma rket. Based on data from 2013 giving the proportional amount of each kWh of tors, power generated from each energy source and the primary energy fac electricity saved about 2.2 kWh of primary energy. In 2013, total primary PV-generated energy savings amounted to 65 TWh. The actual influence of PV electricity on the power plant opera is difficult to determine. tions in general (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 46 )

47 35: Figure Primary energy required to generate power from various energy sources [EEBW]. Extrapolated for the year 2016, 527 grams of CO oduced as direct emissions are pr 2 rman electricity [UBA2 ] in the production of one kWh of electricity on average ("Ge mix"), while the production of solar power does not cause any direct CO emissions. 2 This figure does not take into account any further, direct climate -damaging emissions and decreases with the expansion of RES. A coal -fired power plant emi ts approx. 949 g CO2 / kWh electric, a lignite power plant approx. 1153 g CO2 / kWh electric. PV power plant parks with New large 5 €-cts/kWh have an electricity generation cost of abatement costs of 10 -12 euro -cts per kg CO s -equivalent. Germany’s energy policy ha 2 only three percent of the global electricity con- scale. Although ce on a global influen , Germany in 2008 (with consumption showing a downward trend) sumption was due to ng incentive programs German policy makers are leading the way in terms of developi for RE . The EEG is n- the best example of this. The EEG and its effect have been and co to be closely observed around the world. It h as been used by many countries tinue Meanwhile, China is leading in (presently about 30) as a model for similar regulations. expanding its PV capacity and has surpassed Germany in annual install ed power many times over. The International Energy Agency (IEA) commends the EEG in their report « Deutschland 2013” as a very effective instrument for expansion, whi ch has drastically reduced the costs for renewable energy production in the last years [IEA3]. Meanwhile, Germany’s break with nucle ar energy has also caught people dditional ’s attention worldwide. An a have decided to phase out nuclear energy (Belgium, Swi t- European countries also five zerland, Spain) while other countries have already completed the phase -out (Italy, Lith u- ania). In terms of avoiding CO emissions , the EEG achieved the highest impact due to a side 2 effect: T he creation of the largest and most secure sales market for PV , which lasted many year expansion, technology development and global accelerated edly decid s and (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 47 )

48 the use of fossil fuels for electricity (Figure 36) . Worldwide PV is reduc ing price reduction production. Figure 36: Development of annually installed PV cap acity for Germany and globally, or Rest of (last year World, (RoW), al growth rate. estimated) CAGR stands for the compound annu PV power affordable faster, also extending out to people in The German EEG has made developing countries. In this context, the EEG is « possibly the most successful develop- ment program of all time w hen it comes to energy supply,” says Bodo Hombach in the «Handelsblatt ” newspaper on January 11, 2013, and also helps developing countries to save significant amounts of CO . 2 nvironmentally harmful gases other e In addition to CO 15.3 are there released 2 during the production of PV? Yes, in the case of some thin film technologies. ) is still ride (NF film PV and flat screens, nitrogen trifluo During the production of thin- 3 used, in part, to clean the coating systems. Residues of this gas can thereby escape into the atmosphere. NF is more than 17,000 t imes as harmful to the environment as carbon 3 emissions As of 2013, however, are not known. dioxide. Current emission quantities NF3 are to be determined in 37 countries according to the revised Kyoto Protocol. 15.4 Do dark PV modules warm up the Earth through their absorption? Solar radiation plays an important role in the Earth’s energy balance. Light -colored sur- faces reflect a larger amount of incident solar radiation into the atmosphere, while dark surfaces absorb more sunlight causing the Earth to heat up. PV module installation alters the degree of reflection (albedo) of the ground on which he total with 17 thermal output of a PV module the system is mounted. For example, t emits as much heat (locally) as an area with an albedo of ca. r- percent efficiency 20 pe (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 48 )

49 bedo of 15 per cent, grass 20 per cent, and the de- cent. (To compare, asphalt has an al sert ca. 30 percent. ) In consideration of the relatively low amount of area required by PV modules (Section 13.1 ), the albedo effect is marginal. Furthermore, PV electricity use replaces the power from fossil fuel plants, re duces carbon emissions and thus slows down the greenhouse effect. 16 Are PV systems capable of replacing fossil fuel and nuclear power plants? not in the near future. No, PV and wind power may currently be capable of reducing the use of fossil fuels, impor t- ed energy consumption and CO emissions but until considerable storage capacities for 2 ity or hydroelectric storage facilities are available in the grid , they are not capable electric of replacing capacities. Calm, dull winter days , when power consumption is at a max i- mum and no solar or wind power is available , present the most critical test. Despite this, PV and wind power are increasingly colliding with conventional power power plants lignite , old -down processes (nuclear plants with slow start- up and shut ). These power plants, which are almost only capable of covering the base load, must be replaced by flexible power plants as quick as possible. The preferred power plant choice is multifunctional electrically powered CHP plants fitted with thermal storage systems 17.3.2). (Section 17 Are we capable of covering a significant proportion of our ene r- gy demand with PV power? -related structures to Yes, to the extent that we adapt our energy system and the energy the requirements of the energy transition. 17.1 demand and supply Energy The traditional energy industry promotes fossil and nuclear energy sources (primary e n- ergy), converts them and prepares them for end users 37) . (Figure The conversion and consumption are subject to dramatic efficiency deficits. For example, the end energy consumed in traffic is predominantly converted into waste heat via i n- ternal combustion engines; only a small part is transferred as mechanical energy to the -dependent approx. 10- drive train (load d- 35%). Of the drive energy generated, a consi n- erable part of the braking is still irreversibly burned, especially in city traffic, because i ternal combustion engines do not recuperate. Thus, motorized road traffic burns fossil fuels with a very low efficiency, based on the transport performance. Households, which use about 75% of the final energy consumed for heating, could halve this consumption through simple heat protection measures. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 49 )

50 38: Germany’s ), combined with Figure dependent on energy imports ( Germany is highly s- the risk of political interference by producing and transit countries and the risk of di in raw materials logistics, for example due to low water levels in the rivers. turbances 37: Energy flow diagram for Germany 2017 in petajoules Figure [AGEB2]. 50 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 ) (86

51 energy sources (www.umweltbundesamt.de) 38: Germany’s import quotas for primary Figure After deduction of import proceeds, The costs of energy imports are shown in Figure 39. the costs are on the order of 50- 100 billion euros annually. Much of the money goes to autocratic regimes. ] Figure 39: Cost development for the provision of primary energy in Germany [ÖKO3 percent) is used to generate mechanical energy (force) The majority of final energy (39 Figure 40) . For space heating and hot water, about for vehicles and stationary engines ( y is used annually [BMWi1]. 800 GWh of final energ (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 51 )

52 [BMWi4 40: Figure Share of final energy in Germany, categorized by utilization 2014 ]. provides an example of how energy demand is distributed throughout the 41 Figure course of the year. The energy consumption in road transportation is characterized by base load. The total electricity c drop onsumption and the energy needed for hot water only slightly in summer. The heating demand correlates negatively with global irrad i- ance, with the highest point of intersection being found in spring. The monthly distribution of solar and wind power ge neration is also shown. While around 69 percent of the PV power generated throughout the year is produced in u- spring and summer (April –September), 62 percent of wind power is generated in a tumn and winter. Figure clearly shows that even without seasonal storage systems, solar power has the 41 potential to cover significant amounts of the electricity, road transport and hot water requirements, provided that complementa ry energy sources hold the fort in autumn and winter. The potential for covering heating requirements is much lower, however, with spring being the only time of year where this is likely. Furthermore, a combination of o be generated using renewable sources solar and wind power may allow power t throughout the year because the amount of wind energy produced falls significantly in spring and summer. In addition to the regular seasonal fluctuations in PV power generation, irradiance changes significantly over the course of hours, days and weeks. On a local level, signif i- cant changes are seen as much as every minute or even second but these fluctuations do not have a bearing on Germany’s power grid as a whole. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 52 )

53 percent) of solar 41: Rough estimate of the monthly distribution (annual total = 100 Figure power calculated for Freiburg [PVGIS], wind power [DEWI], heating requirements based on the heating degree days (VDI Guideline 2067 and DIN 4713), energy requirements for domestic h ot water production, electricity demand [AGEB1] and fuel requirements [MWV]. On the other hand, the energy load also fluctuates during the course of the day. More energy is required during the day than at night, and more on working days than over weekend or on holidays. When considering load profiles, utilities distinguish be- the tween e- base, intermediate or peak load demands (see section 22.7). Base load corr sponds to a power demand of 30– -hour GW that remains virtually constant over a 24 40 period. Intermediate load fluctuates slowly and mostly in a periodic manner, while peak load comprises sudden, highly changeable above the basic and intermediate load. nny days, PV power is already capable of covering most of the peak load seen On su . The further expansion of PV capacity leads to the midday (Figure around midday 28) peak load being covered even on less sunny days, while the midday electricity produc- tion on sunny days will cover even part of the base load requirements, especially on the weekend. When solar power is available, the energy demand is generally high. At high de mand, the electricity price on the energy exchange used to be at its most expensive. Continuing to install new PV capacity over the coming years , there will never be a surplus of PV electricity. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 53 )

54 Energy scenarios 17.2 Our current energy system, which is based on generating power from fossil fuel and nuclear sources, cannot survive in the long term. A variety of energy scenarios have been created for the coming decades, and they are increasingly incorporating the use of Germany, alongside the speed with which its RE. The rapid expansion of PV witnessed in costs have fallen, have already exceeded many of these studies’ expectations. A study commissioned by the Federal Environment Agency has concluded that it is tec h- ly friendly and in an environmental nically possible to generate all power renewably ]. While this study works on the assumption of a total installed PV manner by 2050 [UBA capacity of 120 GW in 2050, conservative estimates suggest that this milestone shall be reached first with an installed capacity of 2 75 GW. Researchers at the Fraunhofer Institute for Solar Energy Systems ISE have investigated an energy system for Germany in a simulation based on hourly time series ( 45). It is Figure entirely based on renewable energies and includes the heating sector with its potential for storage and energetic building renovation. In an economically optimized generation GW [ISE5]. mix PV contributes with an installed capacity of approx. 200 Figure o- Scenario of a German energy system, schematic representation of the system comp 42: sition. [ISE5] (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 54 )

55 43 shows a schematic residual load curve for Germany with a 100% renewable Figure power s upply, based on 200 GW generator power PV and wind. Shown are the de- scending ordered hourly values of the residual load for one year. Residual load corr e- sponds to the difference between the irreducible electricity load (from which all flexibi l- ity potential s are skimmed off) and the sum of electricity production from volatile re- ). Volatile power production can be limited newable sources (PV, wind, run- of-river at any time technically, but at the price of an economic loss of power of the corresponding amount of electricity. Figure 43 : Schematic representation of a residual load curve for Germany with power supply of 100% EE, with generators (+) and loads ( -); Red: Converters that produce usable heat or waste heat of charge generators such as the -regulated Load shifts and current dis stationary battery s (with synthetic fuel and pumped storage, the operation of fuel cells , CHP generator r- ma and bio- methane / bio -mass) and simple gas turbines are activated in order of their s to meet the electricity demand. For a few hours a year, the residual load ginal cost 43: Schematic representation of a residual load reaches its maximum (left side of Figure curve for Germany with power supply of 100% EE, with generators (+) and loads ( -); Red: Converters that produce usable heat or waste heat ), for example, in case of lack of wind over large areas, in connection with darkness or closed snow cover. In these per i- ods, all controllable generators are at maximum reduced load on the grid, even the less a- relatively fast as gener efficient, simple gas turbines. Batteries and pumped storage fail due to their very limited capacity. Vehicle batteries can only be charged to a limited tors load (load management) or operated as a battery in the grid because they primarily have cover the mobility requirement. to CHP generators burn hydrogen or methane from renewable energy or biomass and pr o- besides electricity duce storable heat . As an alternative to combustion, heat can also be (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 55 )

56 generated electrically via heating elements on the high -temperature side of the CHP temperature heat accumulators [VATT]. generators and temporarily stored in high- ted -regula On the surplus side, the current consumers, such as flexible loads, charging of stationary batteries and pumped storage tanks, the operation of electrolyzers, heat pumps and heating elements, are activated in order of economic efficiency with de- sing electricity prices in order to absorb the current that is not required. As a last crea , when insufficient power is consumed. This is restricted the electricity production resort can occur, for example, on stormy nights or on sunny and very windy weekend days er production meet. For these few operating when low demand and very high pow hours, no further expansion of the acceptance performance is worthwhile. For batteries heat and pumped storage the aforementioned capacity restrictions apply. To operate -regulated pumps and heating rods current , they require large thermal storage. Electro- lytically generated hydrogen can be stored in the gas network and used in the transport sector, it can be methanized and processed into synthetic fuels. The chemical industry requires hydrogen and hydrocarbons for the recovery of materials . The waste heat from the operation of electrolysers and fuel cells can contribute to co v- er ing the heat demand, just as in the case of classic CHP. Generators (eg simple gas tu r- n- bines) and consumers (eg heating rods) with particularly low performanc e- related i W) are required for the two -sided extensions of the residual load vestment costs (€/ curve. They are rarely operated and therefore do not have to be highly efficient. A quick glance at global energy scenarios: Royal Dutch Shell's study "New Lens Scenar i- os" [Shell] sees PV growing into the most important source of primary energy by 2060 (Figure 44: Primary energy consumption by sources [Shell] ). Between 2018 and 2023, a doubling of the worldwide installed PV the International Energy Agency (IEA) forecasts capacity to about 1 TW [IEA1]. Figure tion by sources [Shell] 44: Primary energy consump (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 56 )

57 Compensatory measures 17.3 PV power into our Despite there being no hard and fas t rules for integrating intermittent energy system on a large scale and in an economically as well as technologically feasible r- manner, a plethora of complementary measures exist that are suitable for this very pu pose. The following sections examine the most important aspec ts of this in detail. Keeping PV power production constant 17.3.1 How can the amount of PV power available in the grid be kept at a constant level? One - and ground- mounted of the simplest approaches is to increase the installation of roof PV modules with east/west orientation. Although in comparison to south orientation this results in lower annual yields per module, the availability of PV feed -in across Germany , meaning that complementary power plants do not need to be used until the increases mpare late afternoon (co Figure 45). Even more effective in achieving this aim are single -axis tracking systems, which in addition to making power production more and dual constant throughout the day, can increase the annual yield by between around 15- tracking systems, these PV systems can reduce yield losses 35 percent. Compared to non- i- that occur due to higher operating temperatures or snow cover. Another option is vert cally mounted, bifacial modules with north- south gradient. : Yield development throughout the course of a day of PV plants installed in a variety 45 Figure of different ways, calculated using the software PVsol on a predominantly clear July day in Freiburg. Increased on c- ssociated savings due to less purchased electri -site consumption and the a ity mean that the somewhat higher costs of electricity production due to more elaborate systems pays off already, especially for commercial consumers. Also the measures given (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 57 )

58 to increase the number of full -load hours contribute to the stability of in section 14.3 the PV electricity supply. 17.3.2 Complementary operation of existing power plants It is technically possible to operate, design or retrofit many fossil fuel power plants in a way in- oad operation, 46). Partial l Figure they are able to follow the residual load ( that - creased wear and any associated retrofitting increases the power production costs. Gas fired power plants, in particular, are highly suitable to cover fluctuating loads. In combi- s power plants have a nation with combined heat and power systems (CHP), natural ga very high efficiency of 95 . Gas power plants based on gas motors have only a [UBA3] % fraction of the investment costs (€/kW) of combined cycle (gas and steam) power plants (CCPP). e electricity demand and the mid However, since PV is already noticeably reducing th -day exchange, and the favorable CO price peak on the energy balance of gas power plants 2 hardly comes to bear because of low emission costs, gas -fired plants are currently not a (about 95% in 2017 Most of the natural ga s must be imported worthwhile investment. . [AGEB6]), in particular, Russia and Norway deliver to Germany 46: Power plant availability [VGB]. Figure The existing run- of-river power plants (for pumped storage, see section 17.3.9) can only make small contributions to the complementary operation, taking into account the i n- While they contributed around terests of shipping and environmental protection. 5.5 GW of rated power and roughly 20 GWh of production in 2017 ], there is little [ISE4 scope for these levels to be improved on in the future. 17.3.3 Decreasing energy consumption Measures for improving the energy efficiency in households and in the industry are among the most cost -effective for reducing the residual load. The Stiftung Warentest found, for example, that a house, which is equipped solely with older appliances, uses (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 58 )

59 devices [TEST]. Es- twice as much electricity as a comparable house with energy saving c- pecially effective are measures that reduce the nighttime electricity consumption. Parti ularly effective are measures that reduce the nocturnal power consumption, if solar power can only be made available through comparatively complex st orage. Load management 17.3.4 Figure Electricity consumption by households ( l- 47), commerce and industry offers flexibi ity options with regard to supply -side management. Several studies have identified load management potential in the range of 20 GW and more for households and 14 GW for n- commercial consumers [AEE1]. However, the technical prerequisites and economic i centives for the development of these potentials still have to be created. The basic requirements are variable electricity tar iffs and electricity meters, which enable time -dependent billing. The self -consumption of solar power from newer PV systems has b- an analogous effect, because it significantly reduces the price of electricity, when o tained directly from your own roof. , whose operation can also start delayed, must technically be able to react to ces Devi price signals. This often includes washing machine, tumble dryer or dishwasher in the household. Cooling and air conditioning units can be added if they have a significant thermal storage. For cold stores, food markets or air conditioning systems that already have a certain thermal storage capacity in the system, the storage expansion can be done relatively cheap. 47: Figure Energy consumption of an average household in Germany, not including hot water production [RWE]. - There are also potentials for the adaptation of consumption profiles in the power intensive industry. However, they are activated only when very cheap daily electricity is available more frequently, ie when the installed PV output continues to increase. Often, (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 59 )

60 -intensive process steps, with investments are required to increase the capacity of energy decreasing capacity utilization, and to increase storage capac ities for energy -intensive 17.3.8). products. Electromobility will contribute a growing share to load management ( Flexibility potentials due to electrical heat generation are addressed in Section 17.3.7 . 17.3.5 Balanced expansion of PV and wind power capacities In Germany, weather patterns show a negative correlation between the PV and onshore wind power generated on both the hourly and monthly scales ( Figure 27). Figure and 26 In terms of hourly fluctuations, the total amount of electricity generated from PV and onshore wind rarely exceeds 50 percent of the total rated power, while in terms of monthly changes, the total electricity generated by both sources is distributed more evenly than the individual amounts generated by each source. i- If the installed PV and wind performance continues to be on a similar scale, this comb nation will reduce storage requirements. Grid expansion 17.3.6 17.3.6.1 National grid expansion Studies conducted by the Fraunhofer Institute for Wind Energy and Energy System Technology (IWES) and ECOFYS on behalf of BSW have shown that inc reasing the i n- GW by 2020 shall incur costs of approximately 1.1 billion euros stalled PV capacity to 70 in terms of grid expansion alone [IWES], [ECOFYS]. The equivalent annual costs of this percent of the routine yearly expenditure for grid grid expansion make up roughly ten strengthening. The studies took into account expanding the low -voltage grid using PV plants that provide ancillary services (e.g. voltage scheduling through reactive power ormers with regulating compensation) and partially equipping local distribution transf devices. 17.3.6.2 Strengthening the European grid The German electricity grid is part of the larger European grid. All neighboring countries have some controllable power plants in their fleet and also experience high levels of demand during peak hours, e.g. midday. Strengthening cross -border interconnection i- capacity (presently ca. 20 GW) and thus European electricity trade will contribute signif cantly to smoothing out the fluctuations in PV production. ity of around 2 GW, while Austria boasts roughly 4 Switzerland has a hydroelectric capac GW and France approximately 25 GW of hydroelectric power. « As of June 27, 2012, a total of 9,229 MW of pumped storage capacity was connected to the German power grid (net rated power in generator mode). This comprised 6,352 MW in Germany, 1,781 MW in Austria and 1,096 MW in Luxembourg. The capacity of Germany’s pumped- storage power plants currently amounts to 37,713 MWh.” [Bundesreg] (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 60 )

61 Norway has about 30 GW hydroelectricity [Prognos] with potential for expa nsion. By 2018, an underwater cable with a length of 600 km and a transmission power of 1.4 GW will be installed to create a direct connection to the German electricity grid. The installed capacity of the hydroelectric power in Switzerland and Austria are 12 GW and 9 GW respectively. Figure 48: Total power of hydroelectric stations in selected countries, status in 2010 [Prognos]. The capacity given for each of type of power plant differs according to the data source heat and power solution Combined 17.3.7 -temperature heat for space heating and hot water, as well as industrial process Low heat, are still largely provided by the combustion of fossil resources and in conjunction with small heat storage capacities. In a renewable energy system, the provision of heat is closely linked to the transformation of electrical energy. Useful heat is obtained from the waste heat of CHP plants, fuel cells and electrolyzers, in times of surplus electricity via 17.3.9.1). Large heat storage capacities enable the heat pump and heating element ( current- controlled operation of the transformers. fac- The efficiency of a heat pump (electricity to heat) is given as an annual performance and is 300%, depending on technology and load. Heating rods convert electricity tor -temperature heat with low exer into heat at 100% efficiency, but in the case of low get- ic efficiency. Heating rods are worthwhile at very low electricity prices or infrequent use. Once converted into heat, the previously electrical energy can be stored efficiently and 17.3.9.1). inexpensively (Section In Germany, at the end of 2014, about 33 GW of electrical CHP power was connected to the grid [ÖKO2], which mainly uses gas, biomass and coal. CHP plants achieve overall efficiencies of up to 90%, and gas CHPs as much as 95% [ ÖKO2]. Even micro -CHPs for i- -family home can achieve electrical efficiencies of up to 25% and overall eff a single LICHTBLICK r- ciencies of up to 90% [ ]. They use combustion or Stirling engines to gene gy transition progresses, CHP plants are being con- ate mechanical power. As the ener verted from fossil fuels to synthetic fuels, with some still burning biomethane / biomass. At the end of 2017 biomass power plants with 7.4 GW output were installed across Germany [ISE4]. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 61 )

62 Electrom obility 17.3.8 Motorized road transport burns fossil fuels at an extremely low efficiency with respect to the transport performance. M ost of the energy consumed disappears as waste heat in the motor and in the brake system. Electric vehicles use highly efficien t motors ( efficie n- cy > 90 %) and the mechanical energy generated can be used to a large extent (rec u- peration brake) . Electric vehicles need batteries as electrochemical energy storage, po s- sibly supported by internal combustion engines with fuel tank (plug- in hybrid) or fuel cell vehicles). with hydrogen tank (hydrogen powered E- vehicles can contribute to load management if their battery is charged with power according to availability . In o rder to charge PV power, they must find charging stations at the parking spaces used during the day, eg at the workplace, in parking garages or other public car parks. As soon as price signals become available, for example logistics companies with electric vehicles can take account of cheap charging times in their route planning. Plug -in hybrids have an electric driving range of ca. 80 km. Many car manufacturers o f- fer pure electric vehicles with standard ranges (NEDC) up to 380 km with 40 kWh of d up to 520 km with 60 kWh of storage. By 2020, one million electric cars storage an should have been registered in Germany according to earlier plans of the Federal Gov- h per vehicle With a charging capacity of ca. 40 kW ernment. in fast- , charging mode 25,000 vehicles plugged into the electricity grid would already mean one gigawatt of controllable consumption. However, revolutionizing our personal means of transport has really taken off on two wheels: At the end of 2017, several million e r- -bikes sold in Ge many faced o nly 54,000 pure electric cars. 17.3.9 Energy storage 17.3.9.1 Thermal s torage Inexpensive low -temperature heat storage, especially hot water storage, enable the cu r- rent- driven, highly efficient operation of CHP systems and fuel cells on the generator side, as well as heat pumps, electrolyzers and heating rods on the customer side. Heat storage systems are scalable from single house and com- houses -family -family to multi mercial enterprises to neighborhood supply. The proportionate storage losses and the specific costs decrease with the size of the storage . -consumption of PV systems when they are loaded by Thermal storage s increase the self heat pumps or heating rods, especially in the summer months . Seasonally, the PV system can heat up t he domestic hot water, in particular when the PV modules with high incl i- facing roofs or on southern facades. nation are mounted on steep south- storage units can also thermal As soon as price signals become available, decentralized be charged from the pow heat Latent er grid and, for example, use excess wind power. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 62 )

63 storage systems offer significantly higher storage densities compared to sensitive heat storage units such as the hot water storage tank. Batteries 17.3.9.2 the self With small, stationary batteries in -house, x- -consumption of PV power can be e g- tended into the evening hours and thus massively increased (typically doubling, see Fi -site consumption in dependence of the battery capacity and PV 49: Percent of on ure -family home with an annual electricity consumption of 4,700 array power for a single 2018, the number of PV stores exceeded 100,000 in Germ ). In August a- kWh. [Quasch] ny. usable battery capacity in kWh -site consumption in dependence of the battery capacity and PV array : Percent of on Figure 49 power for a single -family home with an annual electricity consumption of 4,700 kWh. [Quasch] Systems with grid -optimized operation can reduce the grid load by decreasing the grid feed 50). Figure -in at peak times as well as the electricity purchased in the evenings ( systems thus promote the installation of PV systems . «Load flow calculations Storage -in peak of all sy showed that a grid- s- optimized PV/battery operation reduces the feed tems by about 40%. Results indicate that 66 % more PV/battery could be installed as long as these systems also operate using a grid- optimized feed -in strategy.” [ISE7] 181025_Recent_Facts_about_PV_in_Germany.docx (86 12 December 2018 63 )

64 Figure 50: Comparison of the conventional and grid -optimized system operation [ISE7] Electric vehicles that are connected to the grid must not be immediately available to and drive , can also be operated as a power / electricity storage unit with the appropriate has already technical equipment. The load management potential of electric vehicles been mentioned ( 6217.3.8). Pilot projects are currently investigating the storage of ele c- trical energy in large, stationary batteries [RWE2]. storage Pumped 17.3.9.3 The currently installed pumped storage capacity in the Ger man grid stands at almost 38 GW and the average efficiency value is GWh, while rated power is approximately 6.4 70 percent (without transmission losses). As a comparison, the aforementioned storage capacity corresponds to the yield generated by German PV power plants in the space of less than one full -load hour. If some projects are being planned or have been realized, the capacity of the pumped storage power plants can be increased to about 10 GW. The current market and price mechanisms do not allow econom ic operation of new power plants, although they are urgently needed for an efficient energy transition. The storage of electrical energy in compressed air accumulators (adesabatic compressed air energy storage, CAES) is also being investigated. 17.3.9.4 Hydrogen and derivatives The promising electrolytic conversion of excess solar and wind energy into hydrogen, with subsequent methanation and further processing into synthetic fuels, is under sca l- . The conversion of renewable energy to storable energy sources ing and testing [AMP] -to-X") opens up huge, already existing storage possibilities. More than 200 gas ("Power TWh of energy (equivalent to 720 petajoules) can be accommodated in the existing gas -ground storage facilities. ell as in underground and above network itself as w (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 64 )

65 These synthetic energy sources can be reconverted, but they can also be used as fuels in the transport sector (for example, hydrogen for fuel cell vehicles, kerosene substitutes in aviation) or as starting materials for the chemical industry. shows an overview of possible paths for the conversion and storage of PV Figure 51 power. For the practical relevance o f these paths, in addition to the technical efficiency, the costs of the rated output (€ / W) for transformation and the costs of the stored e n- ergy (€ / kWh) for storage are also to be considered. Figure : Possible ways of con 51 verting and storing PV power with indicative data on efficiency values. 17.3.10 Overview flexibilisation " Time horizon until 2025: focus on " The energy efficiency of electricity consumers is increasing in all sectors. 1. y- 2. The installed PV power is increased to 70 -80 GW, close to consumption, for stead supporting ing of production in East / West orientation or with tracking, with grid- inverter functions, for a production of approx. 60- 70 TWh/a s olar power at peak -55 GW. Wind power capacities are being expanded in sim power up to approx. 50 i- lar dimensions . Load management: Parts of household, industrial and e p- -mobility power consum 3. tion are adjusted to the availability of PV power (and wind power) through demand- (supply side management -based tariffs or signals). 65 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 (86)

66 4. Available pump storage capacity and capacity are being increased. 5. PV systems are provided with network -compatible battery storage; for heating and cooling supply, storage tanks are being expanded. on of occasional EE current spikes cheap (€/W) heating rods For the power utilizati 6. are built into thermal storage . 7. For the power utilization of frequent excess electricity surges, electric heat pumps -in into thermal storage are constructed with feed . 8. Low -cost (€/ W) gas turbines are built to cover occasional residual load peaks (eg from the recycling of aircraft turbines) /CHP power plants with feed -in 9. To cover frequent residual load gaps, efficient CCGT into thermal storage are set up Existing coal -fired power plants will, if possible, be optimized for flexible operation, 10. otherwise shut down. 11. The power grid connections to our neighboring countries will be strengthened. until 2050: focus on " Time frame storage " 1. The installed PV capacity will be gradually expanded to approx. 200 GW, for a solar powe r production of approx. 190 TWh/ a the RE, c- structural thermal prote completely converted to 2. The heat supply will be tion mized will be opti w- 3. The traffic will be completely converted to electricity or synthetic fuels from rene able sources 4. The conversion and storage of RE (in particular electricity -to-electricity) via RE gas and batteries will be massively expanded 5. Consumption of fossil fuels will be completely stopped In order to avoid costly undesirable development s and to keep pace with the above steps, incentives are needed: a stable EEG, investment incentives for energy efficiency measures, multifunctional power plants and pumped storage, price and investment i n- incentives for demand- -side electricity consumption and based elec- centives for supply tricity supply . A further measure could be the reduction of the implicit subsidy for coal - fired power plants through a shortage of CO tax. allowances or, nationally, by a CO 2 2 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 66 )

67 : Simplified scheme of a Renewable Energy System with the most important grid Figure 52 - related components of the categories production, conversion, storage and consumption. From today's perspective, an energy system based on almost 100% renewable energy is 52 shows the main elements connected to technica lly and economically feasible. Figure to consumption. In order the grid, from extraction to transformation and storage down to reduce the storage requirements, the power consumption in households and industry will be o- partially more flexible. ICT stands for information and communication technol gy. The dashed boxes indicate that currently very low performance (in the converters) o r ) are available. capacities (in the storages in the case of supply pumps and - " sector (red), cogeneration units, heat In the " heat peaks on the electricity side - heating elements load the heat storage units. Wherever the acceptance density permits, for example in quarters, the efficient storage takes place centrally in large heat storages. In the " y- g " sector (green), biomass fermenters produce methane and electrolyzers h as drogen, which can also be methanized or processed into synthetic fuels. Partly biomass is burned directly in the CHP. When electricity is needed, combined gas and steam tur- (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 67 )

68 bines, fuel cells and - when demand peaks - even gas turbines reverse the flow of ener- gy. Hydrogen electric vehicles refuel their fuel from stationary gas storage, vehicles for long distances (especially aircraft) refuel liquid synthetic fuels. In the " battery " se ctor (black), stationary, central or decentralized electrochemical sto r- age tanks are charged or discharged depending on the residual load. Mobile batteries in electric vehicles primarily serve the mobility needs, but can also support the network bidirectio nally at standstill. In most electrochemical storage systems, the converter and called redox flow batteries have external, the storage tank are structurally fused, only so- scalable storage tanks. (blue), water storage power plants are operated bidirectional- In the mechanical sector ly via pumps and turbines, similar to compressed air storage power plants via compre s- sors and turbines. 18 Do we need PV production in Germany? Yes, if we want to avoid new dependencies in energy supply. fossil fuel” As the energy transformation progresses, Germany will leave behind the « century, in which we spent 90 billion euros for oil and gas imports annually and thus financed authoritarian governments. The energy transformation offers the chance to escape from this dependency. Not only in Germany but Germany has also made d does the sun also shine sive contributions eci to nology development in the solar sector . In spite of the enormous slump in Ge r- tech many ’s solar market , the German PV sector with its material manufacturers, engineers , PV producers, R&D institutes and training facilities has held onto its leading position worldwide. A future energy system based on renewable energy sources with ca. 200 GW installed PV: For the construction and increasingly the up- a- keep of these power st 7 GW are required. This corresponds to about 20 million tions, annual installations of 6- PV modules at a cost of several billion euros. A PV production within Germany offers term security of supply at high ecological standards and quality. long- 19 Do PV modules contain toxic substances? That depends on the technology and materials used. -based modules 19.1 Wafer cent of the market share ) pr o- The silicon wafer -based modules (approximately 90 per duced by many manufacturers often contain lead in the cell metallization layer (around -cell module) and in the solder used (approximately 10 grams of 2 grams of lead per 60 y acidic ). Lead, a toxic heavy metal, is soluble in certain, strongl -cell module lead per 60 or basic environments, and lamination in the module does not permanently prevent based modules, lead can be completely substituted by mass transfer [IPV]. In wafer- (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 68 )

69 harmless materials at low additional costs. Other than lead, wafer -based modules do not usually contain any known toxic substances. 19.2 film modules Thin- film modules (approximately five percent of market Cadmium telluride (CdTe) thin- salt form. T share) contain cadmium (Cd) in he technology behind this type of module does not allow this material to be substituted. Metallic cadmium and cadmium oxide are classified as toxic; CdTe as harmful to health. Alternative thin -film modules containing little or no Cd are based on amorphous silicon or copper indium selenide (CIS). CIS solar oxidized when toxic independent a fire) after (e.g. cells contain selenium which can be of the amount. Many manufacturers declare the conformity of their CIS modules with the RoHS chemical regulation (Rest riction of certain hazardous substances) and the EU chemicals ordinance REACH (Registration, Evaluation, Authorization and Restriction of chemicals). For a differentiated evaluation, reference is made to independent investiga- tions of each module type. So lar glass 19.3 All conventional solar modules require a front cover made of glass. The glass shall have a very low absorption in the spectral range between 380 and 1100 nm, conform to solar glass quality. Many glass manufactures increase the transmission by adding antimony (Sb) to the glass melt. If this glass is disposed of in waste dumps, antimony can seep into the ground water. Studies indicate that antimony compounds have a similar effect as arsenic compounds. back schemes and recycling Take- 19.4 y- PV producers s independent recycling system in June 2010 (PV C et up a manufacturer- cle), which currently has more than 300 members. The version of the European WEEE Directive (Waste Electrical and Electronic Equipment Directive) which came into force on 2014. August 13, 2012 must be implemented in all EU states by the end of February This directive makes it compulsory for manufacturers to take back and recycle at least 85% of their PV modules free of charge. In October 2015, the electric and electronic device law came into effect. It classified PV modules as household devices and set down provisions for take -back obligations as well as financing. 20 Are there enough raw materials available for PV production? 20.1 -based modules Wafer -based modules do not require any raw materials which could become limited in Wafer i- of silicon, alum the foreseeable future. The active cells are fundamentally composed num and silver. Silicon accounts for 26 percent of the mass of the earth’s crust, meaning (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 69 )

70 that it is virtually inexhaustible. While aluminum is also readily available, the use of silver 00 metric 1,4 poses the most problems. The PV industry currently uses approximately . tonne s of silver annually, corresponding to almost five percent of production in 2015 p- In the future, the silver in solar cells could be used more efficiently and replaced by co per as much as possible. film modules Thin- 20.2 The availability of raw materials depends on the technology being used. Contradictory statements have been made concerning the availability of tellurium and indium for CdTe and CIS modules respectively. No raw material shortages have been foreseen for thin -film modules made from silicon. Do PV plants increase the risk of fire? 21 21.1 Can defective PV plants cause a fire? Yes, as is the case with all electric installations. Certain faults in the components of PV plants that conduct electricity may cause electric arc s to form. If flammable material , like roofing material or wood, lies in close vicinity to these arcs, then a fire may break out depending on how easily . In the material ignites comparison to AC installations, the DC power of solar cells may even serve as a stabi liz- ing factor for any fault currents that occur. The current can only be stopped by discon- necting the circuit or preventing irradiation reaching any of the modules, meaning that PV plants must be constructed carefully. million PV plants in Germany, the combination of all of these fa c- With more than 1.4 tors has been proven to have caused a fire to break out in just a few cases. The majority of the fires started as a result of faults in the cabling and connections. «Using qualified skilled w orkers to ensure that existing regulations are adhered to is the percent of all PV plants have caused a fire best form of fire protection. To date, 0.006 resulting in serious damage. Over the past 20 years, 350 solar systems caught fire, with the PV system being at fault in 120 of these cases. In 75 cases, the damage was severe and in 10 cases, the entire building was burned to the ground. The most important characteristic of PV systems is that they produce direct current. Since they continue to generate electricity for as long as light falls on their modules, they cannot simply be turned off at will. For example, if a low -quality or poorly installed module connector becomes loose, the current flow is not always interrupted immediat e- g in an electric arc, which, in the worst case scenario, may cause a ly, potentially resultin fire to break out. Accordingly, investigations are being carried out on how to prohibit the occurrence of electric arcs. In addition, detectors are being developed that sound an alarm as soon as only a small electric arc occurs. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 70 )

71 u- PV plants do not present a greater fire risk than other technical facilities. Sufficient reg nsure the electrical safety of PV systems and it is imperative that e lations are in place often start when systems are fitted by inexperienced that these are followed. Fires pieceworkers. Weak points are inevitable when solar module connectors are installed using combination pliers instead of tools designed especially for this purpose or when d, and system operators should not cut costs in the incompatible connectors are use wrong places. In addition to technical improvements, control regulations are vital. At present, system installers themselves are permitted to confirm that their installations were carried out in per- ce with regulations but experts now recommend that acceptance tests be complian formed by third parties. It has also been suggested that privately owned PV systems are subjected to a compulsory, regular safety test similar to that performed on commercial every four years.” [ISE6] plants 21.2 Do PV plants pose a danger to firefighters? Yes, as is also the case with many systems fitted with live cables. Standing at least a few meters away from the fire when extinguishing a fire from ou t- side of the building protects firefighters from electric shocks. This safe distance is no r- mally given for all roof -mounted installations. The greatest risk for firefighters arises when extinguishing a fire from inside the building in areas where live, scorched cables V plant come into contact with water or the firefighters themselves. connected to the P To minimize this risk, the industry is developing emergency switches that use safety r e- lays to separate the modules from their DC connection in close vicinity to the roof. In Germany, no firefighter has to date been injured by PV power while putting out a fire. An incident widely reported in the press confused solar thermal collectors with PV modules and no PV plant was fitted to the house in question whatsoever. «Comprehensive training courses for the fire brigade could eliminate any uncertainties firefighters may have. As with every electrical installation, depending on the type of electric arc it is also possible to extinguish a fire using water from a distance of one to ed on investigations to date, all of the claims stating that the fire brigade five meters. Bas could not extinguish a house fire due to the PV system have been found to be false.” [ISE6] Do PV modules prevent firefighters from extinguishing externally fires 21.3 from the roof? Yes. roof covering” created by the PV modules hinders the ability to extinguish The second « the fire, as the water simply drains away. According to the fire brigade, objects da m- aged by a fire that needs to be extinguished in this way can rarely be saved, i.e. the (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 71 )

72 damage has to a large extent already been done and is irreversible before the PV plant impedes the firefighters’ ability to put out the fire. Are toxic emissions released when PV modules burn? 21.4 The Bavarian Environment Agency (Bayerisches Landesamt für Umwelt) has calculated CdTe modules does not pose a n of fumes following a fire involving that the dispersio serious risk for the surrounding area and general public [LFU]. For CIS modules, inde- pes are referenced. pendent investigations for the different module ty For wafer- , which the m- based modules, the rear side foils can contain fluoropolymers selves are not poisonous. In a fire at high temperatures, however, they can decompose. Upon examination, the Bavarian Environment Agency came to the conclusion that dur- a more critical role in d e- play ing a fire, conflagration gases other than fluoropolymers fining the potential danger . (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 72 )

73 22 Terminology Appendix: EEG 22.1 surcharge «The EEG surcharge (EEG -Umlage in German ) is the portion of the electricity price that must be paid by the end user to support renewable energy. It results from the equaliz a- tion scheme for renewable energy sources, which is described in the Renewable Energy The EEG provides incentives for plants that generate power from renew able Act (EEG). energy and which otherwise could not be commissioned as a result of the market situa- tion. Hydroelectric power plants, landfill gas, sewage gas, mine gas, biomass, geothe r- mal energy, wind power and solar power are supported. promoting renew a- Several stages are used to determine how the costs associated with tors, who ble end users . In the first stage , plant opera electricity are allocated to the generat e power from renewable energy , are guaranteed a fixed feed -in tariff for all nt.” [Bundestag] power produced by their pla The level of this feed tariff is based on the levelized cost of electricity (LCOE) for PV -in plants installed at that time a nd is guaranteed for 20 years. «The g rid operators, who connect these renewable plants to their grids and who also er to the respons i- , transmit the pow reimburse the plant operators for the fed -in power ). In second stage ble transmission system operator (TSO), who reimburse them in turn ( the , the renewable energy is distributed proportionally between Ger ny’s ma third stage a- four operators (TSO) , compensating regional differences in renew system transmission generation ble energy . The Equalization Scheme Ordinance (Ausgleichsmechanismusverordnung, AusglMechV) dated July 17, 2009 resulted in changes being made to the fo urth step of the remu- neration and reimbursement scheme for renewable energy. Until these amendments were adopted , the renewable power generated was simply transmitted (via the TSOs) at . Now, the price of the feed -in tariff to the energy supply companies , who sel l the power required t are the EEX s onto o put the power generated from renewable however, TSOs (spot market). The energy supply companies, which ultimately transmit the power to the can end customers, obtain power from the market regardless of how mu ch renewable energy is fed into the grid. This gives them greater planning security and also allows remain first and fore- As a result, the costs of the EEG promotions them to save costs. most with the TSOs. The costs related to the EEG promotion is calculated based on the difference between the rate of return generated by the renewable power put on the market ( EEX ) and the feed -in tariffs paid to plant operators. (...)” [Bundestag] -called EEG These costs are then distributed over the total energy consumption – the so surcharge , which is apportioned to the end consumers by the electricity supply compa- «The Equalization Scheme Ordinance (AusglMechV) stipulates that the TSOs set the nies. u- on October 15 of each year for the following year. The calc surcharge level of the EEG is subject to review by the German Federal Network Agency. (...) lation of the surcharge (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 73 )

74 -intensive companies.” for energy -cts/kWh n- is limited to 0.05 € The EEG surcharge [Bu destag]. -intensive industrial enterprises which spend a high proportion of As a result, energy their costs on power are largely exempt from the EEG surcharge . Module efficiency 22.2 Unless stated otherwise, module efficiency is given in terms of nominal efficiency. Under standard test conditions (STC), it is calculated in terms of the relationship between the amount of electricity generated and the level of irradiation on the module’s total surface area. STC conditions imply a module temperature of 25 °C, vertical irradiance of 1000 2 W/m irradiance spectrum. During actual operation, conditions are and a standard solar varies. normally so different from these standard conditions that efficiency 22.3 Rated power of a PV power plant The rated power of a power plant is the ideal DC output of the module array under STC, 2 i.e. the product of the generator surface area, standard irradiance (1000 W/m ) and nominal efficiency of the modules. Specifi 22.4 c yield The specific yield [kWh/kWp] of a PV plant is the relationship between the useful yield (alternating current yield) over a certain period of time (often one year) and the installed rating conditions, (STC) module capacity. The useful yield is influenced by actual ope such as module temperature, solar radiation intensity, angle of solar incidence, spectral r- deviation from the standard spectrum, shading, snow cover, transmission losses, conve l- sion losses in the inverter (and where applicable in the transformer) and operational fai ures. Manufacturer data on module output under STC may vary from the actual value s. Therefore, it is imperative that information on tolerances are checked. The specific yield is generally highe r in sunny locations but it is not dependent on nom i- nal module efficiency. System efficiency 22.5 The system efficiency of a PV plant is the relationship between the useful yield (alternat- a of the PV mo d- ing current yield) and the total amount of irradiance on the surface are . The nominal module efficiency affects system efficiency. ules (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 74 )

75 22.6 Performance ratio -connected PV The performance ratio (PR) is often used to compare the efficiency of grid plants at different locations with various module types. s the relationship between a plant’s useful yield (alterna Performance ra tio is defined a t- ing current yield) and ideal yield (the product of the total amount of irradiance on the generator surface area and nominal module efficiency). annual PR values of between 80 and 90 percent. New, carefully planned plants achieve Base load, intermediate load, peak load, grid load and residual load 22.7 «Power demands fluctuate throughout the course of the day, generally peaking during the day and falling to a minimum at night between midnight and 6:00am. Power de- mand development is depicted as a load curve or load profile. In traditional energy tec h- : nology, the load curve is divided into three sections as follows 1. base load 2. intermediate load peak load 3. -hour period. It hat remains almost constant over a 24 Base load describes the load line t -load power plants, such as nuclear power plants, lignite -fired coal is covered by base of-the power plants and, for the time being, run- -river power plants. Intermediate load describes self ks in power demand which are easy to -contained pea forecast and refers to the majority of power needed during the course of a day in addi- tion to base load. Intermediate load is covered by intermediate -load plants, such as hard coal -fired power plants and combined cycle power plants powered by methane with oil - fired power plants being used now and again. Peak load refers to the remaining power demands, generally coming into play when demand is at its very highest. Peak load is handled by peak -load power plants, such as ga s turbines and pumped- storage power plants. These can be switched to nominal output within an extremely short space of time, compensating for fluctuations and covering peaks in load.” (...) «Grid load refers to the amount of electricity taken from the grid, while residual load is the grid load less the amount of renewable energy fed in.” [ISET1] s power consumption net and Gross 22.8 The gross power consumption is calculated as the sum of the national electricity produc- tion and the balance of power exchanged between bordering countries. It includes the es and unknowns. In 2017 self -consumption from power plants, storage losses, grid loss , gross power consumption [AGEB6] the sum of all losses amounted to 13% of the . Net power consumption is the amount of electr ical energy (final energy) used by the end consumer. PV plants predominantly generate energy decentrally when electricity de- does not reduce the PV yield by a mand is at a peak and the PV plant’s self -consumption comparing output with noteworthy amount. Instead of following the usual method of with net pow- output power PV to compare gross power consumption, it is plausible for er consumption. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 75 )

76 22.9 1] External costs [DLR «External costs, as defined within the context of the tec hnological external effects, arise as a result of damage inflicted on the environment, climate and human health due to s and noise emissions caused by economic activities. These include: pollutant damage to flora and fauna, materials and human health caused by air pollution; • damage caused by air pollution is attributable to converting and the majority of using energy (including transportation). emerging effects of climate change caused by the increasing accumulation of • CO and other greenhouse gases in the atmosphere and its consequences; in 2 Germany, 85 percent of these gases are emitted by the energy sector. damage caused by pollution to bodies of water, soil contamination, waste and • noise pollution. As this study concentrates solely on classic airborne pollutants and greenhouse gases generated as a result of converting energy, these are not dealt with further.” (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 76 )

77 Appendix: Conversion tables [EEBW] 23 (86 77 12 December 2018 181025_Recent_Facts_about_PV_in_Germany.docx )

78 24 Appendix: Abbreviations BMU German Federal Ministry for the Environment, Nature Conservation and Nucl e- ar Safety German Solar Industry Association BSW CCS Carbon dioxide capture and storage – segregation of CO from power plant 2 emissions and storage in geological formations CHP Combined heat and power – the principle of simultaneously generating m e- chanical energy (ultimately converted into electrical energy) and useful heat a plant that uses combustion engines or gas – CHP Combined heat and power plant turbines to generate electrical energy and heat plant EEG Act on Granting Priority to Renewable Energy Sources (Renewable Energy Sources Act, EEG) ESC Energy supply company ICT Information and communications technology International Energy Agency IEA PV Photovoltaics Renewable energy RE rated power of a PV module or array – W Watt peak p 25 Appendix: Sources , Metaanalyse: Digitalisierung der Energiewende Agentur für Erneuerbare AEE1 Energien , August 2018 AEE2 - Übersicht zu Erneuerbaren Energien , https://www.foederal - Bundesländer , Agent ur für Erneuerbare Energien, erneuerbar.de/uebersicht/bundeslaender Oc tober 2018 AGEB1 Energieverbrauch in Deutschland - Daten für das 1. - 3. Quartal 2011, Working Group on Energy Balances (Arbeitsgemeinschaft Energiebila n- zen e.V ., November 2011 AGEB2 für die Bundesrepublik Deutschland in Petajoule, AGEB , May Energieflussbild 2018 Bruttostromerzeugung nach Energietr ä- in Deutschland von 1990 bis 2015 AGEB5 gern, AG http://www.ag - energiebilanzen.de/ , 28 January 2016 EB, AGEB6 Energieverbr auch in Deutschland in Jahr 2017 , AGEB, Februar y 201 8 AG O- Stromnetze für 65 Prozent Erneuerbare bis 2030. Zwölf Maßnahmen für den synchronen Ausbau von Netzen und Erneuerbaren Energie n, Agora Energi e- RA wende, July 2018 AMP Sektorenkopplung: Amprion und Open Grid Europe geben Power - to - Gas in , Pressemeldung Amp 2018 rion, June Deutschland einen Schub Michael Weis, Katrin von Bevern, Thomas Linnemann; Forschungsförderung ATW1 1956 bis 2010: Anschubfinanzierung oder Subvention?, ATW Kernenergie 56, Jg. (2011) Heft 8/9 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 78 )

79 ATW2 Holger Ludwig, Tatiana Salnikova, Ulrich Wass; Lastwechselfähgikeiten deu t- scher KKW, ATW 55, Jg (2010), Heft 8/9 Hintergrundinformationen zur Besonderen Ausgleichs regelung, Antragsve r- BAFA fahren 2013 auf Begrenzung der EEG -Umlage 2014, Hrsg.: Bundesminister i- um für Umwelt, Naturschutz und Reaktorsicherhei t (BMU) und Bundesamt für Wirtschaft und Ausfuhrkontrolle (BAFA), 15 October 2013 BDEW1 Durchschnittliche Ausnutzungsd auer der Kraftwerke im Jahr 2007 in Stu n- den, as of September 2010 BDEW2 Erneuerbare Energien und das EEG: Zahlen, Fakten, Grafiken (2013); BDEW und Wasserwirtschaft e.V., 31 January 2013 - Bundesverband der Energie BDEW - Strompreisanalyse Juni 2014, Haushalte und Industrie, Berlin, 20. Juni BDEW3 2014 Auswertung der Transparenzdaten, BDEW Bu Redispatch in Deutschland – n- BDEW4 9. August 2016 desverband der Energie und wasserwirtschaft e.B., - BDEW5 BDEW Press conference 20.12.2017 https://www.bdew.de/media/documents/20171220_PI_Anlage_Zahlen- (in German) Fakten.pdf Beck m- M. Beck, G. Bopp, A. Goetzberger, T. Obergfell, C. Reise, S. Schindele, Co c – Optimization of Orientation bining PV and Food Crops to Agrophotovoltai and Harvest, 27th European Photovoltaic Solar Energy Conference, Frankfurt, – Germany, September 24 28, 2012 BMVI Räumlich differenzierte Flächenpotentiale für erneuerbare Energien in - Online - Pub likation 08/2015. Deutschland. BMVI (Hrsg.), BMVI 1 Gesamtausgabe der Energiedaten - Datensammlung des BMWi, as of BMWi Jan. 12. 2016 BMWi3 Forschungsförderung für die Energiewende, Bundesbericht Energieforschung 2016, Bundesministerium für Wirtschaft und Energie (BMWi) BMWi4 Energiegewinnung und Energieverbrauch, BMWi, Downloaded am 28.8.2016 von https://www.bmwi.de/DE/Themen/Energie/Energiedaten- und- analysen/Energiedaten/energiegewinnung - energieverbrauch.html BMWi5 Umlage 200 - EEG in Zahlen: Vergütung, Differenzkosten und EEG 0 bis 2018, as of October 2017 BMWi6 Bundesbericht Energieforschung 2018, Bundesministerium für Wirtschaft und Energie (BMWi) , June 2018 - BNA1 Bundesnetzagentur legt Eigenkapitalrenditen für Investitionen in die Strom und Gasnetze fest, Pressemitteilung der Bundesnetzagentur vom 2. m- Nove ber 2011 BNA2 https://www.bundesnetzagentur.de/DE/Sachgebiete/ElektrizitaetundGas/ Unte rnehmen_Institutionen/E rneuerbareEnergien/ZahlenDatenInformationen/ EEG_Registerdaten/EEG_Registerdaten_node.html m- Monitoringbericht 2017, Bundesnetzagentur für Elektrizität, Gas, Teleko BNA3 munikation, Post und Eisenbahnen, , Stand 13. Dezember Bundeskartellamt 2017 BSW Statistische Zahlen der deutschen Solarstrombranche (Photovoltaik), German (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 79 )

80 Februar 201 ry Association (BSW - Solar), Solar Indust 8 Bun- EEG -Umlage 2010, German Parliament, Scientific Services, No. 21/10, March destag 25, 2010 i- Bu n- Antwort der Bundesregierung auf die Kleine Anfrage der Abgeordneten Ol desreg ver Krischer, Hans - Josef Fell, Bärbel Höhn, weiterer Abgeordneter und der – Fraktion BÜNDNIS 90/DIE GRÜNEN – printed material 17/10018 DEWI on Windenergie in Energiewirtschaftliche Planung für die Netzintegration v Deutschland an Land und Offshore bis zum Jahr 2020, Studie im Auftrag der Deutschen Energie - Agentur GmbH (dena), February 2005 DLR 1 Externe Kosten der Stromerzeugung aus erneuerbaren Energien im Vergleich zur Stromerzeugung aus fossilen Energieträgern, Gutachten im Rahmen von Beratungsleistungen für das Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit, May 2007 M. O’Sullivan (DLR), U. Lehr (GWS), D. Edler (DIW), Bruttobeschäftigung DLR2 durch erneuerbare Energien in Deutsc hland und verringerte fossile Brenn- stoffimporte durch erneuerbare Energien und Energieef fizienz, Zulieferung für den Mo n i toringbericht 2015, Stand: September 2015 Electric Power Monthly, U.S. Department of Energy, October 2013 DOE lobalstrahlungsdaten für Bereitstellung von historischen G DWD Wolfgang Riecke, die Photovoltaik, Second Symposium on Energy Meteorology, April 2011 ECOFY Abschätzung der Kosten für die Integration großer Mengen an Photovoltaik in die Niederspannungsnetze und Bewertung von Optimierungspotenzialen, S ECOFYS, March 2012 EEBW - Württemberg 2011, Ministry of the Enviro n- Erneuerbare Energien in Baden -Württemberg, N o- ment, Climate Protection and the Energy Sector of Baden vember 2012 EEG Gesetz zur Einführung von Ausschreibungen für Strom aus erneuerbaren Energien und zu weiteren Änderungen des Rechts der erneuerbaren Energien (EEG 2017), Bundesrat Drucksache 355/16, 08.07.16 Positionspapier der European Energy Exchange und EPEX SPTO, February EEX 2014 Zukunft: ENERV - Mobility ENER E IE an Meilenstein - Projekt beteiligt , Pressemeldung, - Südwestfalen Energie und Wasser AG , Oc tober 2018 EPA United States Environmental Protection Agency, downloaded on 9.7.2013 from h ttp://www.epa.gov/climatechange/science/causes.html#GreenhouseRole EPIA EPIA Sustainability Working Group Fact Sheet, May 13, 2011 FINA CO - European Emission Allowances, http://www.finanzen.net/rohstoffe/co2 2 , finanzen.net GmbH , Oc tober 2018 emissionsrechte/Chart FÖS 1 Externe Kosten der Atomenergie und Reformvorschläge zum At omhaftung s- recht, Hintergrundpapier zur Dokumentation von Annahmen, Methoden und Ergebnissen, Green Budget Germany (Forum Ökologisch- Soziale Marktwir t- schaft e.V.), September 2012 FÖS2 - Vergleich der staatlichen Förderungen und ge - Was Strom wirklich kostet (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 80 )

81 - samtgesellschaftlichen Kosten von konventionellen und erneuerbaren Ener gien, Studie im Auftrag von Greenpeace Energy eG und dem Bundesver -band WindEnergie e.V. (BWE), Forum Ökologisch- Soziale Marktwirtschaft e.V. (FÖS), August 2012 FVEE 1 Energiekonzept 2050 - Eine Vision für ein nachhaltiges Energiekonzept auf Basis von Energieeffizienz und 100% erneuerbaren Energien« , German Res e- arch Association for Renewable Energy (Forschungsverbund Erneuerbare Energien, FVEE), June 2010, chart by B. Burger and update d on November 28, 2011 - Market trends and – Term Renewable Energy Market Report 2013 IEA1 Medium projections to 2018, International Energy Agency (IEA), July 2013 IEA2 Redrawing the Energy - Climate Map, World Energy Outlook Special Report. Energy Agency (IEA), June 2013 International IEA3 Energiepolitik der IEA - Länder, Prüfung 2013, Deutschland, Zusammenfas - sung, International Energy Agency (IEA), April 2013 IEA4 World Energy Outlook 2013, International Energy Agency (IEA), November 2013 IPCC Working Group I Contribution to the IPCC Fifth Assessment Report, Climate Change 2013: The Physical Science Basis, Summary for Policymakers, Inter - governmental Panel on Climate Change (IPCC), WGI AR5, Sept. 2013 Modulen - , Abschlussb e- IPV Jessica Nover, Schadstofffreisetzung aus Photov oltaik , Universität Stuttgart, Institut für Photovoltaik, 2018 richt ISE1 Christoph Kost, Dr. Thomas Schlegl; Levelized Cost of Electricity Renewable Energies, study conducted by the Fraunhofer Institute for Solar Energy Sy s- tems ISE, December 2010 Kiefer K, Dirnberger D, Müller B, Heydenreich W, Kröger - Vodde A. A Degr a- ISE2 dation Analysis of PV Power Plants. 25th European Photovoltaic Solar Energy Conference and Exhibition, Valencia, 2010. ISE3 Brochures on the PV ENERGY WORLD specia l exhibit at Intersolar Europe 2011, Solar Pr omotion GmbH (ed.), Munich, June 2011, http://www.intersolar.de/fileadmin/Intersolar_Europe/Besucher_Service/ISE201 1_PV_Energy_World.pdf n- ISE4 https://www.energy - charts.de , Editor: Prof. Dr. Bruno Burger, Fraunhofer I stitute for Solar Energy Systems ISE, Freiburg, Germany ISE5 Hans - Martin Henning, Andreas Palzer; 100 % Erneuerbare Energien für Strom und Wärme in Deutschland; study con ducted by the Fraunhofer Inst i- tute for Solar Energy Systems ISE, Novembe r 2012 ISE6 Fire Protection in Photovoltaic Systems – Facts replace Fiction, press release by Fraunhofer ISE, February 2013; more information on fire protection can be found at www.pvbrandsicherheit.de ISE7 Speicherstudie 2013 - Kurzgutachten zur Abschä tzung und Einordnung ene r- giewirtschaftlicher, ökonomischer und anderer Effekte bei Förderung von objektgebunden elektrochemischen Speichern, Studie des Fraunhofer - 2013 Instituts für Solare Energiesysteme ISE, Januar y Umlage, Fraunhofer Insitute for Solar Energy Systems ISE, - Kurzstudie zur EEG ISE9 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 81 )

82 April 2015 ISE10 Photovoltaics Report, Fraunhofer - Instituts für Solare Energiesysteme ISE, PSE Conferences & Consulting GmbH, August 2018 ISET1 Yves - Marie Saint - Drenan et al. « Summenganglinien für Energie 2.0”, study conducted by the Institute for Solar Energy Technology (Institut für Solare Energieversorgungstechnik ISET e.V., April 2009 ISET2 Rolle der Solarstromerzeugung in zukünftigen Energieversorgungsstrukturen - Welche Wertigkeit hat Solarstrom?, investigation commissioned by the Ge r- man Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, May 2008 IWES 1 Vorstudie zur Integration großer Anteile Photovoltaik in die elektrische Ene r- study commissioned by the German Solar Industry Association gieversorgung, (BSW) and the Fraunhofer Institute for Wind Energy and Energy System Tec h- nology IWES, November 2011 Interaktion EE i- Strom, Wärme und Verkehr, Studie im Auftrag des Bundesm IWES2 - nisterium für Wirtschaft und Energie, Projektleitung Fraunhofer - Institut für Windenergie und Energiesystemtechnik (IWES), September 2015 IWF How Large Are Global Energy Subsidies? IMF Working Paper by David Coady, Ian Parry, Louis Sears and Baoping Shang, 2015 IZES Kurzfr istige Effekte der PV - Einspeisung auf den Großhandelsstrompreis, Inst i- tut für ZukunftsEnergieSysteme (IZES), January 31, 2012 2018 KBA Zahlen im Überblick – Statistik, Kraftfahrt - Bundesamt, Jun e Anlage aus - Berechnung von Immissionen beim Brand einer Photovoltaik 1 LFU Cadmiumtellurid -Modulen, Bavarian Environment Agency (Bayerisches La n- - desamt für Umwelt), 11 2011 2 Be LFU - 1515 - 21294, Bayerisches La n- urteilung von Kunststoffbränden, Az: 1/7 desamt für Umwelt, 1995 - LICH Emissionen und T- Analyse des Beitrags von Mini - BHKW zur Senkung von CO2 BLICK zum Ausgleich von Windenergie, Gutachten zum geplanten »ZuhauseKraf t- werk«, commissioned by LichtBlick AG, LBD - Beratungsgesellschaft mbH, 2009 e Association of the German Petroleum Industry (Mineralö l- Homepage of th MWV wirtschaftsverband e.V.), as of December 10, 2011 Fortschrittsbericht 2018 – Markthochlaufphase, Nationale Plattform Elektr NPE o- y 2018 mobilität, Ma ÖKO EEG - Umlage und die Kosten der Stromversorgung für 2014 – Eine Analyse von Trends, Ursachen und Wechselwirkungen, Kurzstudie im Auftrag von Greenpeace, June 2013 i- ÖKO2 Aktueller Stand der KWK - Erzeugung (Dezember 2015), Studie des Ökoinst tuts e.V. im Auftrag des Bundesministerium für Wirtschaft und Energie, ember 2015 c De f- ÖKO3 Eingesparte Kosten für Energieimporte im Jahr 2015 und die Innovationse fekte durch die Nutzung erneuerbarer Energien in Deutschland, Memo des Ökoinstituts e.V., Oc tober 2016 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 82 )

83 Pro g- r- Bedeutung der internationalen Wasserkraft - Speicherung für die Ene giewende, study conducted by Prognos AG and commissioned by the World nos Energy Council, Germany (Weltenergierat – Deutschland e.V.), October 9, 2012 PVGIS Photovoltaic Geographical Information System, http://re.jrc.ec.europa.eu/pvgis/apps4/pvest.php V. Quaschning, Solare Unabhängig keitserklärung, Photovoltaik, Oc tober Quasch 2012 Roon S. von Roon, M. Huck, Merit Order des Kraftwerksparks, Research Center for Energy Eco nomics (Forschungsstelle für Energiewirtschaft e.V.), June 2010 RWE Die Energiewende, Daten und Fakten von RWE Deutschland, October 6, 2012 RWE2 RWE nimmt Batteriespeicher in Herdecke in Betrieb - Sechs Millionen Euro Investition, sieben MWh Kapazität , Pressemeldung RWE, Februar y 2018 Salz t » GrInHy « – Projec Green Industrial Hydrogen, Pressemeldung , Salzgitter AG , September 2016 Shell « New Lens Scenarios – A Shift in Perspective for a World in Transition”, study commissioned by Royal Dutch Shell, March 2013 SWM M-Partnerkraft - Das virtuelle Kraftwerk der SWM, Flyer der Stadtwerke Mü n- chen, Januar y 2013 , T « Immer sparsamer » TEST est 1/2012, Stiftung Warentest – Trend Anlagen in der Stromerzeugung, Marktakteure Erneuerbare – Energien trend : research institute for trend and market research, August 2011 re- search UBA Energieziel 2050: 100% Strom aus erneuerbaren Quellen, Federal Enviro n- ment Agency , July 2010 UBA2 „Entwicklung der spezifischen Kohlendioxid - Emissionen des deutschen Strommix in den Jahren 1990 – 2016“, Federal Environment Agency , May 2017 Artikel auf - - waerme https://www.umweltbundesamt.de/daten/energie/kraft UBA3 kopplung kwk#textpart - 1 , Oktober 2018 - VATT CO bringt - freie Energie fürs Quartier: Sektorenkoppelnder Stahlspeicher 2 Energiewende auf Hochtemperatur , Pressemeldung Vattenfall, October 2018 VFL Berechnung einer risikoadäquaten Versicherungsprämie zur Deckung der Haftpflichtrisiken, die aus dem Betrieb von Kernkraftwerken resultieren, study conducted by the Versicherungsforen Leipzig and commissioned by the Ge r- man Renewable Energy Federation (Bundesverband Erneuerbare Energie e.V., BEE), April 1, 2011 VGB Kraftwerke 2020+, opinion of the Scientific Council of VGB PowerTech e.V., 2010 VIK Strompreisindex Mittelspannung, Verband der Industriellen Energie und - VIK Kraftwirtschaft e.V., September 2016 ) 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 83 (86

84 26 Appendix: Figures Figure 1: Percentage renewable energy in net electricity consumption (final energy) for Germany, data from [BMWi], [AGEB5] ... 6 Figure 2: Average end customer price (net system price) for installed rooftop systems with rated nominal power from 10 - 100 kWp, data from BSW/EuPD, plotted by PSE AG. ... 8 Figure 3: Historical price development of PV modules (PSE AG/Fraunhofer ISE, data from: Strategies Unlimited/Navigant Consulting/EuPD). The straight line shows the price 9 ... development trend. Figure 4: Feed -in tariff for PV power as a function of commissioning date, average remuneration of the bidding rounds of the Federal Network Agency, electricity prices from [BMWi1] up to 2016 and with estimates thereafter, average compensation for PV power , partly estimated [BMWi5]. ... 10 ... in tariff, data from [BMWi1] and [BMWi5] Figure 5: PV expansion and total feed- 12 Figure 6: Pricing on the European Energy Exchange EEX [Roon]. ... 13 Figure 7: Influence of RE on the average spot price on the energy exchange (EEX) [BDEW2]. ... 13 Figure 8: Development of the average spot electricity price and the calculated ... 14 differential costs [BDEW2]. Figure 9: Electricity consumed and EEG surcharge for industry (estimated for 2015) 15 ... [BDEW24] 16 Figure 10: Influential parameters and calculating method for the EEG surcharge [ÖKO] Figure 11: Development of the EEG surcharge and the EEG differential costs [ISE9] ... 17 Figure 12: Price of CO2 allowances from 2008- 2013 on the EEX spot market (http://www.finanzen.net/rohstoffe/co2 -emissionsrechte/Chart) ... 19 Figure 13: An example showing components making up the domestic electricity price of 29,2 €- cts/kWh in 2017 (CHP: German Combined Heat and Power Act); Germa n - -NEV): easing the burden on energy Electricity Grid Access Ordinance (Strom intensive industries; concession fee: fee for using public land; offshore liability fee; AbLa: Levy on interruptible loads), Data from [BDEW3]. ... 21 Figure 14: Development of gross domestic electricity prices (2017, estimated at 3% increase), net electricity prices for large -scale industrial consumers [BMWi1] and the EEG surcharge; about 55% of the gross domestic electricity price is made up of taxes and fees. ... 22 ... Figure 15: VIK electricity price index for medium -voltage customers [VIK] 23 Figure 16: Electricity export (negative values indicate export) for Germany [ISE4] ... 24 Figure 17: Rough estimate of levelized cost of electricity (LCOE) for PV power plants at different annual irradiances ... 25 ... 27 Figure 18: Employees in the RE sector in Germany [DLR2] Figure 19: Division of ownership of the total installed capacity of PV plants at the end of ... 2010 [trend:research]. 29 (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 84 )

85 Figure 20: Concept for a virtual power plant of the Stadtwerke München (Munich ... 29 municipal works) [SWM] Figure 21: Germany’s e xpenditure in the Energy Research Program of the Federal Government by topic in € million [BMWi6]. ... 30 Figure 22: Funding for PV research categorized by technology in € million [BMWi6]. ... 30 Figure 23: Left: Feed -in of PV power [BSW], Right: Distribution of installed PV power according to plant size [ISE10] ... 31 lectronically limited electrical energy in GWh / year [BNA3] 32 ... Figure 24: E ... 33 Figure 25: Actual and predicted hourly generation of power in 2014 [ISE4]. Figure 26: Average power for the supply of solar and wind power in 2017, 15- minute values [ISE4]. ... 34 ... 35 Figure 27: Monthly production of PV and wind power for 2012 - 2014 [ISE4]. Figure 28: Example showing course of electricity trading price, conventional and renewable electricity in the 18th calendar week in May 2018 [ISE 4] ... 37 Figure 29: System Average Interruption Duration Index (SAIDI) for different network levels in minutes / year [BNA3] ... 38 2 of energy crops (2,3) or 40 Figure 30: Vehicle range for an annual yield of 1 a = 100 m 2 2 of elevated PV modules constructed on 100 m on flat, open ground, Sources: m (3). Photon, April 2007 (1) and Fachagentur Nachwachsende Rohstoffe (2), 41 ... Figure 31 : Forecasted hours of full -load operation for renewable energy plants, mean 2016 [ÜNB] ... 42 values from 2012- Figure 32: Horizontal annual global irradiation in Germany averaged over 1981- 2010 44 Figure 33: Developm ent of the atmospheric CO concentration and the mean global 2 temperature change based on the NASA Global Land- Ocean Temperature Index [IEA2]. ... 45 Figure 34: Estimate of the atmospheric CO concentration and the temperature in 2 Antarctica based on ice core data [EPA], CO concentration for 2016 has been 2 46 added ... 35: Primary energy required to generate power from various energy sources Figure ... 47 [EEBW]. Figure 36: Development of annually installed PV capacity for Germany and globally, or Rest of World, (RoW), (last year estimated) CAGR stands for the compound annual growth rate. ... 48 Figure 37: Energy flow diagram for Germany 2017 in petajoules [AGEB2]. ... 50 Figure 38: Germany’s import quotas for primary energy sources (www.umweltbundesamt.de) 51 ... Figure 39: Cost development for the provision of primary energy in Germany [ÖKO3] 51 Figure 40: Share of final energy in Germany, categorized by utilization 2014 [BMWi4]. 52 Figure 41: Rough estimate of the monthly distribution (annual total = 100 percent) of solar power calculated for Freiburg [PVGIS], wind power [DEWI], heating requirements based on the heating degree days (VDI Guideline 2067 and DIN 4713), energy requirements for domestic hot water production, electricity demand [AGEB1] ... 53 and fuel requirements [MWV]. Figure 42: Scenario of a German energy system, schematic representation of the system 54 ... composition. [ISE5] (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 85 )

86 Figure 43: Schematic representation of a residual load curve for Germany with power -); Red: Converters that produce supply of 100% EE, with generators (+) and loads ( usable heat or waste heat 55 ... Figure 44: Primary energy consumption by sources [Shell] ... 56 Figure 45: Yield development throughout t he course of a day of PV plants installed in a variety of different ways, calculated using the software PVsol on a predominantly clear July day in Freiburg. ... 57 ure 46: Power plant availability [VGB]. ... 58 Fig Figure 47: Energy consumption of an average household in Germany, not including hot 59 ... water production [RWE]. Figure 48: Total power of hydroelectric stations in selected countries, status in 2010 [Prognos]. The capacity given for each of type of power plant differs according to 61 the data source ... site consumption in dependence of the battery capacity and PV Figure 49: Percent of on- tricity consumption of -family home with an annual elec array power for a single 4,700 kWh. [Quasch] ... 63 optimized system operation [ISE7] Figure 50: Comparison of the conventional and grid- 64 ... Figure 51: Possible ways of converting and storing PV power with indicative data on ... efficiency values. 65 Figure 52 Simplified scheme of a Renewable Energy System with the most important -related components of the categories production, conversion, storage and grid 67 ... consumption. (86 181025_Recent_Facts_about_PV_in_Germany.docx 12 December 2018 86 )

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