Germany Power Report Q4 2012

BMI View: From this quarter BMI’s Power service will focus chiefly on thermal sources, hydropower
and nuclear electricity, while developments pertinent to the green segment will be discussed in depth by
our Renewables service. That said, we continue to provide a detailed overview of the dynamics affecting
the power sector. Despite a year having passed since the German government’s U-turn on nuclear power,
the country is still looking for an appropriate strategy that will provide sufficient electricity. Such a
strategy must also allow the country to respect its carbon emissions commitments and limit price rises.
While natural gas appears likely to be the replacement fuel from an environmental perspective, cheap
coal remains the most profitable way to produce electricity. On the greener side of the power spectrum,
Germany has retained its position as Europe’s bellwether for renewable energy, but not without
controversy – owing primarily to the high costs associated with the deployment of these technologies.
The key trends and developments in the German electricity market are:
?? News that consumers, utilities and members of the German government are beginning to voice
concerns about the associated costs of Germany’s energy U-turn reconfirms our view that the
new energy agenda presents a significant financial burden to the country. With the nuclear
phase-out already weakening German utilities, the enormous cost of incorporating renewable
energy into the electricity mix is unsustainable, unless domestic electricity prices are increased
substantially.
?? We have revised our forecast to take into account larger-than-expected coal usage. While natural
gas appears to be the most likely replacement fuel from an environmental perspective, cheap
coal remains a more profitable way to produce electricity in the country. On June 28 2012, the
Bundestag approved cuts to incentives for the solar power industry that were milder and more
watered down than expected. Following an agreement reached with the help of a mediation
committee, plans to introduce a 90% limit on incentives for larger solar power plants of over 10
kilowatts (KW) were dropped, and will instead be introduced in 2014.
?? Delays in connecting wind farms to the power grid – as well as grid outages after the plants have
started operations – are jeopardising Germany’s ambitious offshore wind target. Whilst the quick
implementation of new liability regulations could play a role in restoring economic viability in
the short-term, we remain of the opinion that a more comprehensive plan of investment in the
country’s grid will be key for the successful integration of offshore wind power into the mix.

Germany Power Report Q4 2012

BMI Industry View .... 5
SWOT Analysis .... 6
Germany Power SWOT 6
Regional Industry Overview .... 7
Industry Forecast Scenario ... 11
Germany Snapshot (Macro) . 11
Table: Country Snapshot: Economic and Demographic Data, 2011-2021 . 11
Table: Country Snapshot: Power Sector .. 11
Germany Forecast Scenario 12
Electricity Generation And Power Generating Capacity .. 12
Table: Germany Total Electricity Generation Data And Forecasts, 2010-2016 ... 12
Table: Germany Total Electricity Generation Long Term Forecasts, 2015-2021 . 14
Table: Germany Electricity Generating Capacity Data And Forecasts, 2010-2016 .. 15
Table: Germany Electricity Generating Capacity Long Term Forecasts, 2015-2021 16
Electricity Consumption .. 23
Table: Germany Total Electricity Consumption Data And Forecasts, 2010-2016 23
Table: Germany Total Electricity Consumption Long Term Forecasts, 2015-2021 ... 23
Transmission & Distribution, Imports & Exports ... 24
Table: Germany Electric Power Transmission And Distribution Losses Data And Forecasts, 2010-2016 ... 24
Table: Germany Electric Power Transmission And Distribution Losses Long Term Forecasts, 2015-2021 . 24
Table: Germany Trade Data And Forecasts, 2010-2016 .. 25
Table: Germany Trade Long Term Forecasts, 2015-2021 25
Key Policies/Market Structure ... 26
Regulation And Competition 26
Sustainable Energy Policies. 27
Pricing ... 28
Table: Electricity Prices In the EU Member States, As Of May 2012 .... 28
Risk/Reward Ratings ... 30
Developed States Regional Power Risk/Reward Ratings .. 30
Table: Developed States Power Risk/Reward Ratings (Scores Out Of 100) 34
Germany's Power Rating/Reward Ratings ... 34
Rewards . 34
Risks . 35
Competitive Landscape ... 36
E.ON . 36
RWE .. 36
EnBW Energie Baden-Württemberg AG (EnBW).... 37
Vattenfall .... 37
Verbund . 37
Company Monitor ... 39
E.ON . 39
RWE .. 44
Glossary of Terms .. 47
Table: Glossary of Terms 47
Methodology And Sources .... 48
Industry Forecasts 48
Power Industry - Data Methodology .. 49
Generation and Consumption Data .... 49
Electricity Generation Capacity Data . 50
Power Risk/Reward Ratings Methodology .... 50
Table: Power Risk/Reward Indicators 52
Sources .. 54Table: Country Snapshot: Economic and Demographic Data, -
Table: Country Snapshot: Power Sector
Table: Germany Total Electricity Generation Data And Forecasts, -
Table: Germany Total Electricity Generation Long Term Forecasts, -
Table: Germany Electricity Generating Capacity Data And Forecasts, -
Table: Germany Electricity Generating Capacity Long Term Forecasts, -
Table: Germany Total Electricity Consumption Data And Forecasts, -
Table: Germany Total Electricity Consumption Long Term Forecasts, -
Table: Germany Electric Power Transmission And Distribution Losses Data And Forecasts, -
Table: Germany Electric Power Transmission And Distribution Losses Long Term Forecasts, -
Table: Germany Trade Data And Forecasts, -
Table: Germany Trade Long Term Forecasts, -
Table: Electricity Prices In the EU Member States, As Of May
Table: Developed States Power Risk/Reward Ratings (Scores Out Of )
Table: Glossary of Terms
Table: Power Risk/Reward Indicators

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