ENERGY STORAGE IN

GERMANY: DRIVERS
BEHIND THE BOOM

APRIL 2016

Tobias Rothacher
Energy, Environment & Resources
www.gtai.de
Agenda

1. Is there a boom?
2. Residential and commercial PV-battery systems
3. Grid-connected battery systems
4. Growth Potential
5. How Germany Trade & Invest supports you

© Germany Trade & Invest www.gtai.de 2

PV-Batteries in Germany: >30k systems installed
16k systems sold in 2015 alone

Number of PV-battery systems installed in Germany

# of units

8000 40000 • Market CAGR [2013; 2015]:

7000 35000 140%
6000 30000 • More and more battery
5000 25000 customers use the KfW
4000 20000
incentive program
3000 15000 • Punctual increase in demand
2000 10000
during Q4/2015 due to fading
incentive program from KfW
1000 5000

0 0
• The NEW incentive program
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 from KfW has started in
2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015
March 2016 and will be
KfW-supported Non-KfW Cumulated installations (right ordinate)
available until end of 2018
Source: KfW 2016, BSW 2016
© Germany Trade & Invest www.gtai.de 3
50% of private PV customers decide for a battery
Almost all of them ask their installer about battery options

Number of newly installed PV systems vs. number of newly installed battery systems in 2015

# of units share of storage [%]

18.000 60%

15.000 50%

12.000 40%

9.000 30%

6.000 20%

3.000 10%

0 0%
Q1 15 Q2 15 Q3 15 Q4 15

Number of PV systems (<30 kWp)

Number of PV-batteries, excluding retrofit
Share of new PV systems installed with batteries (right ordinate)

Source: Federal Network Agency 2016; KfW 2016, BSW 2016

© Germany Trade & Invest www.gtai.de 4
Large-scale battery market taking off
From 4 MW in 2012 to over 140 MW by 2017

Battery capacity for primary control power in A: Berlin, Younicos & Vattenfall, [Hybrid: Li-Ion, NAS], 1 MW
B: Völklingen-Fenne, Steag [Li-Ion], 1 MW
Germany 2016/2017: 141 MW
C: Berlin, Younicos & Vattenfall [LiFePo], 2 MW
D: Pellworm, EON & Schleswig-Holstein Netz AG
140
[Hybrid: Li-ion, Redox-flow], 0.76 MW
E: Schwerin, Younicos & Wemag [Li-Ion], 5 MW
120 F: Braderup, Bosch [Hybrid: Li-ion, Redox-flow], 2 MW
S G: Alt Darber, Upside Group[Lead-acid], 1.6 MW
100 H: Dresden, Younicos & DREWAG [Li-ion], 2 MW
T I: Feldheim, Energiequelle GmbH [Li-Ion], 10 MW
80 J: Various sites, N-ERGIE & Caterva [Li-Ion], 1 MW
R
K: Lünen, Daimler [Li-Ion second life], 13 MW
Q L: Aachen, Eon Energy Research Centre at RWTH Aachen University
60
[Hybrid: Li-ion, hightemperature, lead-acid], 5 MW
P M: Dörverden, Statkraft [Li-Ion, ads-tec], 3 MW
40 N: Neuhardenberg, Upside Group [Li-Ion], 5 MW
O
O: Herne, Steag [Li-Ion], 15 MW
N P: Lünen, Steag [Li-Ion], 15 MW
20 M
L Q: Duisburg-Walsum, Steag [Li-Ion], 15 MW
J
G F I K
C A B E D R: Bexbach, Steag [Li-Ion], 15 MW
0 H
2012/2013 2014 2015 2016/2017 S: Fenne, Steag [Li-Ion], 15 MW
Year of commissioning T: Weiher, Steag [Li-Ion], 15 MW

Source: IEK-STE Database, Energiespeicher Jülich

© Germany Trade & Invest www.gtai.de 5
Agenda

1. Is there a boom?
2. Residential and commercial PV-battery systems
3. Grid-connected battery systems
4. Growth Potential
5. How Germany Trade & Invest supports you

© Germany Trade & Invest www.gtai.de 6

60-80% energy independence with PV+battery
Example household with a 5 kWp PV + 6 kWh Battery system:
100% during summer, ~20% during Winter  75% over the year

Typical daily energy profile in summer Typical daily energy profile in winter
5 5
kWh

kWh
0 0
1h 3h 5h 7h 9h 11h 13h 15h 17h 19h 21h 23h 1h 3h 5h 7h 9h 11h 13h 15h 17h 19h 21h 23h

Consumption PV-Production Battery Output

Typical annual consumption profile

From Grid
Energy

From Battery

From PV

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Based on 3.500 kWh annual consumption (Standard load profile), 5 kWp PV-System @ 1000kWh/kWp (Standard profile), Battery with 6 kWh usable capacity

© Germany Trade & Invest www.gtai.de 7

Falling battery prices make storage profitable
The cost of Li-systems decreased by ~18% p.a. in the past 2 years

Cost per 4000

usable kWh -18% p.a.
(€/kWh)1 3500

3000

2500

2000

1500

1000

500

0
Pb n=18 Li n=8 Pbn=152 Lin=86 Pb
n=303 Li
n=251 Pb
n=480 Li
n=716 Pb
n=120 Li
n=309

H1 2013 H2 2013 H1 2014 H2 2014 H1 2015

1DoD adjusted, incl. VAT, excl. installation

Source: KfW Speichermonitoring, ISEA/RWTH Aachen 2015; own calculation
© Germany Trade & Invest www.gtai.de 8
From PV Grid-Parity to Battery-Parity in 2018
Customers save energy costs and get 60-80% energy independent

EUR/kWh 1
0,50
Prognosis
0,45

0,40 PV+storage is cheaper than socket price.

Customers get 60-80% independent.
0,35

0,30

0,25
PV-energy is cheaper than socket price.
Customers get 30-40% independent.
0,20

0,15

0,10

Electricity cost for PV Electricity costs for PV+Battery ² Electricity price for households (2.5-5 MWh/a)

1 Model calculation for rooftop systems, based on 802 kWh/kWp (Frankfurt/Main), 100% financing, 6% interest rate, 20 year term, 2% p.a. O&M costs
² based on 5,000 cycles, C2, 87% efficiency
Sources: Own calculation; System Prices: BSW 2016; Model Calculation: Deutsche Bank 2010; Electricity Prices 2007-2015: Eurostat 2016; Electricity Prices 2016-2020: own
estimate at 0.29ct/kWh.
© Germany Trade & Invest www.gtai.de 9
Support for Home storage: KfW incentive (2016)
Newly introduced in March 2016: End-customers can access attractive
financing plus a 25% grant on battery purchase from gov. owned KfW

• The promotion is valid for photovoltaic • The grant for the eradication of the KfW
systems with less than 30 kWp power, loan is initially 25% and decreases every
installed after Dec 2012 six months each mid and end of year by
• The maximum power output of the PV 3 percentage points until 2018:
system to the grid connection point must
be limited to 50 % of installed peak 01.03.2016 - 30.06.2016 25 %
capacity (the remaining 50% can be used
01.07.2016 - 31.12 2016 22 %
for storage)
• The battery storage system must come 01.01.2017 - 30.06.2017 19 %
with a time value replacement warranty
01.07.2017 - 31.12 2017 16 %
for a period of 10 years
• The professional and reliable 01.01.2018 - 30.06.2018 13 %
commissioning must be done by a
01.07.2018 - 31.12 2018 10 %
certified installer

Source: KfW 2016

© Germany Trade & Invest www.gtai.de 10
The German PV-storage system market outlook
More than 50,000 home storage systems per year in Germany by 2020

Estimated number of newly installed Home PV-battery systems in Germany

# of units
60000

50000

40000

30000

20000

10000

0
2015 2016 2017 2018 2019 2020
Number of new battery systems with new PV installations Number of new battery systems with retrofit installations

Note: assumptions: new annual PV installations 2015-2020: 1.4 GWp

Source: year 2015: Federal Network Agency, KfW Speichermonitoring, 2016; years 2016-2020: own calculation and estimate, 2016
© Germany Trade & Invest www.gtai.de 11
Agenda

1. Is there a boom?
2. Residential and commercial PV-battery systems
3. Grid-connected battery systems
4. Growth Potential
5. How Germany Trade & Invest supports you

© Germany Trade & Invest www.gtai.de 12

Large-scale batteries balancing the grid
Punctual overcapacities in electricity production through fluctuating
RES lead to very volatile electricity prices  Opportunities for storage

Electricity generation in Germany (8 February 2015) and response of electricity price

90 40 €
Solar

80
30 €
Wind
70
Electricity Generation in GW

60 20 €
Hydropower

50
10 €
Biomass
40

30 0€
Conventional1)
20
-10 €
10 Price in €/MWh
(EPEX spot intraday
continuous)
0 -20 €
00:00 02:00 04:00 06:00 08:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00

Source: Agora Energiewende 2015; EPEX Spot 2015;

1) Conventional contains brown coal, hard coal, gas, nuclear, pump storage
© Germany Trade & Invest www.gtai.de 13
The German Control Power Market
Interaction between primary, secondary and tertiary control power

Outage in a power Secondary control

Primary control power Tertiary control power
plant in Saxony-Anhalt power

© Germany Trade & Invest www.gtai.de 14

Primary and Secondary Control Power Market
Stable development of control power volumes

Needed power per week (in MW) Needed power per week (in MW)
Primary Power Control Secondary Power Control

6000
6000

5000 5000

4000 4000

2473 2500 2500 2500

2109
3000 Positive
3000

2000 2000

2418 2500 2500 2500 Negative

1000 1000 2149

663 783 795

592 592
0 0
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Source: regelleistung.net; IEK-STE 2013
Figure 1: For each year, the gap between the highest number and the average is Figure 2: For each year, the gap between the highest numbers and the average is
smaller than 5%. Includes positive and negative control power. smaller than 20%
© Germany Trade & Invest www.gtai.de 15
The German Primary Control Power Market
PCR price development and break even calculation for battery systems

Capacity price per week (€/MW)

2012 2013 2014 2015 Example calculation:
10000
Weekly average Weekly average Weekly average Weekly average
3,536 €/MW 3,659 €/MW
Mean specific capacity
2,757 €/MW 2,987€/MW
9000 price payment per year:
19,995
≈ 165,000 €/MW
8000
(52 x 3,170€/MW)
7000
• Interest rate: 5 %
6000
• Operation costs: 2 %/a
5000 from CAPEX
• Amortization period:
4000 10 a
• Energy/Power ratio: 1:1
3000

2000
Maximum CAPEX:
≈ 1,100 €/kWh
1000

0
02.01.2012 02.01.2013 02.01.2014 02.01.2015 02.01.2016

Source: regelleistung.net
© Germany Trade & Invest www.gtai.de 16
Agenda

1. Is there a boom?
2. Residential and commercial PV-battery systems
3. Grid-connected battery systems
4. Growth Potential
5. How Germany Trade & Invest supports you

© Germany Trade & Invest www.gtai.de 17

German PV potential without storage: 100 GWp
14% total German electricity demand could be met by direct PV-
consumption without storage ( 76 TWh/a = 80-100 GWp PV):

TWh/a 0 20 40 60 80 100
Residential: 29% Family Homes 37,4
Total: 140 TWh
Apartments 3,6
PV Potential: 41 TWh

Commercial: 18% Retail 7,8

Total: 133 TWh
PV Potential: 24 TWh Office buildings 6,2
Agricultural Potential own-
Public buildings consumption with PV
Hotels,restaurants,etc Total electricity demand
in the sector
Construction
Producing Companies
Other 3,4

Industrial: 4% Mechanical engineering 2,2

Total: 251 TWh
Food/beverages 1,8
PV Potential: 10 TWh
Automotive 1,3
Plastics
Energy intensive
Other 4,8
Source: UBS 2013

© Germany Trade & Invest www.gtai.de 18

German PV potential with storage: >400 GWp
The current building structure in Germany would allow around 200
GWp of installed capacity on PV suitable rooftops and facades

Usable area for the installation of PV systems in Germany (km²)

km² 0 200 400 600 800 1000 1200 1400

Rooftops

Sealed area

Along railroads
Total: 2845 km²
(equals around 400 GWp)
Facade

Along highways

Source: Fraunhofer IWES 2013

© Germany Trade & Invest www.gtai.de 19
Gigantic PV-battery retrofit potential
More than 1 million existing PV systems could add storage by 2033:

PV capacity Installed PV-Capacity exiting 20 Feed-in tariff period [MWp]

Year going out of
FIT [MWp]
2021 76 9000
2022 110 8000
2023 110 7000
2024 139 6000

2025 670 5000

2026 951 4000

2027 843 3000

2028 1,271 2000

1000
2029 1,950
0
2030 3,794
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
2031 7,406

2032 7,500

2033 7,643
32 GWp with 1.4 million PV Systems, thereof around 1 m households

Source: BMU 2014

© Germany Trade & Invest www.gtai.de 20

Agenda

1. Is there a boom?
2. Residential and commercial PV-battery systems
3. Grid-connected battery systems
4. Growth Potential
5. How Germany Trade & Invest supports you

© Germany Trade & Invest www.gtai.de 21

Germany Trade & Invest
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Germany Trade & Invest
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Decision Implementation
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The Role of Germany Trade & Invest
Close support throughout the entire investment process

Example: Milestones of a typical manufacturing project

Months (est.): 0 2 4 6 8 T

European Re-evaluation
In-depth
Site location Detailed site Initial of site Site Decision.
site visit
Selection analysis evaluation site visits analysis
(LOIs)
MoU
(long list) (short list)

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Incentives incentives incentives
comparison calculation application incentives
assessment (LOI)

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Financial
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agreement
structure partners (Term Sheet)

Discussion Utility prices

LOIs for
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utility supply
requirements comparison

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Case Study: Enpower Energy from China
“It is Germany’s passion for renewable energy and storage that is most
important to us.” (Xin Zhang, Managing Director)

“Why did we choose Germany? I could give you 100 reasons! Germany has the
best technologies and leading renewables policy. Germany is centrally located in
Europe and is economically a leader in Europe. But it’s its passion for renewable
energy and storage that is most important for us. The passion!”

“Germany Trade & Invest is very active. I have met GTAI in China in Shenzhen,
Beijing, Shanghai, Germany. They know all the important forums and trade fairs
and find the right investors. They give lots of advice. We are very happy to have
found GTAI.”

Project data Company profile

• Investment: EUR 3 million • Founded 1994 in China
• Production of Battery Management Systems and • Industry: Energy, Production of Battery Management
Integration Battery Systems. Sytems and Integration Battery Systems.
• New employees: 10 by 2017 • Target group: B2B
• First contact with Germany Trade & Invest: Battery • Products: Battery Systems
Conference in April 2014 in Shenzhen, China • Office in Neuenstadt , Germany
• German openings: Neuenstadt , Baden-Württemberg

© Germany Trade & Invest www.gtai.de 25

Case Study: Skeleton Technologies from Estonia
“The highly interconnected R&D infrastructure and the pool of trained
professionals are the ideal basis for our facility” (Taavi Madiberk, CEO)

Company profile Project data

• Founded 2009 in Estonia • Investment: EUR 10 million
• Industry: Energy Storage • Production of ultra-caps
• Target group: B2B • USP: Superior energy and power density
• Products: ultra-caps and tailor-made storage modules (5.4V to 128V) • New employees: 110 by the end of 2015
• R&D location in Tartu, Estonia • First contact with Germany Trade & Invest: Ecosummit 2012
• Manufacturing in Dresden, Germany • German openings: Berlin (HQ) and Dresden (Production)

Milestones Products

Sep 2009 1 Company formation

Jun 2012 2 Introduction of new SkelCap series

ultracapacitor family ranging from 2.47
to 12.53 kW
Apr 2013 3 Raised €2,2 million in Round A financing

2014 4 Start of production in Germany

© Germany Trade & Invest www.gtai.de 26

Contact Us

Energy Storage – Photovoltaics – Smart Home

Anne Bräutigam Tobias Rothacher

Senior Manager Senior Manager
T +49 (0)30 200 099-223 T +49 (0)30 200 099-225
anne.brautigam@gtai.com tobias.rothacher@gtai.com
Friedrichstr. 60 Friedrichstr. 60
10117 Berlin 10117 Berlin

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opportunities, strengthening Germany as a business location. With more than 50 offices in Germany and abroad and its network of partners throughout the world,
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All market data provided is based on the most current market information available at the time of publication.
Germany
© GermanyTrade
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Invest accepts no liability for the actuality, accuracy, or completeness of the information provided. www.gtai.de 27