Germany’s Energy Transformation Relies on Sluggish Grid Action Plan

Germany’s ambitious energy transformation has the world’s attention but role-players will need to put plans in to action in order to meet fast-approaching energy targets. EU Energy Commissioner Guenther Oettinger recommends that Germany follows Spain’s example and forms one power network operator.
Published: Thu 25 Oct 2012

What happened  

Germany’s grid expansion plans will be realized sooner if its power grids are combined, says EU Energy Commissioner Guenther Oettinger.

Background                                        

According to Oettinger, the amalgamation may not reduce electricity tariffs for consumers but it will make the expansion “faster and more homogenous.”

Germany’s power grid is shared by four network operators:

  • 50Hertz, owned by Belgian firm Elia and Australian fund IFM
  • E.ON's former high voltage grid unit TenneT
  • RWE's former unit Amprion
  • EnBW's grid unit TransnetBW

Oettinger points to Spain’s power grid as a good example for Germany to follow. Spain has only one grid operator, Red Electrica, a fifth of which is owned by state-owned Sociedad Estatal de Participaciones Industriales (SEPI).

Germany’s government recently decided to turn its back on nuclear power by 2022. This was in response to Japan’s Fukushima Daiichi nuclear disaster in March 2011. The decision saw eight out of the 17 reactors close in 2011.This decision has left the country with an energy shortfall, one that its energy industry is scrambling to rectify. Renewable energy features high on its list of solutions. Germany’s government is working towards slashing its greenhouse-gas emissions to 40% by 2020 and 80% by 2050. Some analysts say that these goals will be challenging without nuclear power.

In order to support the increasing renewable energy output, the existing grid must be expanded and upgraded. Germany needs 3,800km (2,361 miles) of new electrical lines to realize the government’s plan to phase-out nuclear power by 2022. The expansion plan is going to cost approximately US$26bn (€20bn) over the next 10 years. Unfortunately, progress on this front has been slow, writes Reuters. The construction of power lines, needed to transmit fast-growing wind and solar energy generation to consumption centers, has been sluggish. A 2009 plan to build 2,000km of high voltage power lines has thus far resulted in only 200 km being built due to bureaucratic hurdles. According to grid companies, Germany needs 2,100km of new direct current lines and 1,700km of alternating current lines, while 4,000km of existing power lines needs an upgrade.

Analysts say that the energy transition is unrealistic because of the slow-moving grid expansion and the threat of rising electrical costs.

The Economist quotes Mark Lewis, an analyst at Deutsche Bank, in support of Germany’s energy transformation, says that Germany has “the means and will to achieve a staggering transformation of the energy infrastructure.”

Last Word

Germany’s power grid expansion plans need to be put in to action if the country is to meet its power supply demand in time. Without the power line expansion and upgrade to support new renewable energy generation, the country will have to turn back to existing nuclear and thermal power generation, dashing its 2020 clean energy targets.

Sources                                                                                                                                                                                             

Cleantechnica-Germany to Expand Power Grid –Great for Rebewables?

Financial Times-Germany: Lines of contention

Gas to Power Journal-Germany needs over 2,000MW of winter reserve-regulator

Reuters Africa-Combining operators would speed German grid expansion-Oettinger

Spiegel-German Power Grid Expansion to Cost Billions

Spiegel-Grid Instability Has Industry Scrambling for Solutions

The Economist-Germany’s energy transformation