Germany faces multibillion-Euro grid bill

12 December 2012

The massive expansion of Germany's electricity networks to cope with the country's transition away from nuclear to a high share of renewable energy will require investments of up to €42.5 billion ($55.4 billion) by 2030, according to a newly released study.

Germany embarked on a path to low-carbon generation with high reliance on renewable energy following political decisions to phase out nuclear power, on which it had hitherto relied for around a quarter of its electricity, in the wake of the 2011 Fukushima nuclear accident in Japan. However, the country's existing grid is not up to the task of accepting a large share of electricity from solar and wind plants. According to the report by the German Energy Agency (Deutsche Energie-Agentur GmbH, or Dena), the country can expect to invest at least €27.5 billion ($35.8 billion) and up to as much as €42.5 billion ($55.4 billion) in the massive expansion and rebuilding program that its electricity distribution network will need.

The overall extent of expansion and investment needed over the next two decades will depend on how high the share of renewable energy generation eventually becomes, according to the Dena Distribution Study (dena-Verteilnetzstudie). Current planned expansion targets will necessitate an expansion of 135,000 km by 2030. More rapid development of wind and solar power would necessitate a network expansion of 193,000 km. In excess of 20,000 km of network will also need to be replaced.

New power lines and transformers will be required at all distribution levels, and existing high voltage overhead transmission lines will need to be replaced. "The German distribution must be significantly expanded and modernized ... The expansion of renewables must be synchronized with the urgent development of infrastructure, "said Dena CEO Stephan Kohler. He called for reforms to the regulatory framework to help network operators realise the returns needed as incentives for the necessary investments.

Technical solutions such as innovative equipment to optimise the use of infrastructure, including variable distribution transformers to allow better usage of the allowable voltage band, could help to reduce the degree of network expansion needed. These options would require further study, the report noted.

Dena describes itself as a centre of expertise for energy efficiency, renewable energy sources and intelligent energy systems. Although an independent company, it is 50%-owned by federal interests and 50% by German financial institutions. It has been partnered in the distribution project by German generation and grid companies including EnBW, EOn and Vattenfall.

Researched and written
by World Nuclear News

Filed under: Energy policy, Germany