News
30 Oct 2020, 10:18
Alex Dziadosz

Germany’s power grids need 110 billion euros of investment by 2050, operator says

Clean Energy Wire

Some 110 billion euros will need to be invested in expanding and updating Germany’s electricity network by 2050 in order to meet the demands of the energy transition, according to a study commissioned by electricity supplier E.ON. Some 32 billion euros of that amount would be needed by 2030, it added in a statement. More solar and wind systems must be integrated into the network, and charging infrastructure for e-mobility, as well as heat pumps and electricity storage systems will need to be expanded. Without these investments, “follow-up costs” of 4.2 billion euros a year could be incurred because of overloaded networks that are not able to absorb renewable-generated electricity. “Politics and regulation must now set the course for growth in the networks. If Germany wants to achieve its climate protection goals and make the energy transition a success, electricity distribution networks must be expanded and modernized,” E.ON said in a statement. It added: “If investments in electricity grids are not made consistently and on a long-term basis today, they will no longer be able to handle the electricity generated from renewable energies.”

The study, carried out by RWTH Aachen University and Frontier Economics on E.ON’s behalf, said that there was low risk of over-investing today, because if the grid was developed more than necessary only a fraction of the additional costs incurred by under-investment would occur. E.ON, the largest operator of electricity distribution networks in Germany, said that it had connected about 77 gigawatts of renewable energy capacity to its networks in Germany and added that it would invest about 6.6 billion euros in energy networks in Germany over the next three years. Last year, Germany passed a "grid expansion acceleration act" to make sure that necessary lines are completed by 2025 so as to reduce costly stabilisation procedures due to grid blockages.

Grid expansion has faced protests from local residents and state governments, who have launched legal challenges to the plans in some cases. The government plans to source 65 percent of power demand from renewables by 2030, which will require a more flexible electricity grid to cope with fluctuating production and demand.

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