Grid expansion cld cost 50 bln euros - operators / Deutsche drops coal
The cost of expanding Germany’s power transmission grid onshore and in the Baltic and North Seas to adapt to the future power system brought on by the Energiewende could be between 50-52 billion euros until 2030, the country’s four transmission system operators (TSO) said in a press release. The TSOs published first drafts of their bi-annual on- and offshore grid development plans with preliminary calculations for the needed investments. The operators provide plans based on four scenarios, each with different assumptions on how strong and fast Germany’s energy landscape changes with the Energiewende. About 7,600 – 8,500 kilometres (km) of existing transmission lines will have to be modified and strengthened, depending on the scenario. An additional 3,800 km new transmission line routes are needed onshore and 2,277 km offshore, according to the draft plans. Overall, TSOs expect a significant increase in power produced from offshore wind and solar PV, while onshore wind development will be slowed by changes made with the reform of the Renewable Energy Act (EEG) in 2016. The drafts are now open for public consultation. The final development plans will ultimately form the basis for federal legislation.
Find out more about resistance against major power lines in the article "Protests against transmission lines grow".
Find more information on Germany’s electricity network in the CLEW factsheet Set-up and challenges of Germany's power grid.
Deutsche Bank / urgewald
Deutsche Bank will no longer grant new financing for thermal coal mining or new coal-fired power plants, Germany’s largest bank said in a press release. The bank will also “reduce its existing exposure to the thermal coal mining sector,” it said. Deutsche Bank cited its commitment to the Paris Agreement’s climate protection measures as the reason for its divestment decision. In a letter to Oliver Krischer, vice-chairman of the Greens in the German parliament, the bank said it was taking part in efforts to “achieve the paradigm shift towards a low-carbon economy and a climate-friendly development model.” It will strengthen its support for renewable energy projects and reduce its stake in the coal sector by 20 percent over the next three years. Krischer welcomed the move but said it could be “only the beginning” of a larger divestment process.
Heffa Schücking, director of German campaign organisation urgewald, said the bank’s announcement was a “long overdue decision” that only addressed “a small part of the problem.” She explained that direct project financing accounted for only 2 percent of banks’ financial flows to the global coal industry. “98 percent of the problem remains as the new guideline does not stop Deutsche Bank from providing corporate loans and investment banking services to companies with aggressive new build plans for coal-fired infrastructure,” Schüking said.
For background, see the CLEW factsheet When will Germany finally ditch coal?
This year’s G20 summit in Germany will be “a test for governments, civil society, and companies to stick to” the goals of the Paris Agreement, France’s former climate change ambassador Laurence Tubiana said, Ed King writes on Climate Home. While US President Donald Trump’s sceptical stance towards climate protection troubled many environmentalists, Angela Merkel’s presumed advocacy for curbing global greenhouse gas emissions at the G20 “offers some relief,” King writes. Chancellor Merkel “is a leader” when it comes to UN climate talks, according to Tubiana. “The question is how far Merkel wants to push it, both at the G20 and in other forums,” King writes. He adds sources in the EU signalled that Germany and China recently discussed taking over the Major Economies Forum, “a group of 17 nations founded by the US in 2009 to talk climate.”
Read the article in English here.
For background, read the CLEW article IEA director calls on Germany to lead on climate during G20 presidency and the CLEW dossier The energy transition and climate change.
Frankfurter Allgemeine Zeitung
Wintershall, Germany’s largest crude oil and natural gas producer, is determined to take part in the Euro-Russian gas pipeline project Nord Stream 2, Frankfurter Allgemeine Zeitung (FAZ) reports. BASF subsidiary Wintershall said that, like its partners - Russian gas giant Gazprom and European companies Uniper, OMV, Shell and Engie - it believed the project “is of central importance to the European energy concept,“ FAZ writes. A participation model in which Gazprom would have held 50 percent of the 10 billion euro project’s shares and the other partners 10 percent each was scrapped last August as Poland’s competition authority singalled it would not issue a license.
Poland and other eastern European states fear that Nord Stream 2 will further enable Russia to circumvent their countries for selling gas to western Europe. Construction is due to start in the second half of 2017, FAZ says.
For background, read the CLEW dossier The Energiewende and its implications for international security and the CLEW factsheet Germany’s dependence on imported fossil fuels.
A wave of mergers and acquisitions in the energy market does not bode well for the future of German utility E.ON as an independent company, Jürgen Flauger writes in Handelsblatt. “E.ON has been low priced for some time now,” Flauger writes, explaining that the company is currently valued at less than 14 billion euros – compared to the 105 billion euros it was worth in 2008. E.ON’s involvement for covering the costs of disposing of Germany’s nuclear waste had so far been an enormous liability in the company’s accounts that prevented a hostile takeover, he writes. “But E.ON is going to lose this poison pill,” as the group, along with other energy companies in Germany, is going to transfer responsibility for the nuclear clean-up to a public fund, Flauger explains. Given that the company’s operative business is going well, its low price makes a hostile takeover of E.ON “more likely than ever,” he writes.
Read the article in German here (behind paywall).
For background, see the CLEW dossier Utilities and the energy transition and the CLEW factsheet Securing utility payments for the nuclear clean-up.
The Energiewende’s costs cannot be entirely levied on power customers if Germany’s energy transition is going to succeed, Robert Busch, managing director of the Association of Energy Market Innovators (BNE), writes in a guest commentary for Handelsblatt. The main reasons for rising power prices in Germany are the increased Renewable Energy Act (EEG) surcharge and higher grid fees. These, together with other taxes, pushed the power price’s fixed proportion to 75 percent, Busch explains. “The idea to finance the Energiewende via the power price leads into a cul-de-sac,” he writes. Fulfilling the Paris Agreement’s climate targets means the renewables’ share in heating has to grow significantly, but further surcharges could prevent customers from turning away from fossil heating fuels and therefore damage climate protection, Busch explains. “A way out of this dilemma could be to expand the EEG-surcharge to final energy consumption in the heating sector,” which would allow customers to save money if they invest in green heating technology, he writes.
The installed capacity of pv power plants in Germany grew by 450 MW in December, almost a third of the 2016 total of roughly 1,500 MW, Sandra Enkhardt writes in pv magazine. According to the Federal Network Agency (BNetzA), 14 new solar power parks were constructed in Germany last year, most of which were a result of auctions, Enkhardt explains.
Read the article in German here.
For background, see the CLEW factsheet How can Germany keep the lights on in a renewable energy future?
Association of energy intensive businesses (VIK)
Germany’s Association of energy-intensive businesses (VIK) is among the founders of a network for energy efficiency, dubbed KEEN, the association has said in a press release. Six companies from the mining, electrical engineering, food industry and energy services sectors are part of the network, which aims at strengthening mutual learning processes for the sake of finding tailor-made options for lowering the companies’ energy costs, according to the VIK. Chemical company K+S will act as KEEN’s central member, it added.
Read the press release in German here.
For background, see the CLEW dossier The Energiewende and efficiency.