Germany’s Power Grid Overhaul to Cost Billions More Than Expected

(Bloomberg) -- Germany’s plan for new power cable “autobahns” to take wind and solar energy from the north to the south of the country is set to cost billions more than envisaged.

The grid upgrade will cost as much as 52 billion euros ($59 billion), 53 percent more than was budgeted for in 2014, the companies building the north-south high-voltage links said in a joint statement. Two more of the super cables are needed on top of the three already planned in order to meet the government’s new green power targets, the builders said.

The revised blueprint spells bigger electricity bills for a nation that already shares with Denmark the highest retail power costs in the European Union. Grid upgrade expenses are tacked on to consumers’ bills.

“Overhauling the national grid to take a new green power target will definitely cost power users more -- how much we can’t say,” Peter Franke, vice president of Germany’s energy regulator Bnetza, said in an interview in Essen. “We’re trying to speed up construction of the grid and don’t yet know if we’ll need those two extra lines in their full extent.”

In 2018, Merkel’s new coalition government bumped up the share of clean power in the nation’s energy mix to 65 percent by 2030 from 55 percent.

Dutch government-owned Tennet Holding BV is building the Suedlink cable, the largest and most expensive stretch of the new grid. Amprion GmbH is focusing on cabling transmission along Germany’s western border, 50Hertz GmbH is responsible for the eastern region and Transnet BW AG for the southwest.

The revised plan also raises the possibility of further delays in the project.

Just 150 kilometers (93 miles) of the super power highway was constructed by 2018. Another 5,700 kilometers needs to be added by 2025, the targeted completion date of the current, three-line plan, according to the Economy and Energy Ministry’s website.

Peter Altmaier, the Economy and Energy Minister, said last year that progress achieved in enhancing the grid was a “catastrophe.”

To contact the reporter on this story: Brian Parkin in Berlin at bparkin@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Andrew Reierson, Lars Paulsson

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