German Green Grid Price Tag Increases to $111 Billion

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The projected cost of building Germany’s green power “autobahn” is steadily climbing, setting up electricity consumers with an ever increasing bill.

The government is building four high-voltage power lines linking wind and solar parks in the north with industrial centers in the south. Severe delays have seen spending soar more almost fivefold to 95 billion euros ($111 billion), according to the latest plan approved by the Bnetza power regulator.

Built by four companies -- Dutch-owned Tennet TSO GmbH, Amprion GmbH, TransnetBW GmbH and 50Hertz Transmission GmbH -- progress in laying cables has been delayed by scores of local challenges over environmental issues. A fifth of the project had been completed by the end of last year.

German Green Grid Price Tag Increases to $111 Billion

“The project is looking like another financial black hole -- like Berlin’s airport,” said Ralph Lenkert, a lawmaker for the opposition Left Party who sits on Bnetza’s parliamentary advisory board. Lenkert called for a moratorium on the project’s construction.

The “green supergrid” builders are guaranteed by law a yield of 6.9% on their investments, payable in a compulsory component in power bills. Those specific costs may rise by 4 euro cents per kilowatt-hour in grid construction, said Lenkert.

German retail electricity prices are already the highest in Europe and may be further increased by moves to upgrade regional power networks.

EON SE, Germany’s biggest regional grid operator, said on Oct. 29 that upgrading regional networks to accommodate green power may cost 110 billion euros by 2050.

“Clearly it’s time to take a rain check on the costs of this monumental enterprise,” Lenkert said.

©2020 Bloomberg L.P.

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