Power Grid

21 Mar 2024

Germany Looks at Special Account for $488 Billion Power Grid Expansion

21 Mar 2024  by reuters   

An electrical substation with high-voltage power is seen near Weselitz, Germany November 18, 2022. REUTERS/Lisi Niesner/File Photo Purchase Licensing Rights
Germany is looking into setting up a special government account to spread the costs of expanding its electricity network more evenly across generations, Economy Minister Robert Habeck was quoted as saying on Wednesday.

A planned phase out of fossil fuels and the ramp up of decentralized solar and wind power means Germany's electricity transmission and distribution network needs a huge expansion.

The costs are estimated at around 450 billion euros ($488 billion) by 2045, Germany's Federal Network agency says, which consumers will have to bear through their energy bills.

"The network needs to be expanded now, but if we pass all the costs on to the customers immediately, it would be very expensive for them," Habeck told Die Zeit newspaper.

The Economy Ministry is examining introducing a so-called amortization account to cover the expansion costs over a long period to avoid passing the full amount to current consumers.

"I want us to protect private households and companies from a sharp increase in network fees," Habeck said, adding that Berlin wants to find a solution next year.

Berlin has been examining various funding mechanism to cover the costs of building a future hydrogen network, Habeck said, with plans to have the costs paid back by 2055.


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