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Germany Unveils Plan for State-Aid Efficient Low-Carbon Energy Transition

 |  January 18, 2024

Germany’s federal energy regulator, the Bundesnetzagentur, has announced a strategic plan aimed at streamlining the allocation of funds required for the transition to low-carbon energy systems by power and gas grid operators. The initiative comes as part of the country’s commitment to accelerating its energy transition efforts.

In an online press conference held on Thursday, Klaus Mueller, the president of Bundesnetzagentur, emphasized the increasing momentum of the energy transition. “The energy transition is gathering pace,” stated Mueller, highlighting the urgency of adapting power and gas networks to meet the demands of a rapidly evolving energy landscape.

Mueller outlined the key elements of the strategy paper that will serve as the foundation for a two-year planning process. “Power networks must be extended and digitized,” he asserted, underlining the essential upgrades needed to accommodate the shift towards cleaner energy sources. Additionally, Mueller proposed the partial conversion of gas networks to transport green hydrogen, with an acknowledgment that certain segments might eventually need to be closed.

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Crucially, the regulator aims to involve operators in discussions on meeting the financial needs of institutional investors who are crucial for funding the infrastructure conversion. The goal is to strike a balance that supports the transition without placing an undue financial burden on consumers through a fee-based revenue system.

Barbie Haller, the vice president of Bundesnetzagentur, provided insights into the timeline for implementing the new scheme. “The new scheme is expected to be in place in early 2026,” she announced, indicating a comprehensive planning and consultation process over the next two years.

Haller also addressed the substantial investment required for the transition, estimating a low three-digit billion euro sum for local electricity grids and a middle three-digit billion euro sum for cross-country electricity transmission grids up to 2030. This underscores the magnitude of the financial commitment necessary to modernize and adapt Germany’s energy infrastructure to meet the challenges of a low-carbon future.

Source: Reuters