Germany's federal energy regulator, Bundesnetzagentur, revealed a strategic plan on Thursday aimed at streamlining the allocation of funds required by power and gas grid operators as they transition to low-carbon energy systems. Klaus Mueller, the agency's president, emphasized the acceleration of the energy transition during an online press conference, highlighting the need to expand and digitize power networks while exploring the possibility of integrating green hydrogen into gas networks.
The regulator's two-year planning process, based on a comprehensive strategy paper, seeks to consult with operators to meet the financial requirements of institutional investors supporting infrastructure conversion. The goal is to strike a balance between securing necessary funding and avoiding undue financial burdens on consumers within a fee-based revenue system. Barbie Haller, Vice President of Bundesnetzagentur, indicated that the new scheme is anticipated to be implemented in early 2026.
The estimated investment costs for the transition are substantial, with a projected low three-digit billion euro sum allocated for local electricity grids and a middle three-digit billion euro sum for cross-country electricity transmission grids up to 2030. However, costs associated with gas grids remain uncertain at this stage.
Grid fees, a significant component of German energy bills, have faced scrutiny, particularly since the surge in energy prices following Russia's invasion of Ukraine in February 2022. The regulator's strategy paper proposes ideas for simplifying and expediting procedures in an industry composed of numerous national and local operating companies.
Prominent power grid companies, including E.ON (EONGn.DE) and EnBW (EBKG.DE), have expressed the need for increased funding to stay competitive while integrating more wind and solar power production plants into the grids. Meanwhile, gas grid companies, such as Gascade, Ontras, Open Grid Europe, and Thyssengas, are navigating the long-term shift to hydrogen or the phased closure of parts of their networks. The regulator's strategic plan aims to address these complexities and foster a more efficient and sustainable energy transition.
