'No speed limits' - German energy sector calls for simpler regulation
Germany's energy industry is calling for simpler regulation to get infrastructure projects off the ground, speakers said at the annual congress of utility association BDEW June 5-6 in Berlin.
Sector stakeholders noted progress such as record solar capacity deployment, faster permitting of high-voltage projects as well as framework decisions for a hydrogen pipeline grid, but still regulation was slowing down development.
"When it comes to the energy transition we can't afford any speed limits," said Manon van Beek, CEO of Dutch-German grid operator Tennet.
The company foresees the need to invest Eur160 billion in the Netherlands and Germany between 2024 and 2033.
Returning to overhead cables for the next few high-voltage projects into the 2030s could save Eur20 billion versus costly undergrounding of cables, as currently required, the Tennet CEO said.
Tennet in 2023 started construction on the Eur10 billion SuedLink, Germany's single biggest energy transition infrastructure project, set to ease North-South grid bottlenecks from 2028.
ET funding proposal
Germany needs to invest Eur721 billion in energy transition projects to meet 2030 climate targets, the BDEW said in a joint study with municipal utility association VKU and consultancy Deloitte.
The sector is proposing an Energy Transition Fund starting with Eur30 billion to Eur50 billion.
"We need a bureaucracy diet," BDEW managing director Kerstin Andreas said, noting over 15,000 norms and regulations specific to the energy sector.
"Feasibility must take center stage and complexity must be reduced," she said, opening the congress with the slogan "make it easy together."
The association, represents over 2,000 German energy sector companies, used the event to elect EWE's CEO Stefan Dohler as its new president.
"We want to make the energy transition a success. At the same time, security of supply must be guaranteed at all times -- and for this we will need backup capacities in the form of hydrogen-capable power plants, combined heat and power plants, and energy storage facilities," Dohler said.
Grid expansion and the transition in the transport and heating sector are the key focus for the coming years.
"In order to master this extremely demanding transformation process, we need stable framework conditions, a reduction in bureaucracy, and an acceleration of planning and approval processes," the BDEW president said.
Required investment to meet 2030 climate targets
Eur billions | |
Generation (renewables, H2-ready gas turbines) | 353 |
Transmission grid, pipelines (power, gas) | 141 |
Distribution grids (power, gas) | 140 |
District heating | 32 |
Green gases | 23 |
Energy storage | 17 |
Hydrogen core grid | 15 |
Source: BDEW energy transition monitor (June 2024)
Market distortions
Elsewhere, faster expansion of solar and wind and slower growth in new energy demand is leading to a sharp rise in hourly negative prices during times of oversupply.
The CEO of developer BayWa r.e., Matthias Taft, noted "distortions in the power market" and said more flexibility was needed.
"Large batteries don't need subsidies but a clear framework for market integration," Taft said.
According to analysts at S&P Global Commodity Insights, the number of negative hourly prices across 10 Western European markets so far this year has quadrupled to over 1,200 hours compared to the same period in 2023, with Iberia a key driver.
Some 30 GW of battery storage will be online by the end of 2024, up tenfold since 2019, according to Commodity Insights.