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Germans Push for More Renewable Energy; Offshore Wind To Benefit

Germany's federal government has hatched a plan to accelerate the expansion of the country's energy grid to transport more renewable energy, particularly from offshore wind farms, after Japan's nuclear disaster alerted voters in the Europe's largest electricity market of the pressing need for non-nuclear power.

Under the plan, the Economics Ministry would use its fast-track powers to expedite the approval process for building transmission routes, among other planned measures. To date, one of the main obstacles of upgrading Germany’s network to carry energy generated by solar and wind has been the country’s patchwork approval process.

Currently, the responsibility is shared between states and local communities. This arrangement has caused delays in the past, mostly by residents who oppose high-voltage transmission lines running above or below their property and who have filed lawsuits.

After a recent meeting of EU ministers in Brussels, German Economics Minister said the goal is to establish a system of uniform rules and, above all,” shorten the approval process.”

The German Energy Agency has calculated that more 4,000 kilometers of new high-voltage cable will be needed to transport energy from wind farms along Germany’s northern coastlines across the country. Estimated costs range from nearly €10 billion ($14 billion) for running cable over pylons and nearly three times as much if they have to be buried underground.

The German energy network is nearly 1.8 million kilometers long, with the general high-voltage transportation network accounting for more than 35,700 kilometers.

The scale of the challenge, according to the report, “is comparable with the infrastructure needs after unification” when Germany embarked on a massive program to rebuild crumbling roads, railways, telecommunication networks and energy grids in the eastern part of the country.

The need for a bigger and better national grid has been known for some time. But now the German government is being pressured to act, with a growing number of voters calling for an end to nuclear energy – and with elections around the corner.

In addition to the approval process, the plan includes several others measures. Among them: a financing package, including venture capital from Germany’s state development bank KFW; and shorter but therefore higher feed-in-tariffs for the energy fed into the power grid from wind farms.  

The plan envisions raising the tariffs paid to the operators of offshore wind farms from €0.15 to €0.18 per kilowatt-hour. That is roughly three times the going rate for energy on spot markets. In return for the higher rate, the subsidy’s duration would be reduced from 14 to nine years.

The government also hopes to resolve a Catch-22 situation that has added to delays in expanding Germany’s energy grid. Although operators are required by law to connect wind farms, they often won’t guarantee a connection until the wind farms have secured financing. And the banks, for their part, typically demand to see a connection before they give the green light to financing.

Environmental Minister Norbert Roettgen has also thrown his support behind the plan, saying that a fast expansion of the network “is a central prerequisite for the expansion of renewable energies.”

The German Wind Energy Association (BWE) expects a push to expand wind power in the country would see the number of people employed in the sector grow from 6,500 today to 13,350 by 2020.

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