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TenneT Unable to Complete German Offshore Transmission Project Under Current Regulations, Requests Extension

Maybe transmission operator TenneT should have thought twice about acquiring the northern German high-voltage grid from E.ON and accepting responsibility to build underwater links to offshore wind farms in the North Sea. The Dutch-German company has taken on a huge project that it now says it can't manage as planned.

The company has informed the German government that without major regulatory changes and financial support, it will be unable to meet the timeline of the country's offshore program. In a letter, TenneT managing director Martin Fuchs wrote that the company is unable to build more connections under current conditions. He pointed to a lack of sufficient "financial, human and material resources of all companies" participating in the program to forge ahead as planned.

Under the current agreement, TenneT must connect a completed wind park within 30 months. The company, which acknowledges its legal responsibility to build the lines, has asked to extend that period to 50 months.

Money is another issue — and a big one. In his letter, Fuchs noted that TenneT and its subcontractors have struggled to raise capital due to the financial market crisis, which has seen banks narrow their lending to avoid risks.

The existing contract requires TenneT to bear the full cost of building the links and then be compensated over a period of several decades by German energy users. The company seeks substantial changes that, among other things, would see it receive higher and faster compensation and would also spread the financial burden upon more shoulders. 

In response to the letter, Green Party parliamentarian Ingrid Nestle has said if TenneT can't do the job of connecting new wind farms, then the government should open up connection projects to the nation's offshore wind parks to other public tenders.

Wind power is set to play a big role in Germany's renewable energy mix, following its plans to phase out nuclear energy. Much of that power is to come from turbines located in waters off Germany's northern coastline. The goal is for 15 percent of the country's total electricity generation to come from offshore wind parks by 2030. That means a mammoth leap in offshore wind's input into the national grid from its mere 200 megawatts at the end of June.

Overall, the build-out of high-voltage power grids is proving to be a difficult challenge in Germany. The government has estimated that up to 3,600 kilometers of new lines are need and so far only 90 kilometers have been built. One of the unexpected problems has been a slew of "not-in-my-backyard" lawsuits against planned new "energy autobahns."

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