Dena: Cost Estimate for German Energy Infrastructure Transformation

The German Energy Agency said it considered a nuclear phase-out until 2020/2025 feasible and put a (first) price tag on the government’s plans for an accelerated transformation of the German energy infrastructure annouced last week.

According to dena’s estimates, the expansion of renewable energies, the grids and the construction of new modern fossil power plants would lead to electricity prices going up by EUR 4 to 5 Ct/kwh. For private households this would mean an increase of the electricity bill of roughly 20%. However, these costs for the nuclear-phase out were justified and would pay off in the future, dena said. Acceptance within the German population could only be reached with an open discussion.

Regarding renewable energies, dena calculated costs of approximately EUR 2 Ct/kwh for an increase in the share of renewables from 17% to 38% in 2020. Dena assumed that in 2020 renewable energy capacity will amount to 110,000 MW, with wind power providing 47,000 MW (14,000 offshore), and photovoltaics providing 50,000 MW.

With respect to the networks, dena believes that the necessary expansion of the transmission and distribution grids will lead to additional costs of EUR 1 Ct/kwh. This includes costs for smart grids and smart meters.

Regarding the modernisation of fossil power plants, dena calculates with an additional EUR 1.5 Ct/kwh, calling this assumption “conservative”. Until 2020 dena sees the need for 15 to 20 new natural gas-fired or efficient coal-fired power plants.

Like other recent cost estimates for the upcoming accelerated energy transformation, dena’s calculation can only be a first approximation. The actual costs will only become clear when more details of the government’s new energy strategy emerge. With the Federal Republic of Germany being a shareholder of dena, its estimates do, however, carry political weight.

Source: dena

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