Tennet Warns Chancellery and Federal Ministries of Difficulties for Offshore Grid Connection

In a letter to the Chancellery, the Federal Ministry of Economics and Technology (BMWi) and the Federal Ministry for the Environment (BMU), TenneT TSO GmbH informed that offshore grid connections in the North Sea are no longer desirable and possible at the current rate and in the current form.  

Tennet explained its move with a lack of personnel, material and financial resources of all parties involved, i.e. suppliers and Tennet.

The company was in the process of connecting nine wind farms in the North Sea and would carry on with these projects as planned. However, awarding further direct current connection projects was not possible under the existing framework conditions and at the current rate and form. The general conditions had to be substantially amended for connecting further wind farms to the grid. Besides, the expansion of onshore power lines had to keep up pace with the offshore expansion. This required fundamental changes of the legal framework. Hence, Tennet appealed to the government to start a broad discussion about the necessary amendments to the legal framework and the processes of connection with all offshore partners and the Federal Network Agency (the German grid regulator).

Offshore wind energy is considered to be one of the important pillars of German energy supply in the efforts to reach the 2050 renewable energy supply target of at least 80% by 2050. This target is laid down in the the recently amended Section 1 para. 2 Renewable Energy Sources Act (EEG) that becomes effective 1 January 2012. Following the nuclear disaster in Fukushima Japan in March, the German government reversed its energy policy, retracting a nuclear power extension passed only in October 2010 and deciding on a staggered nuclear phase-out until 2022. An energy legislative package containing inter alia amendments to the EEG and a bill that provides the legal basis for the amendment of the Offshore Installations Ordinance (Seeanlagenverordnung) won the necessary approval of the Federal Parliament and Federal Council in July. While the 2030 goal of reaching an installed offshore wind power capacity of 25,000 MW has not changed, the EEG amendment lead to improved feed-in conditions for offshore wind power.

The EUR 5 billion KfW funding programme for offshore wind power was also already planned as part of the  10-Point Immediate Action Programme to the 2010 Energy Concept, but received additional impetus in the wake of the discussions to bring about a faster transformation of the German energy landscape after Fukushima. The programme was officially launched in June. KfW supports project financing by commercial banks for up to 10 offshore wind farms.  The funds will be granted as loans (debt financing). Equity of about one third of the total capital needed (Gesamtkapitalbedarf) has to be provided to the project company.

Source: Tennet

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