Federal Network Agency Presents Annual Report 2011 and Warns of Slow Grid Expansion

Jochen Homann, the new president of the Federal Network Agency (BNetzA) has presented the agency’s annual report for 2011. In view of the slow electricity grid expansion in Germany, he called on all stakeholders to avoid delays and increase their efforts.

Mr Homann thanked his predecessor and said BNetzA would continue to work towards its three main policy aims: to promote competition in the regulated markets, ensure consumer protection and render infrastructure investments attractive. The accelerated gas and electricity grid expansion and broadband access, as demanded by politics, called for attractive investment conditions, which did not come without costs, he said. Hence, BNetzA had already pointed out that rising grid costs were inevitable, he stressed, saying that BNetzA would do everything in its power to ensure cost efficiency. Like his predecessor, Matthias Kurth, Mr Homann has dismissed calls by the network operators for higher grid yields. Yet certain improvements regarding the recovery of investment costs have come with the latest amendment of  Incentive Regulation Ordinance (ARegV), which determines the revenue caps for the grid fees German network operators can charge, and the settlement of various law suits between BNetzA and a large grid operators reached in February 2012 regarding the procedure for handling applications for investment budgets pursuant to ARegV, which allow grid operators to include the additional costs in their calculation of grid fees.

Mr Homann used the presentation of the annual report to act on the promise he made at his inauguration. The internet site of BNetzA now shows the current state of grid expansion (on the extra-high voltage level) in Germany. All the extra-high voltage power line projects that receive priority treatment under the Energy Line Extension Act (EnLAG) are listed, showing the state of the projects in maps and tables. Regular updates shall enable visitors to monitor progress and delays.

Mr Homann stressed that only 214 km of the 1.834 km of extra-high voltage power line projects pursuant to EnLAG have so far been built. Yet less than 100 km out of these 214 km are operational, he said. This was due to the fact that the lines often crossed the borders of federal states and could therefore only start transmitting energy where the preceeding or the following section was ready, he explained (permitting procedures fall within the competence of the sixteen German states). Regarding the remaining projects, Mr Homann said that the schedules had to be postponed again by one or two years.

In view of the energy policy shift away from nuclear power towards a renewable energy supply this was worrying news, Mr Homann said. He called on all parties concerned, i.e. grid operators and planning and permitting authorities, to increase their efforts so as to avoid further delays. The state of the EnLAG projects showed that the legislator made the right decision to enact the Grid Expansion Acceleration Act for Transmission Networks (NABEG) for further projects, Mr Homann added.

Currently the electricity transmission system operators are in the process of drafting a 10-year grid development (Section 12b para. 1 sent. 1 and 2 EnWG), which has to be submitted to BNetzA by 3 June 2012 (regarding the gas grid development plan, please see here). The development plan shall provide information on the need for new power lines beyond the EnLAG project lines. It shall be presented to and discussed with the public following its submission. Subsequently BNetzA will review the plan taking energy supply needs and network criteria into consideration and demand amendments if necessary, Mr Homann explained the further procedure.

Mr Homann also announced that BNetzA will release a separate report on the grid situation and the situation in the electricity and gas markets in the past winter. The main message will be that there is “no reason for announcing the all-clear”, he said. Between December 2011 and March 2012 the cold reserve had to be activated three times to balance the electricity grids. Besides, the situations in which the grid operators had to actively manage grids and generation had increased considerably, Mr Homann added.

Source: Federal Network Agency

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