50Hertz claims €20.7bn transmission investment plans
Image courtesy 123rf
Elia-owned German transmission system operator 50Hertz is looking to invest €20.7 billion ($22.6 billion) in overhead power lines, on- and offshore cables, substations and other technologies in the coming years, compared with €4.8 billion ($5.2 billion) over the past five.
50Hertz, a Berlin-based system operator, announced their investment intention in response to the increasing amount of renewables coming online, resulting in increased demand for transmission capacity.
During a press conference, the operator said they integrated more renewables last year into the electricity than ever before. A total of 72% of electricity consumption across its grid area, they added, was met by renewables – the highest level ever – and now more transmission lines need to be reinforced or built to relieve grid congestion.
“50Hertz is entering a new phase in its corporate history. Its focus is shifting from planning and permitting to investment, construction and delivery. And we are making good progress in these areas”, said Stefan Kapferer, CEO of 50Hertz, at the TSO’s annual press conference in Berlin.
“We are preparing ourselves for the enormous efforts that will be needed well into the 2040s to make our transmission grid fit to meet the German and European climate protection targets. Faster grid extension and acceptance of the energy transition can only be achieved with greater cost efficiency.”
Commenting on the financial structure of the planned investment, Marco Nix, the utility’s chief financial and investment officer, said “Listed bonds remain the backbone of our capital structure.
“Around 60% of these relate to debt financing, like the two green bonds which amount to €1.5 billion ($1.6 billion), which we were recently able to successfully issue on the market. For the long-term success of the company, a solid development of equity and net result are also necessary.”
In 2023, 50Hertz invested €1.7 billion ($1.9 billion) in grid infrastructure and achieved an annual result of €220 million ($240 million) with equity strengthened by over 10% with shareholder support.
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Transmission buildout
Germany’s network development plan lays out transmission capacity needs, including 4,800km of new lines and reinforcement of 2,500km across the country.
50Hertz specifically, whose grid area covers the eastern German states as well as Berlin and Hamburg, has completed around one fourth of development measures for the onshore transmission grid, amounting to more than 800km of lines. Another 560km are currently being built.
This year, the company will also complete other important construction projects and commission a number of lines, including the Nordring Berlin project; the offshore grid connection for the Baltic Eagle wind farm (Ostwind 2); and the Uckermark Line, an important regional north-south connection between the Baltic Sea and the larger Berlin area.
In terms of offshore development, the plotting work for the Ostwind 3 project, which will connect the 300 MW Windanker wind farm to the mainland, has begun.
2024 also sees the company undertake preparatory work on line crossing under roads and railroad lines, including the SuedOstLink extra-high-voltage direct current transmission line between the Wolmirstedt and Isar substations near Landshut in Bavaria.
In future, 50Hertz’s on- and offshore grid is expected to grow by around 4,000km, provided that all projects included in the 2037/2045 Grid Development Plan were confirmed by the Federal Network Agency are included in the Federal Requirements Plan Act.
