North-eastern Germany to become "green power plant" of the energy transition

North-eastern Germany to become "green power plant" of the energy transition Stefan Kapferer at the 50Hertz annual media conference. Photo: Jan Pauls/50Hertz

In 2019, transmission system operator (TSO) 50Hertz transported more renewable energy than ever before over the 10,400 kilometres of its extra-high-voltage grid. At the same time, 50Hertz was able to lower the costs for congestion management.

Berlin - With a renewable energy feed-in of around 60 TWh, the majority of which was generated by wind and solar, a new record was achieved. In total, renewables covered up to 60 percent of the average annual electricity demand in the federal states of Mecklenburg-Western Pomerania, Hamburg, Brandenburg, Berlin, Saxony-Anhalt, Thuringia and Saxony. At the same time, fewer interventions in the operation of units were necessary. In the scope of the so-called congestion management (redispatch measures with conventional power plants and curtailment of renewable energy sources), 50Hertz was able to reduce the volumes from 4 TWh (2018) to a mere 2.5 TWh (2019) and cut back the costs from 134 million EUR (2018) to 84 million EUR (2019).

According to the Grid Development Plan for 2030 (2019), which was confirmed by the Federal Network Agency (Bundesnetzagentur, BNetzA) in December 2019, especially the three north-eastern states Mecklenburg-Western Pomerania, Brandenburg and Saxony-Anhalt will reach high electricity surpluses in the future. This shows that after the start of the coal and lignite phase-out, well-developed and secure power grids are necessary.

Stefan Kapferer, CEO of 50Hertz, stated:

The north-east of Germany continues to evolve into a ‘green power plant’ of the energy transition in Germany. Even with a constantly growing share of wind and solar power in the grid, we keep the costs under control. With regard to the time after the exit from coal- and lignite-fired generation, we stand for the security of the power system and create the necessary preconditions.

In terms of grid optimisation, reinforcement and expansion, 50Hertz is making good progress given the current legislative and planning circumstances. In the past year the grid connection of wind farms Wikinger and Arkona (the 50Hertz-Ostwind 1 project) with connection to the Lubmin substation (length of 92 km) was officially taken into operation. Furthermore, 50Hertz reinforced high voltage lines and substations, for example with new transformers and pylons. Artificial Intelligence (AI) is also used in the 50Hertz grid. It allows to improve the prediction of grid losses and, as a result, also reduce the costs for electricity procurement.

The economic development of 50Hertz is once again to be labelled positive. In 2019, the company managed to achieve an annual result of 178 million EUR (2018: 238 million EUR). In the ongoing year, 50Hertz estimates an increase in investments of around 40 percent. 2020 - 2024, 50Hertz will continue to invest intensively in the electricity infrastructure for the purposes of the energy transition. Compared to the 2015 - 2019 period, investments increased by 1.1 billion EUR to 4.2 billion EUR. Up to 60 percent of the investment programme was financed by third parties. New financing is also required. 50Hertz is planning to get loans of around 750 million EUR of debt capital by emitting a green bond.

Marco Nix, Chief Financial Officer of 50Hertz:

Because of our reliability, efficiency and stable performance, the financial markets put great trust in our work. Our investment grade rating has remained high with a stable outlook and we were able to improve our ratings in terms of sustainability performance. In that sense, we are optimistic about the large investments to come.

European cooperation projects play an increasingly important role at 50Hertz. The so-called Combined Grid Solution will become operational before the first half of the year. It will be a world’s first: two offshore wind farms (Kriegers Flak/Denmark and Baltic2/Germany) will be connected to each other via a submarine grid connection. This will link the power grids and markets of Germany and Denmark even closer together. Furthermore, the Hansa PowerBridge, an interconnector between Germany and Sweden, has entered the preliminary planning stage.

Chris Peeters, CEO of Elia Group:

With the Green Deal and the announcement of the first ever EU Climate Law, the European Commission is giving a powerful boost towards a carbon-neutral society. The transition is sure to take place at an even faster pace. As transmission system operators, we are frontrunners in the decarbonisation of our sector. Our top priority is the timely construction of critical grid infrastructure in a secure and efficient manner bringing socio-economic prosperity. That is what society expects of us. With our upgraded strategy, our new corporate structure and the successful completion of an important capital increase, Elia Group is ready to accelerate to make the energy transition happen.

Peeters said that the development of the necessary infrastructure in Germany will lead to considerable socio economic welfare. This was clearly demonstrated in the study ‘Future-proofing the EU energy system towards 2030’, which Elia Group published in November 2019.

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Volker Gustedt

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Volker Gustedt
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E-Mail: volker.gustedt@50hertz.com