Posted by Mark Halper

The bill for connecting German renewable energy, such as from these Siemens wind turbines in the Baltic Sea, will be substantial.

As Japan’s new prime minister took office today with a view toward reversing the nuclear ban that the previous government sought, it doesn’t take too much mental latitude to wonder whether the other country well known for its nuclear abolition might also reconsider.

I’m talking of course about Germany, which in the wake of Japan’s Fukushima nuclear meltdowns announced it would close all 17 of its nuclear power stations by 2022.

The decision has thus far cost the country dearly environmentally, as Germany, like Japan, has had to increase the percentage of electricity it generates from CO2-emitting fossil fuels.

And then there are the financial costs of Germany’s longer term, ambitious push toward renewable energy.

We already knew that solar and wind farms do not come for free, and that the German consumer is looking at hefty rate hikes to help pay for them.


But news began emerging earlier this month of an extra bill:  €42.5 billion ($56 billion) to upgrade Germany’s electricity grid so that it can handle the unique requirements thrown at it by renewables.

That’s according to the country’s own state-owned energy agency, Dena, as reported by Bloomberg.

The costs would cover new lines that carry power extra distances from the new locations of wind and solar installations. It would also cover equipment and processes to help prevent grid overloads that can happen when intermittent solar and wind spike high.

“We will be able to consume the electricity from decentralized renewable generators only if we expand the grid infrastructure accordingly,” Dena head Stephan Kohler said.

A Dena study estimated that Germany would have to build 120,000 miles of new lines, and upgrade 15,500 miles of existing ones if the country were to expand the share of renewables from 26 percent today to 82 percent by 2030, as targeted,

The cost would be €42.5 ($36.4 billion) if Germany were to settle for a 62 percent renewable mix, Dena calculated.

Opposition Green Party member Oliver Krischer told Bloomberg that Dena’s observation is misleading because the costs reflect neglect in the power grid over the last decade, and are not tied to a shift to renewables per se.

Photo from Siemens.


  1. John says:

    Its a very fearful article, 42.5 billion euros over how many years???, In Australia the utilities upgraded their grids by several billion dollars in the past few years, basically to deal with that peak demand on a a hot summer afternoon when all the airconditiones go on. I think it would have been better to follow Germany’s model and have more PV instead,
    The upgrade in the grid caused a 60% hike in prices. The good thing is with the drop in PV costs and the increase in electricity price, PV is very attractive and we will get a gold plated grid that is redundant in some ways.

    The marginal costs for Germany in the future will be so low that its economy will be flying while others are trying to adapt.

    Germany’s energy change is a brave step.and there is a cost to it, all investment is like that. The German consumer has decided to invest in a sustainable country rather than consumables.

  2. Martin Kral says:

    John, just this morning I came across this write-up on BP’s website. It appears that they are giving up on utility-scale solar farms because it is just not profitable.

    BP is still investing in commercial wind turbine farms here is western Texas (where the wind blows forever) however, they are having the same grid problems Germany is having. Eventually, the grids will be resolved. It just takes time and money.

    Now if we could just get BP interested in making a lot of money building LFTR’s.

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