A German study suggests that the massive expansion of the German power grid, necessary for the country’s energy transition, can only be financed without burdening the end-consumer if the state takes the lead in financing. The study, conducted by the University of Mannheim, estimates that the grid expansion could cost around 650 billion euros by 2045. The authors, Tom Krebs and Patrick Kaczmarczyk, argue that if the grid operators had to finance the expansion solely through their own means, the network usage fees for households and industrial customers would have to increase by 7.5 cents per kilowatt-hour, effectively doubling the current average of 7.7 cents.
The study suggests that the state should take on the majority of the financing, with the four major grid operators, Tennet, Amprion, 50 Hertz, and Transnet BW, being majority-owned by the state and receiving additional capital from the state. This would allow the state to borrow at a lower rate and the grid operators to be financed at a lower cost, resulting in a smaller increase in network usage fees for consumers, at around 1.7 cents per kilowatt-hour.
In contrast, if private investors, both domestic and international, were to finance the expansion, the study estimates that the network usage fees would increase by around 3 cents per kilowatt-hour, with the state and the economy having to bear the additional costs of up to 14 billion euros annually to ensure high returns for private investors, such as Blackrock.