German ministry proposes independent power grid

FRANKFURT Aug 27 (Reuters) - Germany's high voltage power networks should club together in one entity in which the state would have a minority stake, the country's environment ministry said in a statement to Reuters on Thursday.

"The state as a co-owner should ensure in the future that power grids are built up to suit demand and efficiency criteria," said deputy Environment Minister Matthias Machnig of the centre-left Social Democratic Party (SPD).

"An efficient energy infrastructure is the vital artery for Germany as an industrial location," he said.

The proposal chimes with demands by pro-consumer and pro-renewables lobbies' wishes to free the grids of ownership by big utilities, lowering transmission prices to the benefit of consumers and pursuing national targets for renewable energies.

While it conflicts with individual operators' plans, it could point to future policy, depending on the outcome of Germany's national elections in four weeks' time. [ID:nL052558]

The plan was tabled amid debates between the SPD and conservatives in the current ruling coalition government over future energy policy ahead of the polls.

Conservatives, like the SPD, support renewables. But within their parties some forces suggest scaling back what they see as overly generous subsidies.

Two of four big utilities, E.ON (EONGn.DE) and Vattenfall Europe [VATN.UL], plan to sell their high voltage power grids, and a financial investor group has emerged as a potential buyer of the Vattenfall assets estimated to be worth at least 500 million euros ($711.8 million). [ID:nWEA0527]

But the other two, RWE (RWEG.DE) and EnBW (EBKG.DE), have said they will hold on to their power grids.

At the moment, infrastructure deals are few and far between in Europe due to difficulties in raising money in the uncertain economic environment.

Mandatory investments in German grids required by the energy regulator in coming years to connect new power stations such as wind parks in the North and Baltic Sea could also make the profit prospects of such assets less palatable.

The ministry, which said its proposal was based on a consultancy report it had commissioned, said if there was no public stake in the networks, vital investments for the future energy macroeconomy were not guaranteed.

It demanded the state take a 25.1 percent stake in a venture comprising the four grids, to be called Deutsche Netz AG.

(Reporting by Vera Eckert, Tom Kaeckenhoff, Anneli Palmen)