* Network must be expanded for green power
* Lawmakers urged to facilitate higher return on investment
By Vera Eckert
FRANKFURT, Dec 11 Germany's energy agency has
called on the government to allow power grid companies to raise
tariffs to provide a greater incentive for the billions of euros
of infrastructure investment needed to support the shift to
The Fukushima nuclear disaster in Japan last year prompted
Germany to switch off large parts of its nuclear generation
capacity and speed moves towards greater reliance on green
energy, with 35 percent of the country's power to be derived
from renewables by 2020.
However, Germany's power sector is still led predominantly
by conventional producers, such as E.ON and RWE
, with a highly fragmented distribution structure.
A study by Deutsche Energie Agentur (Dena) released on
Tuesday suggested that up to 42.5 billion euros ($55 billion) of
investment is required on distribution infrastructure until
"The expansion of renewable energy must be urgently aligned
with the expansion of infrastructure," the energy agency said.
However, Dena's managing director, Stephan Kohler, said that
current profit margins are not a sufficiently attractive
incentive for operators to install and maintain new equipment
and for investors to provide the finance.
Kohler called on policymakers to allow operators to raise
their tariffs to guarantee a better return on capital
expenditure. "The legal framework must be adjusted to facilitate
the necessary investment in the distribution grids of the
future," he said.
The distribution grids that take power from high voltage
networks served by big power stations and transport it to
consumers must be adapted to cope with an increasing number of
wind and solar power installations.
The changes are required to send locally produced
electricity in the other direction, such as from solar panels on
homeowners' roofs, Dena said.
These integration tasks require more capacity and improved
technology, such as state-of-the-art converters and cables to
allow surplus power to be shipped for consumption, the agency
The new hardware also needs accompanying installation,
servicing and monitoring, w hich requires changed job roles.
Dena is 50 percent funded by German government ministries
while the other half is provided by banks and insurers,
including Deutsche Bank and Allianz.
A study published last month by the VKU utility association
envisaged 30 billion euros of spending is required over the next
In a separate development, the government is expected to
give legal approval by the end of the year for the construction
of new high-voltage grids needed to help to transmit electricity
from offshore wind power over the long distances to major
consumption centres in the south of the country.
($1 = 0.7736 euros)
(Reporting by Vera Eckert; Editing by David Goodman)