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Analysis: Germany renewables power grid revamp crawls ahead

FRANKFURT (Reuters) - Germany is running far behind in a program to install power lines to help transmit renewable energy as red tape and protests drag progress to a snail’s pace.

Energy think-tank Dena last week tabled figures suggesting that the planned renewables boom can only happen if 3,600 km of new high voltage lines, or an addition of 10 percent to the existing lines, are built by 2020.

Only 90 km were laid in the past five years.

“The implementation is a disaster,” said Claudia Kemfert, head of energy, transport and environment at the DIW institute.

“The approval procedures have to be improved as much as acceptance by the public, but financing is also important,” she said.

New cables and pylons are necessary because Germany plans for a low-carbon future which mandates that at least 35 percent of power must come from renewable sources by 2020, double the current level.

To achieve this, new wind and solar installations are being installed but their power must be transported from far-flung corners to big cities and industry.

The existing cross-country grids, which were build 30 to 40 years ago, show signs of wear and tear or simply do not stretch to where power is produced now.

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MONSTER PYLONS, LITTLE MONEY

Many of the 24 top priority projects identified in a law passed last year face delays, said energy regulator Matthias Kurth, citing endless planning at state level and a skeptical public.

Because of Germany’s federal structure, backers of lines crossing more than one state have to apply several times over.

A spokeswoman for TenneT, the former power grid arm of E.ON

now in Dutch hands, said her company filed “5 tonnes of paper” in the process of applying for the planned Wahle-Mecklar line between points in Lower Saxony and Hesse.

There are popular initiatives against the plans.

A group called Vorsicht: Freileitung (Attention: Overhead line) organizes vigils and human chains against what they call “monster pylons,” and which it alleges could harm people and the environment.

Would-be investors say Kurth’s authority could also help by loosening regulation for new power lines classified as necessary, and by raising the allowed maximum revenue streams.

“Current post-tax returns of around four percent really discourage an expansion of the networks, and that is not even counting in all the political controversies,” said Philipp Gerbert, partner and energy expert at The Boston Consulting Group’s Munich office.

Kurth has rejected easing the regulatory regime, saying he needs to protect consumer interests and hold prices down.

CONCERTED ACTION

Help may be at hand from a government initiative to bring together all stakeholders in an Economy Ministry platform.

This is to complement a rolling 10-year plan for network projects, which becomes mandatory from next year.

Later, roadmaps must be agreed by companies such as former RWE unit Amprion, TenneT and 50Hertz, the former Vattenfall Europe grid firm, to run up to 2050.

The ministry also promises quick credit facilities for offshore wind parks and legal changes so that cables connecting them with the shore can be laid quicker.

It also says there will be more information earlier for citizens, which it hopes will be a recipe to calm nerves.

“Early participation appears to be quelling opposition,” said Berthold Hannes of consultancy Bain & Company.

Reporting by Vera Eckert

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