50Hertz wants to increase the capacity of its power grid
Germany’s 50Hertz plans to invest €8.7 billion over five years to modernize Germany’s energy system. This amount is more than double the business’s investment between 2018 and 2022. The new investments also amount to more than 5.6 billion euros, which the company announced in 2022. At that time, the investment was set to run until 2026.
According to official information, more than 50% of the intended €8.7 billion will be financed by debt. And this figure includes the amount of the green loan, which amounts to 600 million euros. Seven different banks have issued the loan and are part of an initiative by the state-owned bank KfW. The latter owns a 20% stake in 50Hertz.
The growing demand for electricity drives investment in modernizing Germany’s power grid. In addition, the country is actively increasing the share of renewables in the energy sector, which will reduce the consumption of fossil fuels. Analysts warn that the German power grid in its current state is unlikely to be able to handle the influx of clean energy from wind and solar power plants. Therefore, the infrastructure needs a significant financial injection to enable comprehensive modernization.
Modernizing Germany’s power grid
In March 2023, company officials noted the importance of renewable energy. 50Hertz said its electricity grid in eastern Germany is fully prepared for increased transmission from wind and solar power plants. Between 2019 and 2022, RES capacity has almost doubled, but the company believes its infrastructure can handle about 5 GW more. According to government plans, green energy capacity should increase by 2 GW annually. But so far, this target has yet to be achieved.
50Hertz operates power grids in East Germany and Hamburg. According to the company’s official figures, in 2022, the share of renewables in total electricity was 65%. In 2032, that figure is set to rise to 100%, enabling a complete phase-out of fossil fuels and reducing dependence on imports.
50Hertz was founded in 2002. Previously, the company was called Vattenfall. In 2010 the operator was bought by Elia corporation from Belgium, which owns 80% of the shares. The transaction amounted to €976.5 million.
50Hertz operates about 10.2 thousand km of transmission lines, which cover 30% of the country. The networks are designed for 220 kV and 380 kV capacity. The company employs more than a thousand people.