close
close

Germany and a Dutch operator end talks on the sale of the electricity grid due to budget constraints

A Dutch state-owned company that is the largest electricity grid operator in Germany says talks about the sale of its German operations to the government in Berlin have ended due to government budget constraints

BERLIN – A Dutch state-owned company that is the largest electricity grid operator in Germany said Thursday that talks over the sale of its German operations to the government in Berlin have ended due to the government’s budget constraints.

TenneT, one of the four transmission network operators in Germany, announced plans for the talks in February 2023. At the time, the company said it needed a “structural solution” to the financing needs of its German operations as the network is strengthened to support the transition to renewable energy, which it estimates at around 15 billion euros ($16.1 billion).

The transmission lines are crucial for Germany’s plans to completely shift electricity production from fossil fuels to renewable energy by 2045. Currently, some of the electricity generated by wind farms in northern Germany cannot be transmitted south due to a lack of transmission capacity.

The German government has now informed the Netherlands that “it cannot realize the planned transaction due to budgetary problems,” TenneT said in a statement on Thursday.

Chancellor Olaf Scholz’s quarrelsome three-party coalition is currently debating how to put together a 2025 budget while adhering to Germany’s strict self-imposed rules on taking on debt. That problem has already forced a hasty, court-ordered overhaul of the 2024 budget, complete with cuts in subsidies that sparked protests from farmers.

TenneT, which also operates the Dutch electricity grid, said it plans to “tap public or private capital markets for a structural financing solution for its German operations.” It added that the German government “is committed to supporting such alternative solutions.”

Related Posts