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Electricity grid expansion by 2045: costs for distribution grid operators

Increasing loads from electric cars, heat pumps, and renewable energy feed-in require the expansion of over 800,000 km of cable networks and thousands of transformers. Political mandates for underground cables are massively driving up costs.

The urgently needed Electricity grid expansion by 2045 Germany is a key element of the energy transition. However, it will require enormous investments in the coming years. Overall, the costs are divided between the expansion of the transmission grids, which are operated by Amprion, 50Hertz, TenneT and TransnetBW, and the development of the approximately 900 distribution grids, which ultimately bring the electricity to the consumers. The estimate of the total amount of funds to be spent is constantly increasing, so that the Electricity grid expansion will be more expensive than planned. A recent study by the University of Wuppertal now lists for the first time exactly where the German Distribution system operator have to invest in order to bring their networks up to date.

Urgent need for investment in distribution grids

The current plans illustrate the immense need for grid operating costs for the expansion of the electricity grid up to 2045:

  • High-voltage power lines are to be expanded by 34,500 km, which corresponds to an increase of 48 %.
  • Medium voltage cable will be extended by 262,000 km, an increase of 51 %.
  • Low voltage cable are to be extended by 526,000 km, an increase of 45 %.
  • The number of High-voltage and medium-voltage transformers must increase by 68 % to a total of 5,500.
  • With the Medium-voltage and low-voltage transformers an increase of 78 % to 494,000 units is required.

Why the need to expand the electricity grid by 2045 is so high

The extensive expansions are necessary in order to adapt the existing electricity grid to future requirements. One of the main reasons for the high demand is the Reaching the service life of many current Network components. Numerous existing lines and transformers have been in use for decades and now need to be replaced. At the same time, a study shows that the existing electricity grid could actually already be under greater strain than often assumed if the Grid connection points be better utilized. The enormous need for investment also results from further modernizations.

A key driver is the Increasing electrificationthat goes hand in hand with the green transformation. Electricity consumption in Germany will rise considerably in the coming decades, particularly due to the increased use of Electric cars and Heat pumps and the electrification of processes in industry. New consumer groups and processes require large amounts of electrical energy, which the electricity grid must be able to cope with. At the same time, the proportion of renewable energies, especially from wind and solar power plants, will continue to grow. These systems feed into the grid in a decentralized and volatile manner, which poses new challenges for the electricity grid. Not only does more electricity have to be transported, but it also has to respond flexibly to the Fluctuating feed-in from renewable energy sources.

Around EUR 200 billion for the expansion of the electricity distribution grids by 2045

The investment costs for the expansion of the distribution grids are rising continuously. According to current estimates by the Federal Network Agency, by 2045 around 200 billion euros will be invested in the expansion of the distribution grids. This sum is significantly higher than previous estimates, which is primarily due to higher material costs, increased labor costs and legal delays in the implementation of construction projects. In addition to cables and transformers Intelligent control systems that ensure both the efficiency and stability of the grids. Experts warn of the scarce availability of all necessary technical components and global competition, which could cause the costs of expanding the electricity grid to rise even further by 2045. Funding for the development of a own German production is strongly recommended by them.  

The decision is also particularly expensive, Reinforced underground cable instead of overhead lines. This political stipulation was made in order to reduce resistance among the population, as underground cables are less visible and therefore aesthetically less conspicuous. However, underground cables are considerably more expensive to build and maintain than overhead lines. Experts estimate that the increased use of overhead lines alone could save up to 35.3 billion euros. Despite these potential savings, there is political opposition to a return to overhead lines, as it is feared that this could lead to further delays and additional costs.

Solid electricity grid expansion by 2045 is essential

The challenges in expanding the distribution grids are great, but the expansion is essential for security of supply. The green transformation, increasing electrification and the growing share of renewable energies make it necessary to comprehensively modernize the existing electricity grid. This requires not only a considerable financial investment, but also flexible planning that takes account of the changing technological and economic conditions. This is the only way to ensure that the German electricity grid remains stable, efficient and sustainable in the future.

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