The negotiations on the Sale of the transmission system operator (TSO) Tennet have failed and become higher total costs and Grid charges for the urgently needed grid expansion. The Dutch operate the largest of the four transmission grids in Germany and originally wanted to sell it to the federal government. The transaction has now been canceled due to budget problems. Tennet is now examining other options such as private sales or an IPO.
Higher costs due to financing from the private capital markets
The Dutch government had sought the sale because it was reluctant to make the billions of euros of investment required, most of which would have to be made in Germany. Over the next ten years, Tennet plans to Investments from up to 160 billion eurosof which the majority is needed in Germany. Dutch Finance Minister Steven van Weyenburg expressed his disappointment at the failure of the negotiations and emphasized that the German government would support alternative solutions. Tennet plans to use public or private capital markets for financing and is supported by a Dutch shareholder loan of 25 billion euros.
Reactions to the failed TSO sale
Economics Minister Robert Habeck regretted the failure of the deal, as a takeover would have Reduce electricity costs and Synergies could have been created could. FDP energy politician Michael Kruse sees this as a Alarm signal for the investment climate in Germany and calls for an economic turnaround. Nevertheless, Tennet will remain one of the four most important transmission system operators in Germany, playing a key role in the energy transition. The expansion of the grid, particularly for the transportation of wind power from the north to the south of Germany, is essential and requires Billions invested. The federal government also holds shares of between 20 and 25 % in the three remaining UNBs.
Lack of funds from the KTF is now causing delays
Despite intensive negotiations between the Dutch and German governments and KfW, no agreement was reached. Originally, KfW was to take over the grid and sell it in part to private investors The federal government would have retained a blocking minority. However, the planned deal fell through due to Germany's financial difficulties, exacerbated by the disaster surrounding the Climate and Transformation Fund (KTF). The failure of the deal delays necessary investments in the German energy transition. Alternatives such as the sale to infrastructure funds are time-consuming and complicated. Discussions about cheaper but more protracted alternatives such as overhead lines instead of underground cabling further contribute to the delay.
Effects of the failed TSO sale of Tennet
Politicians and experts are now expecting various effects from the failed TSO sale of Tennet. These include:
- Delays in the urgent modernization of the electricity grids. The failure of the deal is hampering the implementation of necessary projects, such as the construction of HVDC lines and substations, which are essential for transporting wind power from the north to the south of Germany. This jeopardizes the timely achievement of climate targets and leads to higher costs in the long term.
- The impending funding gap of up to 160 billion euros over the next ten years must now be covered by alternative financing models. This will not only higher costs but the whole process becomes more complicated and time-consuming.
- Without the planned synergies and cost savings that a takeover by the federal government would have brought, the costs for grid expansion will be higher. The lack of coordination between the various network operators will lead to Inefficiencies lead.
- The failure of the deal is seen as an alarm signal for the Investment climate in Germany. If even democratic countries are reluctant to invest in German infrastructure, this will deter potential investors and reduce Germany's attractiveness as a business location.
- Political uncertaintyThe lack of agreement between the governments involved and the financial difficulties of the German budget cast a poor light on the political stability and ability of the government to push ahead with major infrastructure projects. This will undermine confidence in German energy policy.
Conclusion on the failed TSO sale of Tennet
The failure to sell the transmission system operator Tennet to the federal government will have significant consequences for grid expansion and the energy transition in Germany. The negotiations were terminated due to budget problems, which will lead to delays in important infrastructure projects and increase the overall costs or the Grid charges increased for everyone. Tennet must now find alternative financing models, which will add time and complexity. The lack of takeover by the federal government prevents the hoped-for synergies and cost savings, which will lead to further inefficiencies.
This event sends a worrying signal about the investment climate in Germany and could deter potential investors. Germany's political uncertainty and financial difficulties are affecting confidence in the government's ability to successfully implement major infrastructure projects. Overall, the failure of the deal jeopardizes the timely achievement of climate targets and poses a serious challenge to the country's future energy policy.