Germany Closing In On $21-Billion Deal To Buy Its Largest Grid
The German government is close to agreeing a deal to buy its biggest grid from TenneT in a deal estimated at around $21 billion (20 billion euros), as Germany looks to strengthen its transmission systems with the rise in renewable capacity, sources with knowledge of the matter told Bloomberg on Thursday.
In February this year, Dutch state-owned operator Tennet Holding said that it was exploring a potential sale of its German activities to the German State.
“TenneT intends to engage in discussions with the German government, to explore the possibility of a full sale of TenneT’s German activities on acceptable terms. Such a transaction would enable the creation of two strong national players who would continue to cooperate in driving the energy transition,” the Dutch company said at the time.
Key details about the potential transaction were discussed at a meeting this week, and the valuation could be at the low end of the 20 billion euros-30 billion euros range previously discussed, according to Bloomberg’s sources.
Control over the power grid could allow Germany to accelerate the pace of adding renewable capacities to the system as it aims to be carbon neutral by 2045.
Renewable energy sources are expected to generate more than 50% of Germany’s electricity this year, Economy Minister Robert Habeck said last week. However, the minister from the Green party who is also responsible for climate action, warned that Europe’s biggest economy needs to accelerate the rollout of green energy to meet its climate targets to 2030 and beyond, Reuters reports.
By 2030, Germany aims to have renewables account for 80% of its electricity generation, Habeck said.
Solar and wind power additions are rising, but not fast enough to meet Germany’s targets.
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For example, onshore wind power installations jumped in the first half of 2023 compared to the same period last year, but despite the momentum, capacity additions are still too low to meet government targets, industry association VDMA said in July.
