Opinion: Germany needs to bring back its power grids, and Friedrich Merz can make it happen
- Author: Rolf-Herbert Peters
- Estimated Reading Time: 2 minutes
- Merz Obliged to Purchase the German Electrical Highway Infrastructure
Energy conglomerate RWE plans to sell its 25% stake in power grid operator Amprion. The financial newspaper Handelsblatt reports that the bidding process has commenced, with global funds from Canada, Norway, and the Netherlands rumored to be interested—even Qatar is considering jumping into the fray.
Now, this behind-the-scenes swoop should raise alarm bells. Power transmission networks are foundational infrastructure. They safeguard our homes, charge our electric vehicles, and support our industrial backbone. These networks should be owned by the people—or, in this case, the state.
Power grids: a lifeline in times of war
This call to action isn't new, but the recent hybrid attacks by Russians on Ukrainian infrastructure should make even the last skeptic aware of the power grid's crucial role in society and industry. To function seamlessly, these networks need to be secure and rapidly updated to accommodate growing distributed renewable energy production. Experts at the University of Cologne's energy economics institute predict an investment need of 430 billion euros by 2045.
Consumers pay a hefty price for network maintenance through electricity fees, with some experts contending that returns for grid operators have been too lucrative. Nationalization of energy networks could alleviate this burden, allowing the state to set network charges more efficiently and guarantee a stable flow of funds for long-term investments.
Prioritizing supply and network stability
Increased security and stability for both supply and the network are vital, driving the acceleration of the energy transition and ensuring independence from foreign investors' financial whims. Additionally, conflicts of interest, such as those present when a company like RWE generates power through fossil fuels and operates networks, would be eliminated.
Unfortunately, the political landscape has missed chances to gain control of the networks, limiting stakes to minority positions. Most recently, former Finance Minister Christian Lindner (FDP) hindered Tennet's acquisition last summer, which currently runs the significant North-South power line in cooperation with the Netherlands. The Dutch are earning profits from their 14,000-kilometer-long power highway but are losing interest in shouldering the necessary billion-euro investments. The Netherlands continues to seek to dispose of the network, and Germany should seize the opportunity—if the nation's political landscape were not so frozen at the moment.
The government should declare the repatriation of grids as one of its major structural reforms under Chancellor Friedrich Merz. The coalition should include this objective in its contract. The timing is propitious, as electricity networks look to be struggling to find investors in the current market. This should push down the acquisition costs for the power grids.
- Power Grid
- RWE
- Electricity
- Qatar
- Other companies, such as Qatar, might enter the bidding process for RWE's stake in Amprion, posing a risk to the nation's ownership of power grids.
- The stability of electricity supply and networks is crucial, especially in times of war, which is why expert predictions suggest an investment need of 430 billion euros by 2045 for secure and rapidly updated networks.
- The nationalization of energy networks could potentially alleviate the financial burden on consumers while ensuring better control over network charges and eliminating conflicts of interest, as proposed by Chancellor Friedrich Merz as part of the government's major structural reforms.
