German conservative calls for national grid

Conservative German politicians spoke out in favor of governmental control of the grid as a natural monopoly this month as the current for-profit grid operators struggle to expand the grid. This week, one of the four grid operators received an investment promise from Mitsubishi to facilitate connections for offshore wind in the North.

German Consumer Advocate Minister Ilse Aigner, a conservative of the Bavarian Christian Social Union party, has called for a partial nationalization of the German transit grid. Although investments in grid expansion have a guaranteed return of nearly 10 percent, improvements to the grid are slow in coming. The result has been delays in the development of offshore wind farms in the North along with power flows from northern to southern Germany via its eastern neighbors, such as Poland and the Czech Republic.

In the 1990s, a wave of privatization swept over Germany, which sold off a lot of its public infrastructure, with private power companies being forced to spin off their transport grids last decade as a part of the unbundling of power plant and grid ownership to prevent market manipulation. While not everyone agrees that the move was a bad idea, Aigner’s recent announcement shows that criticism of the privatization trend is not only limited to leftist opponents of globalization, but is also quite common among German conservatives. A lot of the concessions for public infrastructure expire this decade, and communities are expected to buy back a lot of this infrastructure.

The power flows across Germany's eastern neighbors are also not necessarily uncommon. Germany is itself a transit company for power that France exports to Switzerland and Italy.

An announcement made last week may help speed up grid expansion. Grid operator Tennet is to receive financial assistance from Mitsubishi in order to connect German offshore wind turbines. Overall, Mitsubishi plans to provide some 576 million euros for the connections, which come at a total price tag of 5.8 billion euros. Tennet – which is wholly owned by the Dutch government – lacks the capital to make the investments on its own, and the Netherlands refused to provide the necessary funding last year. (Craig Morris)