• Grid development is moving forward as 900 kilometres of lines are under construction and there is a peak in completions and approvals.
  • The share of renewable energy in the 50Hertz grid area grew to 73 percent while electricity consumption stagnated.
  • By 2028, nearly €23 billion will be invested in grid infrastructure, five times more than during the previous five-year regulatory period.
  • Key shareholder Elia Group announces equity package of €2.2 billion, including a private placement of investment and pension funds in the amount of €850 million.

The secure and cost-efficient integration of renewable energy in the power grids will be the key challenge in the coming phase of the energy transition. In the eastern German states as well as in the federal city states of Berlin and Hamburg – the control area of transmission system operator 50Hertz – 73 percent of the electricity consumed was generated by wind, solar and biomass installations. “This is very good news. Meanwhile, there is a growing number of difficulties in terms of affordability and system stability,” said Stefan Kapferer, CEO of 50Hertz, at the company’s annual press conference that was held in Berlin today. “That is why the further growth in the photovoltaic segment in particular should be guided by more realistic assumptions about the expected electricity consumption, by the development of the grid infrastructure and by increased storage capacities to support the grid.”  

With 94 TWh, electricity consumption in the 50Hertz grid area was as low as it was 20 years ago because of the tenuous economic development and the limited market penetration of electric vehicles and heat pumps. Wind power was the most important energy source with a share of 44 percent, while solar power covered around 15 percent of the electricity demand and saw a rapid increase in installed capacity of almost four gigawatts. At the same time, sunny days with a simultaneously low power consumption caused increasingly negative electricity prices on the electricity exchange of as low as minus 13.5 cents per kilowatt-hour. Conversely, due to a lack of wind and solar power feed-in, there were days with extremely high electricity prices on the exchange of almost 94 cents/kWh at the end of last year, which can be attributed to a lack of adjustable power plant capacity.

Stefan Kapferer: “Until now, both solar power peaks and dark doldrums could be handled well without putting system stability or the security of supply at risk. However, the large upward and downward price fluctuations are a clear warning signal from the electricity market. The framework conditions for the feed-in of renewable energy and adjustable power plant capacities need to be adjusted quickly. New power plants need to be built at locations in support of the grid throughout the country, including eastern Germany. In the next legislative period, we furthermore require a paradigm shift if the share of renewable energy keeps growing: the principle of ‘as much as possible, as quickly as possible and completely uncontrolled’ needs to be replaced by the principle of grid support. The current approach to promote renewable energy rewards the highest possible electricity feed-in. In the future, targeted incentives should be established for development as well as scheduling in support of the grid.”

You can find more information about the measures that we are proposing for the next legislative period of the German Bundestag at www.sicher-bezahlbar-klimaneutral.com.

More lines in service and under construction 

To allow the transmission of more renewable energy from producer to consumer, the development of the electricity transmission grids is also picking up the pace. 50Hertz put additional important lines into operation, such as the Nordring Berlin and the two sections of the Uckermark Line between Mecklenburg-Western Pomerania and Brandenburg. In total, almost 900 kilometres of overhead lines and cables are currently under construction, while another 1,800 kilometres are going through the approval procedures. For one of the most important projects of the energy transition, the SuedOstLink DC connection between Wolmirstedt near Magdeburg and the Bavarian state border, a legally binding planning approval decision was made for the southern section and the work along the route has already started. In the Baltic Sea, 50Hertz delivered the Ostwind 2 grid connection project on time, so that the Arcadis Ost 1 and Baltic Eagle wind farms can now supply their entire output to the extra high voltage grid. The land route and substation for the Windanker wind farm are currently being constructed in the scope of the Ostwind 3 project.

Financing on a solid foundation

In order to realise the urgently needed grid development, 50Hertz invested €3.6 billion last year, which is twice as much as in 2023. In total, 50Hertz will invest nearly €23 billion in overhead lines, submarine and land cables, substations, digitalisation and other technologies during the 4th regulatory period from 2024 to 2028, which is five times as much as in the previous five years. At around 60 percent, debt capital remains the most important source of financing for growth; 20 percent should come from the shareholders’ equity and 20 percent from the cash flow from operating activities.

Marco Nix, Chief Financial and Investment Officer: “We keep pursuing our growth course on the healthy economic foundation of 50Hertz as well as the entire Elia Group. Solid credit and sustainability ratings emphasise our attractiveness to investors and demonstrate that we are following the right path.” In 2024, 50Hertz achieved a year-end result of €310 million.

Elia Group strengthens equity base by €2.2 billion

50Hertz is receiving tailwind for its growth course from the main shareholder Elia Group. The group, which is listed on the stock exchange in Brussels, Belgium, announced on Friday a comprehensive package to strengthen its equity base of €2.2 billion for this year. The package is to consist of two steps. Initially, €850 million is to be subscribed by a group of four investors via a private placement on the stock exchange. The group includes Elia Group’s main shareholder Publi-T/Next Grid Holding, ATLAS Infrastructures (together with The Future Fund), BlackRock Inc and CCP Investments. Immediately after closing of the private placement, the new partners have committed to participating in the €1.35 billion rights issue , pro-rata to their stake following the private placement. Publi-T/Next Grid Holdung will remain the largest single shareholder of the Elia Group with 44.79 percent.

Bernard Gustin, new CEO of Elia Group: “This transaction will support the future growth of the Group in Belgium, Germany and international markets. It will enable us to implement our investment plan for the next few years. 50Hertz is and will remain an important pillar in our multinational group of companies, and we as the Elia Group are also a factor of stability for the German energy transition. We are very happy that we have a strong partner at our side in Germany in KfW Bankengruppe for the challenging years ahead.”

Elia Group’s total equity needs stand at €4 to 4.5 billion. With €2.2 billion already expected to be secured, the company will still need around €2 billion between 2026 and 2028. Elia Group announced to have a solid funding plan in place leading up to 2028 that could cover even more than Elia Group’s equity need. The diverse financing toolkit provides different options like hybrid bonds and bringing in a minority partner at operational level.

Source: 50Hertz