Lower Electricity Demand in Germany Could Reduce Grid Expansion Costs
A recent report from business daily Handelsblatt suggests that lower electricity demand in Germany could result in significant cost reductions for expanding the power grid to accommodate the country’s increasing renewable energy installations. The expected costs of more than 500 billion euros by 2045 to expand both the long-distance transmission and short-distance distribution grids could be about 86 billion euros lower than projected due to lower electricity demand.
An analysis by consultancy e.venture, commissioned by grid operator 50Hertz, revealed that reduced electricity transport needs could lead to cost savings based on Germany’s current grid development plan. Recent electricity consumption numbers indicate a drop in demand, with the country only using 517 TWh in 2023 compared to 569 TWh in 2019. Factors contributing to this decline include decreased industrial output, slow investments in hydrogen production electrolysers, and a sluggish adoption of heat pumps and electric vehicles.
According to 50Hertz CEO Stefan Kapferer, consumers have permanently reduced their overall electricity demand since energy-saving measures were promoted during the energy crisis peak. He suggests that future grid development plans should consider scenarios with lower electricity usage. The rapid expansion of solar power poses challenges for grid operators in managing excess electricity feed-in. Slower connections for new solar panels could alleviate the need for extensive grid expansion.
Germany faces the task of transforming its power grid to accommodate the shift from centralized fossil and nuclear power stations to decentralized renewables like wind turbines and solar panels. The unique geography of the country, with higher wind energy capacity in northern states, necessitates the construction of new power lines to transport energy to industrial hubs in the south. This infrastructure development aims to minimize costly grid stabilization measures and better balance energy distribution as Germany adopts more renewable energy sources.
