Germany needs EUR 20 bn investment in power grid

(BONN) - Expanding Germany's electricity grid to cope with the country's planned exit from nuclear power will cost about 20 billion euros ($25 billion) over the next decade, a network operator warned Tuesday.

The cost is included in a 10-year plan for developing the electricity network, Martin Fuchs, head of the operator Tennet, told a joint news conference with German Chancellor Angela Merkel.

The plan was presented by Germany's four high-voltage electricity operators -- Tennet, Amprion, 50Hertz and TransnetBW -- to Merkel during a visit to the headquarters of the sector's regulator in the western city of Bonn.

Fuchs said about half of the total investment would go towards modernising the existing network while the rest would be spent on constructing 3,800 kilometres (2,361 miles) of new electricity lines, mostly high-voltage.

The network needs to be significantly beefed up to carry electricity generated by solar and wind power to replace, in part, nuclear power which Germany has decided to abandon by 2022.

"Without the expansion of the electricity network, progress on renewable energy won't produce results," the head of the network agency Jochen Homann told the same news conference.

Germany lacks, in particular, electricity cables running from the north to the south. While wind energy is essentially produced in the north, most of the demand comes from the more industrialised south and west.

Some players within the energy sector have been critical in recent weeks that the new network is being extended too slowly.

Merkel has made the so-called 'Energiewende', the term used to describe both the end of nuclear power and the promotion of renewable energy sources, one of her government's priorities.

"The transition is feasible in the way we decided it a year ago," Merkel insisted Tuesday, indirectly responding to those within her own conservative party who have questioned the timetable.

Berlin decided in March 2011 to permanently switch off Germany's eight oldest nuclear reactors and to close by 2022 nine others currently online in the wake of Japan's massive March 11 Fukushima nuclear disaster.