Tim Meyerjürgens: Accelerated Grid Expansion Could Significantly Lower Electricity Prices

Tim Meyerjürgens, the CEO of Tennet, a prominent electricity transmission system operator, has emphasized the necessity of accelerating the expansion of electricity networks in Germany. In a recent interview, he pointed out that rapid developments in grid infrastructure are crucial for reducing electricity prices for consumers.

Meyerjürgens noted that while renewable energy sources such as wind and solar are cost-effective in terms of generation, the challenge lies in transforming the entire energy system to accommodate these fluctuating energy sources. Stronger infrastructure is essential to manage the variability of renewable energy, and the current pace of grid expansion has been inadequate.

As net fees now constitute a significant portion of electricity costs--nearly one-third--Meyerjürgens advocates for a robust investment in grid infrastructure, arguing that it represents a more economical approach compared to maintaining the status quo. He highlighted that delays in infrastructure development contribute to increased operational costs, which ultimately burden consumers.

With a wealth of experience spanning nearly three decades in the energy sector, Meyerjürgens has taken the helm at Tennet, overseeing extensive electricity transport networks across Germany and the Netherlands. He underscored the importance of a consistent political framework that fosters long-term investments in renewable energy solutions, allowing industries and households to plan effectively without the disruption of recurring policy debates.

The Tennet CEO also addressed concerns regarding future net fees, asserting that the speed of grid expansion directly influences costs. He expressed hope that if infrastructure investments proceed swiftly, net fees--and consequently electricity prices--could decrease. The transition of industries towards electrification and the advancement of technologies such as electric mobility and green hydrogen are also pivotal factors that influence the energy landscape.

Meyerjürgens called for immediate action from the incoming government, specifically regarding pending legislative measures essential for ensuring a stable electricity supply. He emphasized the need for additional gas power plants to serve as short-term reserves during periods of insufficient renewable energy generation, citing recent experiences where older reserve plants had to be activated.

While acknowledging that citizen opposition can delay projects, he recognized the necessity of balancing local concerns with the overarching need for modernized infrastructure. The implementation of underground cable solutions, although more expensive, was highlighted as a strategy to mitigate public resistance. However, he noted that the political preference for this approach has not significantly alleviated conflicts surrounding new developments.

The decision to prioritize underground cables over overhead lines has led to increased costs for Tennet. Meyerjürgens indicated that a reassessment of this policy could be beneficial, especially as several infrastructure projects face potential delays beyond June, necessitating new approvals that could allow for a reevaluation of the cable priority.

Furthermore, Tennet is exploring partnerships with private and public investors to facilitate continued infrastructure improvements, as the Dutch government has expressed hesitance to indefinitely finance Germany's energy transition. For Tennet to remain an attractive investment opportunity, Meyerjürgens stressed the necessity for competitive capital returns in comparison with other European markets.

In addition to grid enhancements, Meyerjürgens addressed the importance of optimizing offshore wind energy production. He argued for a shift in focus from the number of installed wind turbines to the efficiency and generated output, suggesting that fewer, strategically placed turbines could yield higher energy production and lower costs.

On the topic of battery storage systems, he acknowledged their potential but cautioned against their current deployment patterns that could overload certain parts of the grid. He advocated for regulatory frameworks that incentivize the establishment of storage solutions where they are most needed, aligning them with overall grid management.

As Germany continues its transition towards a more sustainable energy future, the insights from Meyerjürgens highlight the critical interplay between infrastructure development and energy pricing, reinforcing the need for robust policy support and strategic investments in the evolving energy landscape.