Germany: KfW Might Fund Expansion of Offshore Wind Parks

Germany KfW Might Fund Expansion of Offshore Wind Parks

Germany’s development bank KfW and its electricity consumers may have to cover certain offshore wind park expansion costs, Reuters reports.

Germany is going to install approximately 7,600 MW in offshore capacity by 2020 and 25,000 MW by 2030. However, legal liability risks create one major problem in the expansion of offshore wind parks. Grid operators, for example, must compensate wind park operators if power lines break down, which makes them reluctant to build connections to offshore parks. So investors in wind parks do not have a guarantee they will be able to sell their power.

If possible damages cannot be economically insurable despite technological and organizational precautionary measures, the compensation needs to be nationalized (shared by all in the form of higher electricity bills),” the document drawn up by the task force said.

The state-controlled KfW could fill in for overextended grid operators by helping cover the network connection costs, fully or partly.

Several companies, among which there are German utilities E.ON and RWE, have already stressed that delays in the connection of wind parks to the grid could largely affect Germany’s offshore expansion plans.

[mappress]

Offshore WIND  Staff, March 21, 2012; Image:  kfw-entwicklungsbank