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Germany

Germany

Better returns for German investment

Investment in new transmission network capacity for offshore wind power is to get special treatment from Germany's energy networks regulator, Bundesnetzagentur (BNA), which says returns will be improved by 10%. Transmissions system operators (TSOs) have claimed that poor returns on grid investment are preventing the construction of sorely needed transmission cables. Last month BNA also announced a series of general improvements to Germany's "incentive regulation" system applying to the monopoly electricity and gas networks sector from the start of 2009, all with the intention of creating additional revenues for TSOs. The catalogue of special rules includes making grid investments commissioned in 2007 and 2008 eligible for incentives and provision of debt relief on borrowed capital for transmission investments. With particular reference to offshore wind power, BNA will also consider advance-financing and post-financing costs for special treatment, in addition to allowing a rate of return on equity for new investments in electricity networks of 9.29%. "Some of those who chased after two-digit percentage returns in the US property market would be pleased today if they had retained their capital and secured a stable, low-risk annual return of over 9%," comments BNA president Matthias Kurth.

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