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BERLIN/DEN HAAG (dpa-AFX) - The expansion of the electricity grids in Germany is costing billions - which is why the Dutch grid operator Tennet wanted to sell its German electricity grid to the federal government. However, the negotiations have now failed. Tennet announced on Thursday that the German government had announced that it would not be able to carry out the planned transaction due to budgetary problems.

The federal government is in the midst of difficult negotiations on the 2025 federal budget and medium-term financial planning, with billions of euros in holes to be plugged. Economics Minister Robert Habeck (Greens) expressed his disappointment at the failure of the negotiations with Tennet.

The search is now on for a "Plan B". This could also involve a minority shareholding by the federal government in Tennet. Tennet is one of four operators of the German transmission grids, the "electricity highways".

Long sales negotiations ended - alternatives are being explored

The negotiations between Tennet Holding and the state-owned bank KfW on behalf of the Federal Republic of Germany regarding a complete sale of Tennet Deutschland have ended without result, Tennet announced. Dutch Finance Minister Steven van Weyenberg expressed his disappointment. According to a letter from the minister to parliament in The Hague, the Dutch state now faces a budget gap of around 1.6 billion euros.

The Dutch state is the owner of Tennet's parent company. The costs of grid expansion in Germany had become too expensive for the Netherlands. Tennet had therefore made public its desire for the federal government to take over its German transmission grid.

Various alternatives for the sale of the Dutch operator's German electricity grid are now being examined, said Finance Minister van Weyenberg. "The preparations for this are in full swing." Tennet is preparing "concrete options for a (partial) private sale or an IPO of Tennet Deutschland". The German government has indicated that it supports these alternative scenarios.

In the meantime, Tennet is sticking to its extensive investment plans in both countries and is being supported by the Dutch government. The Dutch government recently granted Tennet a shareholder loan of 25 billion euros for the years 2024 and 2025.

Deutsche Netz AG?

The Tennet acquisition should be an important step on the way to a German "Netz AG", in which the federal government could hold shares in all German transmission system operators and gain more control over the expansion of the electricity grid.

Habeck said on the fringes of a trip to East Asia in the South Korean capital Seoul that he regretted that it had not been possible to combine the four transmission system operators Tennet, 50Hertz, Amprion and TransnetBW into one company. This would have made electricity in Germany cheaper in the end because synergies could have been created, for example in procurement.

It would have been important to avoid delays in grid expansion, said Habeck. "Now the path that was actually planned was not possible. But that doesn't mean that other ways shouldn't be found." The aim is still to combine the transmission system operators and provide them with a strong capital base. "Now we just have to think again from the beginning."

State Secretary for Economic Affairs Philipp Nimmermann said that the German government was still interested in a strategic minority stake in Tennet Deutschland as part of a consortium.

Federal government already involved in two operators

The federal government holds a 20 percent stake in the transmission system operator 50Hertz via KfW. The federal government has also acquired a 24.95 percent stake in the transmission system operator TransnetBW via KfW - the main shareholder is the EnBW Group.

Baden-Württemberg's Finance Minister Danyal Bayaz is also a member of its Supervisory Board. The Green politician called the failed Tennet transaction a bitter setback and said. "In view of the gigantic planning, construction and financial dimensions of grid expansion, I think the idea of a consolidated German grid company is the right way forward. A blocking minority should be held by the state and the majority should be mobilized via private investors."

High costs for grid expansion

Tennet took over the German part of its grid from Eon in 2010 and operates the grid in the largest of four zones in terms of area. The area stretches from the North Sea to the Austrian border.

As part of the energy transition, thousands of kilometers of new power lines need to be built so that wind power, which is mainly produced in the north, can reach large consumption centers in the south. The Federal Network Agency is assuming total investments of around 320 billion euros for the entire expansion of the electricity transmission grids by 2045. The costs for the grid expansion will be passed on to all electricity customers via the grid fees.

A spokesperson for the Federal Network Agency said: "We can see that Tennet wants to and will continue to expand its grids to a considerable extent. The investment conditions are attractive and we assume that Tennet will find alternative investors."/hoe/DP/mis