Network operator TenneT is examining whether the German branch can be sold to the German state. As a result, German operations would become a separate company, which TenneT had previously been reluctant to do. TenneT currently manages the high voltage grid in the Netherlands and part of Germany.
With the acquisition of the German part of TenneT, Germany wants to expand its energy infrastructure. This has to do with the energy transition where Germany wants more control over its own electricity grid. The war in Ukraine also plays a role. This created awareness about the importance of not being dependent on other countries for energy supply.
TenneT is not enthusiastic at first
The Dutch state is the sole shareholder of TenneT. The Dutch cabinet has long seen the sale of the German branch as an option, as the network operator will need to invest tens of billions of dollars in the German grid in the coming years. The state does not want to assume the financial risks of these investments and therefore wants Germany to buy the activities.
The Netherlands has not invested in German operations since 2010. Tennet says that so far, investments in Germany have been made with borrowed money. However, such large investments in the German network can increase interest costs for TenneT and ultimately the Dutch government contributes to it.
Also, the sale of TenneT’s German branch could bring a lot of money for the Dutch state. TenneT is yet to comment on the amount due from the negotiations.
The network operator had previously objected to the transmission of the German part, as activities in Germany had made Tennet a major player. This has been beneficial. For example, TenneT can get a discount if the sockets need to be made at sea. TenneT hopes to reach agreement on these issues once the two separate companies are formed.
not sure yet
The sale is not final yet. The Dutch state has not yet made a final decision on the sale of German operations. The negotiations are still important, according to Climate and Energy Minister Jetten: “I think we can only achieve a good result if the Germans are willing to pay a good price and if we can get TenneT to work well together in both countries. may come.”
Network operator TenneT said in a statement that its talks with the government will focus on “securing supply and ensuring the interests of its employees, customers, suppliers, financiers and other stakeholders.”
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
