Green bonds could help finance Germany's energy transition: rating agency

BERLIN, March 5 (Xinhua) -- Green bonds could help finance the investment costs of Germany's energy transition, Berlin-based rating agency Scope Ratings announced on Tuesday.

Germany's electricity grid operators will face additional investment costs of 19 billion euros (21.5 billion U.S. dollars) by 2030 to prepare Germany's energy infrastructure for the further expansion of renewable energies.

Additional costs for maintaining grid stability and integrating onshore renewables would amount to around 52 billion euros by 2030, up from an estimated 33 billion euros, according to a draft grid development plan by Germany's transmission grid operators.

"Many investors looking for sustainable investments will follow this development closely" said Sebastian Zank of Scope Ratings, adding that "the green bonds market is likely to gain further importance".

According to Scope Ratings, Germany would need to expand its electricity grids to implement the so-called Energiewende, the transformation of the German energy system towards renewables and away from coal and nuclear power.

On average, renewables accounted for around 40 percent of Germany's electricity in 2018. Germany would therefore appear to be on track to meet its national target of producing 65 percent of its energy from renewable sources by 2030, the German rating agency added.

Zank described the 2018 figures for renewables in Germany as "impressive but unrepresentative" because of the daily fluctuations of renewable energy. Over the course of 2018, the share of solar and wind power ranged anywhere from 15 percent to 70 percent.

In addition to the strain caused by these fluctuations, Germany's transmission grids have also struggled to balance an oversupply of renewable electricity from the north of Germany with scarcity of supply in the south.

Wind farms in northern Germany are producing more and more renewable energy. According to Scope Ratings, routing this energy to the consumption centers in the south and west of Germany would require new long-distance high-voltage transmission and other infrastructures to be built. Enditem