The European Investment Bank is confident that Germany will be able to fund its ambitious plan of closing its 17 nuclear plants and replacing them with renewable energy and gas-fired power stations by 2022, a bank official said.
The European Union’s development bank reckons retooling the electricity supply will cost €90bn over a decade, with 15 per cent of this coming from its own coffers, according to Matthias Kollatz-Ahnen, EIB deputy president.
“If we as just one player are going to provide 15 per cent of the required financing, I think this is a clear sign of how achievable the [German government’s] goal is,” he told the Financial Times in an interview.
Mr Kollatz-Ahnen said the German government’s development bank, KfW, along with commercial banks, would be able to shoulder the remaining financing. Funds from the government could also play a role in some projects.
The EU nations that own the EIB have sought to focus their lending on the energy sector, and renewable-energy in particular, since 2007. The bank last year lent €6.2bn to renewables projects across the region, up from €400m in 2006.
Mr Kollatz-Ahnen said lending to this sector would grow “a bit more than 10 per cent” this year – a striking figure, given that the EIB was to cut total lending from €72bn to €62bn as programmes linked to global crisis run out.
“If Germany does vote to exit nuclear energy using a strict timetable, then I think the trend we’ve seen at the bank could be reinforced,” he said ahead of votes in parliament’s lower and upper houses late June and early July.
After the nuclear disaster at Japan’s Fukushima nuclear plant in March, Angela Merkel, chancellor, dropped plans to prolong Germany’s nuclear phase out to 2036 and returned to 2022, the original end-date set a decade ago.
Faster planning procedures and financial incentives are meant to spur companies to build renewables and gas-fired power plants to make up for 20 gigawatts of nuclear capacity being shut down in the next few years.
About half of new capacity is meant to come in the form of offshore windfarms, a business that has been slow to emerge as much of Germany’s coastline is a national park, forcing plants far away from shore into very deep water.
The EIB played a part in energy company EnBW’s Baltic 1, one of Germany’s first commercial offshore wind-farms which recently started operations, and in two projects by groups of local power companies, Global Tech 1 and Borkum West II.
“By year’s end I think we’ll have financed four or five offshore windfarm projects in Germany,” Mr Kollatz-Ahnen said. “I do think offshore wind projects in Germany have an increasingly good chance of being realised.”
Investors’ confidence would grow as more and more projects came on stream, he said. “We saw the same reticence when onshore windfarms started a few years ago. Now they’re part of every bank’s standard loan business.”