Market and challenges (distribution networks)
The Business segment – distribution networks – covers all activities related to the transmission of energy and information.
The energy distribution network in Germany is one of the largest area networks in Europe. With a total length of 500,000 system-km in medium voltage and 1,200,000 km in low voltage, it also has a significant expansion density.
The reinvestment level in the existing distribution network is strongly shaped and influenced by regulatory guidelines. Especially the Federal Network Agency´s incentive regulation (ARegV) has a significant influence on the spending and investment behavior of network operators in Germany (DSO). The current ARegV, effective in 2019, plans a constant investment in the energy distribution and defines corresponding rules for the depreciation of investment and expenses.
The expansion in distribution networks is not only influenced by reinvesting in existing grids, but also by the need to expand into new grids. Essential market drivers are macroeconomic issues such as e-mobility, onshore development (wind power) and the extension of broadband networks to support the digital strategy of the federal government.
In Germany, there are around 800 different distribution network operators with different grid sizes.
The main challenge in the next years will be the high level of expansion requirements of the existing network structure. In addition to the materials, also the process of laying and civil engineering must be considered.
Different reinvestments in the renewal of the networks were made, which favored the natural network aging. This has led to a slowdown in investment in the past and will lead to sudden new investments in the future.