EnBW examines potential capital partnership for TransnetBW

Minority stake in TransnetBW possible up to maximum of 49.9 %
Increase in financial headroom for investment in further growth across the entire EnBW portfolio

The transmission grid is the backbone of the electricity supply in Germany. The picture shows fitters on a high-voltage pylon of the EnBW subsidiary TransnetBW in the Hohenlohe district. Foto: TransnetBW / Jan Potente

Karlsruhe/Stuttgart. EnBW has repositioned itself in recent years as a fully integrated energy and infrastructure group. In view of rapidly growing demand for sustainable solutions in the context of the energy and mobility transition, significant growth is planned in all three strategic segments by 2025. To deliver that growth, it is important to achieve a suitable balance between investment opportunities and the available investment funding.

EnBW is therefore examining options for taking on board a long-term investment partner for a minority stake of a maximum of 49.9% in transmission system operator TransnetBW. CFO Thomas Kusterer: “The resulting inflow of funds would be available for growth investment and provide balanced support for further growth across our entire portfolio.” EnBW plans to invest around €12 billion between 2021 and 2025, including over €6 billion in electricity and gas grids and some €4 billion in renewables and fuel switch projects.

Kusterer regards opening up TransnetBW to a minority shareholder as a logical step: “In an interconnected energy industry, investment partnerships are more valuable and necessary than ever. We have opened up a range of strategic and capital-intensive projects to such partners in recent years – mostly recently the Netze BW distribution grid for over 200 towns, cities and communities in the state of Baden-Württemberg. Other examples of successful investment partnerships include our EnBW Hohe See, Albatros and EnBW Baltic 2 offshore wind farms.”

Dirk Güsewell, COO Critical Infrastructure at EnBW and Supervisory Board Chairman at TransnetBW: “The success of the energy transition depends on a massive expansion of network infrastructure – first and foremost the transmission and transport systems for electricity and gas. This remains a fundamental part of our energy policy commitment and our strategy going forward. TransnetBW’s trans-regional electricity grid in particular is a backbone of the energy transition in Baden-Württemberg and the whole of Germany. With this in mind, EnBW will definitely remain the majority shareholder in TransnetBW.”

Growing investment needs for transmission grid expansion

Considerable investment is already being made in the expansion of Germany’s transmission grids. The Grid Development Plan 2035 (2021) identifies almost €10 billion in investment needed for TransnetBW alone, including for the major SuedLink and Ultranet projects. The new government coalition in Germany has now set ambitious climate targets for 2030. These include both significantly faster expansion of renewables and an earlier exit from coal. “If more wind farms are built in the north at the same time as more conventional power stations are shut down in the south, then more electricity has to be carried south through the transmission grids,” Dirk Güsewell explained. The fact that renewables will have to grow significantly more rapidly is already evident from the scenario range in the Grid Development Plan 2037/2045. That growth will in turn require substantial expansion of transmission grids – despite all efforts to upgrade the grid and operate it at higher capacity. Dr. Werner Götz, Chairman of the Executive Board, TransnetBW: “The energy transition is an enormous challenge. It makes sense to spread the financial burden over multiple shoulders. For us as a company, it is important that EnBW will retain a majority shareholding in order to ensure long-term continuity.”

The EnBW Board of Management emphasised that no decisions had yet been made on whether, when or in what form the proposal of opening up TransnetBW to an investment partner will be put into practice.