Germany Offers Guarantees for Power Converters

The agreement will see the federal government and the states of Bavaria, Berlin, Bremen, Hamburg, Mecklenburg-Vorpommern and North Rhine-Westphalia guarantee up to 80 percent of sums stipulated by contracts. 

Converters are necessary to change alternating current (AC) into direct current electricity (DC) so that it can be transmitted over long distances with a minimum of power loss. The electricity is converted back to alternating current for local use.

The hardware is needed to send renewably generated electricity from Germany’s windy north throughout the country. On-shore converters cost around EUR 800 million while off-shore converters can run to EUR 2.5 billion.

“Converters and converter platforms are fundamental elements,” said Minister for Economic Affairs and Climate Action Robert Habeck in a statement. “The high costs of the projects and the number of new facilities needed are already presenting providers with great challenges. This special state guarantee program will substantially ease the foreseeable financial bottlenecks of German dockyards and providers involved in the projects. That will be an important contribution to achieving Germany’s transition to clean energy.”