Germany's offshore grid system is around twice as expensive and less efficient and reliable than in the UK, according to a study commissioned by Orsted. The study, performed on behalf of the Danish developer by DIW Econ, found that Germany's offshore grid connection system cost on average €35 per megawatt-hour, compared with €16/MWh in the UK. The average cost difference narrowed to €10 after accounting for different connection lengths, technologies, environmental regulations and financing conditions between the two countries. The study concluded that inefficient regulation of offshore grid connections would create additional costs of €6.7bn in the North Sea alone for German electricity customers. Orsted Germany chief executive Volker Malmen said: “We have been building wind farms with grid connections in Great Britain for many years and see the numerous advantages in practice. “The study results now confirm our assumption that there are far more efficient and economical options for grid connection in Germany as well.” DIW Econ said a key difference between the two countries' systems was that offshore network planning, construction and operations in Germany was performed by different parties, requiring greater coordination. It also noted that transmission system operators being responsible for the grid connection mean there was no competition on pricing. In the UK, however, the wind farm and off-grid system are both built by the project developer after a competitive tender process. “Thus, not only is power generation determined by competition, but also the network expansion,” DIW Econ said. “Conversely, this means total optimisation of grid connection and wind farm, less coordination effort, no additional costs, no compensation payments for delayed grid connection and thus no costs passed on to the electricity end customer.”
A lack of competition and a fractured system of planning, construction and operations means Germany 's offshore grid system costs more than double the UK 's and is less efficient, according to a survey by Orsted. It said Germany 's offshore grid connection system cost € 35 ($ 35 ) per MWh, compared with the Germany 's €16 MWh, while inefficient regulation could cost Danish consumers € 40 extra. German developer DIW Econ , which conducted the study, said the UK 's competitive tender process streamlined costs and allowed "total optimisation of grid connection and wind farm".