In the Federal Minister for Economic Affairs and Energy’s proposal, potential problems arising from energy suppliers’ market power in relation to a threat to security of supply play only a minor role. Admittedly, the market power indices calculated by the Monopolies Commission, such as the Residual Supply Index (RSI), suggest that there is currently no market power problem in the wholesale electricity market and that overcapacity is driving down prices and reducing the willingness to invest. However, the forthcoming reduction of overcapacity in the ‘Electricity Market 2.0’ could lead to significantly higher market prices in the future. The Federal Cartel Office and the Federal Network Agency therefore face the difficult task of distinguishing between price surges caused purely by market power – which could be subject to legal action – and other cases. In this context, the market power report envisaged in the draft Electricity Market Act and to be drawn up by the Federal Cartel Office is particularly counterproductive. This aims to exempt some companies from abuse control. This could lead to excessive prices and, in the long term, to new overcapacity.
With regard to renewable energies, the Federal Government plans that the level of support will no longer be set by law in future, but will generally be determined through tenders in the form of auctions. The move away from the previous support system is linked to the hope of a stronger focus on competition and the associated reduction in costs. The Monopolies Commission welcomes the efforts to create a more competitive subsidy system by switching to a tender-based model. However, it points out that the change in system will not bring about any significant improvements without suitable framework conditions. The Monopolies Commission is particularly critical of the fact that the new tendering system still provides for technology-specific auctions. Technology-neutral tenders, on the other hand, would foster competition between generation technologies, which would enable more efficient generation of electricity from renewable energy sources and counteract further cost increases for consumers.
Due to the expansion of renewable energy, a significant expansion of the transmission networks is required in line with current plans. In the past, grid expansion in Germany has frequently led to problems with public acceptance. The Monopolkommission advocates examining alternatives to grid expansion more thoroughly than has been the case to date. For example, the expansion of renewable energy installations could be managed at a regional level, e.g. through a regional renewable energy component that takes into account the grid costs triggered by the expansion when determining the level of support. Furthermore, grid expansion should not be designed to accommodate even the rare, theoretical maximum feed-in of renewable energy. The Monopolies Commission’s analysis shows that shutting down some renewable energy installations when the wholesale price falls below zero, as well as taking redispatching measures into account in grid planning, could significantly reduce the necessary expansion.
