The German competition authority The Bundeskartellamt and Federal Network Agency Bundesnetzagentur; has published jointly the Monitoring Report regarding German electricity and gas markets.
According to the report, there has been a decline in conventional electricity generation. Coal capacity on the market is expected to decrease by a further 9 GW or more by the end of 2023 under the Act to Reduce and End Coal-Fired Power Generation (KVBG). Coal plants with a capacity of nearly 5 GW already ceased marketing their coal-fired electricity at the end of last year as a consequence of the first tendering process. In addition to these plants with just under 5 GW of capacity that are prohibited from marketing their coal-fired electricity, a further 14 GW or more of capacity will be withdrawn from the market or partly replaced by other energy sources by the end of 2023.
On the other hand, there is renewable electricity generation and it is slightly more again in 2019 following comparatively weak growth in 2018, with the share of renewable electricity as a proportion of gross electricity consumption increasing to 42% whereas total costs for measures to maintain system security fell from €1.48bn in 2018 to €1.28bn in 2019.
When it comes to electricity and gas wholesale it can be seen that trading volumes and liquidity on the wholesale electricity and gas markets increased significantly in 2019 compared with a year earlier. It is mentioned that such development generally has a positive effect on competition, since it enhances market entry options for new providers and opens up opportunities for market players to diversify their choice of trading partners and products as well as their forms and methods of trading.
In conclusion, as at 1 April 2020, the average electricity price paid by a typical household customer was 32.05 ct/kWh, up 1.2 ct/kWh compared with the previous year. The reduction in the renewable energy surcharge to 6.5 ct/kWh from January 2021 represents a step towards stabilizing electricity prices. There was also an increase in 2020 prices for non-household electricity customers (commercial and industrial customers). Gas prices, which in 2020 remained stable for household customers and even fell for commercial and industrial customers, are expected to increase slightly in 2021 owing to the carbon levy.
(Bundeskartellamt – 27.01.2021)
NAZALI TAX & LEGAL