Energy: Association: Electricity price division is worth it economically

According to an analysis of the European network operator association of Entsoe-E, a splitting of the German electricity price zone would be economically worthwhile. A division of the electricity price zone in five small zones, which previously extended across Germany and Luxembourg, is the highest economic efficiency with cost advantages of 339 million euros, as can be seen from the study.

However, the authors expressly refer to great uncertainties from the assumptions, outdated data and the non-view of some aspects in the analysis. The authors also point out that some consumers may have to pay more by dividing.

A bid zone – also electricity price zone – is a geographical area within the electricity market in which electricity can be bought and sold. The wholesale price of supply and demand is formed within a price zone. The division of the German-Luxemburg electricity price zone was now analyzed into two, three, four and five individual zones.

The debate has been running for a long time

The division of Germany into several electricity price zones has been discussed for several years because the energy transition has led to an imbalance of the power supply: in southern Germany with its large industrial locations, electricity production is no longer sufficient to meet the need, more electricity is produced in the north. Through a geographical division of the market, some expect a decrease in electricity prices in the north and an increase in the south.

According to the EU Ordinance on the Elektrizitätsbuntermarkt, Germany now has six months to react to the study. In the coalition agreement of the designated Federal Government of the SPD and Union it says: “We stick to a uniform power bid zone.”

Industry speaks against it

In a joint statement, the Federal Association of Energy and Water Management and the Association of the Automotive Industry “neither make sense nor proportionate”. A split into several price zones would “lead to massive uncertainties for industry and also cloud the investment atmosphere for renewable energies – without the considerable risks and significant costs being noteworthy economic advantages,” they said.

The European Wind Energy Association of Wind Europe also sees the proposals critically. “There may be arguments for splingting existing bid zones on the electricity markets,” said Managing Director Giles Dickson. “But that would increase uncertainty about the future income of power plants. And that would undermine investments in new renewable energies.” The expansion of renewable energies at the moment has top priority, for this it takes the greatest possible security.

The Association of Local Companies decides a division. “A split would have serious economic and energy policy consequences and would endanger the desired energy transition,” said general manager Ingbert Liebing.