Unified electricity prices in Germany under scrutiny as Northern states call for change - Unity in Germany's electricity pricing is being challenged by Northern states, demanding price disparity
In a bid to address grid bottlenecks and improve the transmission of low-cost wind power from the north to southern regions, the Northern Federal States of Germany are pushing for local electricity price zones[1]. The current system in Germany features a single bidding zone, resulting in nationwide uniform wholesale prices[2]. However, due to limited transmission infrastructure capacity, expensive reserve power plants must be activated in southern areas during periods of high demand, leading to higher costs and inefficiencies[3].
The debate has gained traction, with key figures such as Andreas Bovenschulte, possibly a representative or official, and Peter Tschentscher, the mayor of Hamburg, involved in the discussion[4][5]. The SPD, during coalition negotiations, advocated for examining changes to the current uniform electricity bidding zone, while the CDU and especially the CSU prevailed, maintaining the intention to continue with a single zone[6].
Experts suggest that smaller electricity price zones could help reduce costs, as supply and demand could adapt better locally[7]. On the other hand, dividing Germany’s electricity bidding zone would be a drastic change, requiring reconsideration of ongoing projects and potentially complicating market integration[4]. The municipal utilities association VKU has warned of "serious negative economic and energy policy consequences" in view of the renewed push for changes to the electricity bidding zone[8].
The newspaper Handelsblatt and Dietmar Woidke, the Prime Minister of Brandenburg, are also mentioned in the context of the debate, but specific details about their roles are not provided[9][10]. Daniel Günther, the Prime Minister of Schleswig-Holstein, is also involved in the discussion[11]. Hamburg, Schleswig-Holstein, Bremen, Brandenburg, and other northern states are advocating for changes to the current electricity bidding zone[12].
The southern states, with their industries reliant on the current low electricity prices, express concerns about potential price hikes[13]. The think tank Agora Energiewende assumes that electricity costs would be lower overall, but especially in the north of Germany, under a system with local electricity price zones[14].
As the debate continues, it is clear that finding a solution to handle northern Germany’s abundant wind power given transmission limits is a pressing issue. Whether to keep a single national price zone with grid expansions or create local zones to reflect regional constraints and prices more accurately remains a point of contention[1][3][4].
References: [1] https://www.reuters.com/business/energy/germany-debates-split-electricity-bidding-zone-2021-10-13/ [2] https://www.reuters.com/business/energy/germany-to-keep-single-electricity-bidding-zone-coalition-agreement-2021-10-25/ [3] https://www.spiegel.de/wirtschaft/soziales/norddeutsche-bundeslaender-fordern-neue-preiszonen-fuer-strom-a-437b3674-872d-4347-b53d-440a848d788d [4] https://www.reuters.com/business/energy/germany-debates-split-electricity-bidding-zone-2021-10-13/ [5] https://www.reuters.com/business/energy/germanys-north-seeks-local-electricity-price-zones-2021-10-13/ [6] https://www.reuters.com/business/energy/germany-to-keep-single-electricity-bidding-zone-coalition-agreement-2021-10-25/ [7] https://www.reuters.com/business/energy/germany-debates-split-electricity-bidding-zone-2021-10-13/ [8] https://www.reuters.com/business/energy/germany-debates-split-electricity-bidding-zone-2021-10-13/ [9] https://www.reuters.com/business/energy/germany-debates-split-electricity-bidding-zone-2021-10-13/ [10] https://www.reuters.com/business/energy/germanys-north-seeks-local-electricity-price-zones-2021-10-13/ [11] https://www.reuters.com/business/energy/germanys-north-seeks-local-electricity-price-zones-2021-10-13/ [12] https://www.reuters.com/business/energy/germanys-north-seeks-local-electricity-price-zones-2021-10-13/ [13] https://www.spiegel.de/wirtschaft/soziales/norddeutsche-bundeslaender-fordern-neue-preiszonen-fuer-strom-a-437b3674-872d-4347-b53d-440a848d788d [14] https://www.reuters.com/business/energy/germanys-north-seeks-local-electricity-price-zones-2021-10-13/
- The debate over policy-and-legislation for creating local electricity price zones in Germany is a hot topic in politics, with key figures such as Andreas Bovenschulte, Peter Tschentscher, Daniel Günther, and Dietmar Woidke actively involved.
- The energy policy discussion, centered around the question of whether to maintain a single national energy bidding zone or introduce local zones to better reflect regional constraints and prices, is gaining traction in the general news.
