A new market association is being set up by the owners of Germany’s transmission and distribution grids, according to a Reuters report last week. The organization, to be known as VDN, is being established under the auspices of the German Electricity Association (VDEW).

The organization will eventually be based in Berlin and will be fully operational early next year.

DVG managing director Juergen Schwarz, is reported as saying the move reflected the need to mirror the commercial unbundling of large integrated power companies in the wake of market liberalization four years ago and the need to be present in the capital city.

“VDN represents the interests of operators across the entire grid, it will simplify concerted action, avoid duplication and create more transparency,” he said.

A statement from VDEW said the new group; fully named “Verband der Netzbetreiber – VDN – beim VDEW” had been set up to cover technical, economic and regulatory aspects of electricity transmission grid operations.

Its eleven founder members included the grid divisions of major utilities RWE, E.ON and EnBW as well as three regional and five municipal grid owners.

The three divisions emerged out of market deregulation in which key utilities merged into even bigger conglomerates, but had to separate out generating, transmission and sales units to recreate them as new firms with clearly defined competencies.

The other eight VDN founder members were WEMAG (Schwerin), HEAG (Darmstadt), Neckarwerke Stuttgart, GEW (Cologne), and the utilities of the towns of Dortmund, Hanover, Finsterwalde and Leipzig.

Schwarz said these companies would have formerly sought representation mainly through the organization for regional grid operators, ARE, and the association of municipalities, VKU.

While these organizations were continuing to work on their separate issues, all of the country’s several hundred grid owners were invited to join VDN as well.