Structure of German market remains unclear

The structure of the German electricity market remains unclear though agreement between government and industry on eight areas of regulatory control has been achieved, according to Wolfgang Heller, president of the German industry federation (BDI).

Germany is disturbed by the prospect of really open competition, especially from EDF which is seen as a foreign monopoly.

Discussion is now focusing on whether there should be a pan-European network or two trading zones divided by the river Main. The idea is that future competitors would have to pay network charges for transporting electricity across the zone boundary.

The electricity industry association VDEW, favours the two zone model. It claims this is the only way of preventing EDF or Scandinavian producers from using the German network as a “cheap transit”.

The two zone model is, however seen as presenting a number of problems because of its potential restriction of free trade in the Single Market. The government is keen to ensure that Third Party Access to the network is covered by “detailed regulations for competition”.

The German Cartel Office (BKA) last month, for the first time, ordered an electricity supplier to allow electricity from competitors to pass through its network.

BKA ordered Berlin-based group Bewag AG to allow EnBW (Energie Baden-Wuerttemberg), VASA Energy and RWE to use its network to deliver electricity to the Berlin Parliament, private clients and industrial companies.

The head of the BKA, Dieter Wolf said it was something of a “pilot decision” which had implications far beyond Berlin. He said the BKA would not tolerate any hindrances whatsoever to full and complete competition.