The market power of Germany’s leading electricity producers RWE, Leag and EnBW has increased significantly. That reports that Federal Cartel Office. Power plant operators could significantly influence market prices even with low market shares. For the report, the office examined how often an electricity generator is indispensable for the Meeting electricity demand is.
If the proportion of indispensable hours exceeds a threshold of five percent of the annual hours, this indicates that the company has a market-leading position. The report shows that RWE is well above this threshold, as is Leag. According to the report, EnBW is only slightly below the threshold.
Energy crisis after Russian attack on Ukraine
This is a short-term relaxation of the market power situation Federal Cartel Office not foreseeable. The federal government has announced tenders for the subsidized construction of controllable power plant capacities. However, these would not lead to a noticeable expansion of the offering for a few years at the earliest. According to the Federal Cartel Office, more competition on the electricity generation markets would have a lasting impact – for consumers in the form of lower prices.
Reason for that Development in the energy industry in Germany is the energy crisis following the Russian war of aggression against Ukraine in 2022. At this point, the Energy supply less safe in Germany. Old coal-fired power plants were therefore allowed to produce and sell electricity again until spring 2024 in order to limit gas consumption by gas power plants.
With the expiry of the time limit and further shutdowns as part of the coal phase-out, “domestic supply has become noticeably tighter,” the authority said. The consequences: higher prices, greater dependence on large providers for initial electricity sales and an increased importance of electricity imports.
