Germany’s single #powerprice zone is sending increasingly problematic price signals. This matters for consumers, power producers and investors, both in Germany and its neighbouring countries. ENTSO-E’s assessment and ACER’s opinion point to clear #efficiency gains from moving towards smaller, local price areas.
We’ve now published an English summary of our recent study assessing the benefits of moving to local electricity pricing in Germany. 1/x
Why does it matter?
📈 Today’s single zone in Germany creates distorted incentives and rising system interventions: redispatch costs jumped from 1.3 billion euros in 2019 to 3.2 billion euros in 2023. Local pricing could avoid these costs.
📉 Local prices would better match regional supply and demand, cut redispatch and – using 2023 data – would have reduced average power costs by a little over 6 euros per MWh for households and businesses. 2/x
🏭 They also generate sizable congestion revenues – over the past five years, German transmission operators (TSOs) could have earned an average of 1.2 billion euros per year. Such revenues could help cushion energy-intensive #industry in southern Germany.
Germany should chart a roadmap to local pricing in coordination with European partners – aligning investment with major demand centres, rewarding flexibility (#EVs, #heatpumps, #electrolysers, #storage) and safeguarding reliability. 3/x
It’s good for Germany – and good for Europe.
Read the English summary: https://www.agora-energiewende.org/publications/local-electricity-prices-in-germany#downloads 4/4
Agora Energiewende