"Germany as an industrial location needs reliability, planning security and affordable energy," says energy industry association BDEW. Photo: Mohn/CLEW.
European transmission system operators (TSOs) have recommended that Germany split its single electricity price zone into up to five bidding zones. This should maximise economic efficiency across the whole market area, ensuring security of supply and reducing costs. Party leaders in the country's south and industry groups reject the idea amid fears it would drive costs up under already challenging circumstances.
Germany should split its single power price zone into five areas to maximise economic efficiency, said transmission system operators (TSOs) in Central Europe. In its Bidding Zone Review, TSO association ENTSO-E modelled different configurations of Germany's single electricity bidding zone – which currently encompasses the whole country as well as Luxemburg – and said all simulation results splitting the market area into two, three, four or five zones show higher economic efficiency compared to the status quo.
In a theoretical scenario based on data and assumptions from 2019 splitting the single power price zone would have brought economic efficiency gains ranging from 251 million to 339 million euros this year alone, with a five-way split performing the highest, ENTSO-E concluded. Such a move could reduce grid bottlenecks and ensure more renewable power can be connected to the grid, as well as used instead of curtailed, reducing so-called redispatch costs. ENTSO-E warned that "it is an unfortunate reality that the input data used [in the review] is outdated", adding that an update was not possible due to methodological requirements.
