Federation of German Consumer Associations sees no Need for Capacity Market

The Federation of German Consumer Associations (Verbraucherzentrale Bundesverband, vzbv) opposes the introduction of a capacity market in Germany and therewith directly rejects the request of the Federal Association of the Energy and Water Industry (BDEW). Vzbv believes that the current instruments are presently sufficient to guarantee security of supply. The establishment of a capacity market only would result in higher costs for the German customer.

At the end of September, the BDEW published its proposal for an energy market reform, which included the creation of a decentralized German capacity market. It justified the need for the establishment of a capacity market with the fact that conventional power plants lack profitability due to short operating times and low exchange prices due to the consequences of the “Energiewende“. Subsequently operators of conventional power plants want to shut down their conventional power plants as the generate losses. During times of a low feed in of renewable energies such endangers the security of supply, BDEW said.

Vzbv fears that such marked design will result in the financing of outdated coal-fired power plants at the expense of consumers. Additionally, vzbv sees great risks in the complexity of the design of a functioning capacity market, and with respect to its embodiment.

According to vzbv, the risk of outages is not apparent in the near future. Rather, the current mechanisms such as the grid reserve, which holds back contracted back-up capacity for supply shortages, as well as the authority of the Federal Network Agency to prohibit shut downs of conventional power plants, if they are relevent to the system, were sufficient, vzbv official Holger Krawinkel says. Vzbv therefore recommends to extend these instruments beyond the year 2017. However, vzbv sees a need to improve the existing mechanisms especially with regard to transparency of the process through which back-up power plants are acquired.

Source: German Federation of Consumer Associations (vzbv)

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