Platts 7th Annual European Power Summit: Germany – New Market Design Examined

Platts is currently holding its 7th Annual European Power Summit in Amsterdam. I had the pleasure of speaking on “Germany: New Market Design Examined“.

The bill for the new Electricity Market Act (Strommarktgesetz) is currently on the last laps of the parliamentary process. It shall modify the design of the German power market to make it fit for an energy world with no nuclear power, more renewable energy, and less coal. Together with the revision of the Renewable Energy Sources Act (EEG 2016), it is one of the key current energy legislative projects of the government.

The Electricity Market Act went through a staggered legislative process, with expert reports, green paper, white paper and now the parliamentary bill. Key elements are

  • No introduction of a capacity market, but a revised and extended set capacity mechanisms
  • Key principle: Keep energy only market, with in principle free price formation, allowing scarcity pricing
  • Some further developments of the existing market, with more flexibility of supply and demand, tightening of requirements for balancing groups

We will have a separate, more detailed post on the blog for the Electricity Market Act soon. In the meantime, you may find my presentation at 7th Annual European Power Summit interesting.

Sources: Platts 7th Annual European Power Summit, Presentation Matthias Lang

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