Joint BNetzA and EPEX Spot Conference on Exchange Trading of EEG Electricity

At a conference under the motto “Eighteen months of power from renewables on the exchange”, 300 experts discussed the experience gained and the perspectives of the marketing of electricity falling under the German Renewable Energy Act (EEG). The conference was jointly organised by the German regulator Federal Network Agency (BNetzA) and European Power Exchange, EPEX SPOT SE.

Since 1 January 2010, the German transmission system operators have to sell renewable energy that is passed on to them by the distribution system operators at the spot market pursuant to the Equalisation Scheme Ordinance (Verordnung zur Weiterentwicklung des bundesweiten Ausgleichsmechanismus – AusglMechV).

Iris Weidinger, Chairman of the board of directors of EPEX SPOT and the president of the Federal Network Agency, Matthias Kurth drew positive conclusions of the EEG marketing. Marketing functioned smoothly and did not influence the market price for electric energy, Mrs Weidinger said. There was no sign of market distortion. At the same time, the volumes of the auctions had increased significantly.

Mr Kurth pointed out the need for further action: “After the adoption of the legislative package for Germany’s future energy policy four days ago, the time is right to talk about future possibilities of direct marketing and discuss proposals of further optimising the EEG equalisation system. The percentage of renewables in the power production shall almost double by 2020. If we continue to develop the framework and maintain the installation speed, we can achieve this goal“, he said.

On 8 July, the Bundesrat, the legislative body the represents the federal German states, passed for the most part an energy legislative package, previously adopted by the Bundestag (German Parliament). It contains inter alia a staggered withdrawal from nuclear energy until 2022 and an amendment of the EEG. The EEG amendment introduces renewable energy expansion targets, e.g. 35% by 2020, and amends or incorporates provisions so as to reach more cost-efficiency as well as market, network and system integration of renewables, while holding on to proven basic principles of the EEG, such as priority transmission and fixed feed-in tariffs. After signature by the Federal President and promulgation, it will enter into force on 1 January 2012.

A new part 3a (Sections 33a to 33h) is devoted to direct marketing of renewable energy. To encourage direct marketing, which is currently allowed pursuant to Section 17 EEG 2009, the amendment proposes a market premium (Marktprämie) which operators shall be able to opt for instead of receiving the fixed feed-in tariff.  It shall be calculated as the difference between the respective EEG feed-in tariff and the monthly ex-post average price for the energy source specific reference market value (energieträgerspezifischer Referenzmarktwert).

The conference was the prelude for a report by the Federal Network Agency. Its goal is to identify ways of optimising the existing EEG equalisation system and, at the same time, to develop possibilities of transferring EEG marketing by the transmission system operators to one or more independent third parties. Pursuant to Section 2 para. 1 sent. 2 AusglMechV, EEG marketing can be transferred to third parties by an ordinance in accordance with Section 11 para. 4 AusglMechV.

Due to rising demand for green power trading on the spot exchange, the EPEX Spot presented a first two-step auction model at the conference. It proposes to firstly trade power and then its green origin. The practical implementation will require further studies, EPEX Spot pointed out.

All the proposals should be further developed, Mr Kurth said, inviting all market participants and stakeholders to participate in consultations in autumn.

Source: Federal Network Agency, EPEX Spot

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