On 22 November, the Federal Cabinet approved the proposal for an amendment to the Electricity Network Access Ordinance. The amendment means that transmission system operators will not have the power to split Germany into several bidding zones as they see fit.
Rainer Baake, State Secretary at the Federal Ministry for Economic Affairs and Energy, said: “Germany has traditionally been one single bidding zone, which guarantees that everyone across Germany enjoys the same conditions in terms of , electricity generation and electricity consumption. The proposal that has just been approved ensures that the transmission system operators will not be able to unilaterally change the configuration of the bidding zones, but that this decision must be made as part of the relevant European processes. The upholding of Germany’s single bidding zone and the national obligations that the transmission system operators need to fulfil to uphold Germany’s single bidding zone have not previously been enshrined in law. Germany is currently ruled by a caretaker government, but the fact that the new amendment only serves to maintain the status quo and provides for more legal clarity made it possible for the government to adopt it. The amendment ensures the ability to act of the new government and the Bundestag.”
A bidding zone is defined as an area in which market participants exchange energy without capacity allocation. This ensures equal access to the grid across Germany. Splitting Germany into several bidding zones would mean that there would no longer be one single wholesale electricity price rate across the country. Abandoning the single bidding zone would therefore be disadvantageous.
The amendment in no way prevents the next German government from re-evaluating the configuration of Germany’s bidding zone or shaping the process at European level.