BDEW: Further Energy Market Reforms Needed – Situation of Utilities with Conventional Plants Deteriorates

After the reform of the Renewable Energy Sources Act (EEG) in 2014, reforms and regulations regarding the energy market design, combined heat and power, the incentive regulation, grid expansion, renewable energy, CO2 savings in power plants and energy efficiency, had to be tackled, the Federal Association of the Energy and Water Industry (BDEW) demanded at the beginning of the new year. In a BDEW survey 39% of those surveyed saw their economic conditions worsening over the last two years. Utilities with conventional power capacity were hardest hit.

69 % of the utilities with conventional generation capacity indicated that the effect on operating results was negative or even very negative.

BDEW called it alarming that almost a third of those surveyed called their CHP plants uneconomical. Only half of the CHP plants were break even, according to BDEW. 34% of the renewable power plant operators on the other hand indicated that the plants contributed positively to operating results.

The government and the Länder (federal states) had to work together to reform the energy laws, BDEW demanded, calling coordination so far insufficient. The association called for an energy framework which did not only focus on climate protection, but also on an affordable and secure energy supply. After the EEG reform the short and long-term conditions for the German power plant fleet had to become clear, BDEW chairwoman Hildegard Müller said.

Reportedly Chancellor Angela Merkel said at the New Year’s Reception of the German Renewable Energy Federation (Bundesverband Erneuerbare Energien – BEE) that she was sceptical of a capacity market. A capacity market reserve that remunerates non-volatile capacity (mostly conventional power) provided to balance the growing amount of intermittent renewable power input, has been much discussed in the past. Vice-Chancellor and Energy Minister Sigmar Gabriel also rejected the idea in late November 2014 for the time being. His ministry published a Green Paper on the future development of the German electricity market in October 2014, which has been put up for consultation. Comments are due by 1 March 2015.

Further issues Mrs Müller mentioned besides the ones already named were how to create a smarter energy infrastructure and to examine the potential of the internet, big data, innovation and decentralisation for the energy transitions towards a largely renewable energy supply.

Source: BDEW

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9 Responses to “BDEW: Further Energy Market Reforms Needed – Situation of Utilities with Conventional Plants Deteriorates”

  • My company produced a report looking at Germany & the prospects for bitumous coal (there are none). One thing became clear, considered on their own, fossil power plant operation is unprofitable, if the only measure is the wholesale market. But the reality is that most electrical power in Germany is sold through retail operations (or directly to large consumers). This part of power operations is very profitable. Of course one can play accounting tricks to disguise this – if generation is treated separately. But the reality is that the integrated companies such as EON and RWE are doing fine – not as “fine” as they used to (& fat cutting operations proceed apace) but nevertheless they are still OK. I don’t blame the BDEW for saying what it does – I’m glad that German politicians (unlike their counterparts in the UK) are not taken-in by it.

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