Competition Problems Put Energy Transition at Risk
ZEW PresidentZEW President Achim Wambach Presents the Monopolies Commission’s New Energy Report
The President of the ZEW – Leibniz Centre for European Economic Research in Mannheim and Chair of the Monopolies Commission Professor Achim Wambach, together with other members of the expert panel, drew attention today in Berlin to competition problems associated with the energy transition. The problems mainly concern the construction of charging stations for electric vehicles in municipalities, tenders for wind energy, and price supervision in wholesale electricity. These points emerge from the current sector report for the energy markets in Germany, which the Monopolies Commission submitted to the Federal Ministry for Economics and Energy.
“We see competition problems both in the tenders for wind energy and in the development of the charging infrastructure for electrically powered vehicles, which endangers the success of the energy transition,” says ZEW President and Chairman of the Monopolies Commission Achim Wambach. For the seventh edition of the energy report, measures were therefore proposed to ensure that “Competition with New Energy” in Germany (“Wettbewerb mit neuer Energie”) – the title of the report – remains fully implementable.
These measures include attracting several providers for building charging station infrastructure of e-vehicles at the municipal level, as there is currently a considerable regional concentration of individual providers. The largest operators of charging stations in each region, for example, have an average market share of over 50 per cent, leaving customers wishing to recharge their e-vehicles without much of a variety in terms of choice. According to the Monopolies Commission, cooperation with several different operators would considerably intensify price competition regarding charging stations.
Adjusting the price supervision of wholesale electricity
Experts from the report also recommend making enough space available for wind energy. However, so few bids were recently submitted for onshore wind energy tenders that the tender volume could not be sufficiently covered. As a result, the expansion is not only slowed down by the low number of bids, but there is also an increase in prices, burdening consumers in the form of the Renewable Energy Sources Act (EEG) levy. The quantity put out to tender should therefore be adjusted to the limited availability of land and permits, which would restore effective price competition with tenders.
Finally, the Monopolies Commission urges politicians to adjust the price supervision of wholesale electricity. In concrete terms this means applying antitrust abuse regulations – which already prevent excessive prices in the wholesale trade – to electricity, and doing so without disrupting necessary investment projects. For example, the Federal Cartel Office could monitor reported power plant outages, making sure they cannot be used to influence market prices.
The Monopolies Commission is a permanent, independent expert committee which advises the German government and legislature in the areas of competition policy-making, competition law, and regulation. One of its statutory tasks is to prepare a sector report that examines competition development in electricity and gas markets. The Monopolies Commission – currently chaired by ZEW President Achim Wambach – consists of five members appointed, upon recommendation by the Federal Government, by the Federal President.
