Germany remains committed to a single power market in its area and doesn\u2019t like the recommendation from a new report to split the market into five separate bidding zones.<\/p>\n
Entso-e, the association of EU transmission system operators, released a report<\/a> on Monday evaluating bidding zone configurations with the purpose of establishing “optimal bidding zone configurations in Europe to maximize economic efficiency and cross-zonal trading opportunities, while maintaining security of supply.\u201d<\/p>\n For the Central Europe region, which includes the German power market, the simulation results showed that the split of the Germany\u2013Luxembourg zone into five bidding zones would have the highest savings and economic efficiency.<\/p>\n Germany was quick to criticize the proposal, which is not binding, but if no agreement is reached, the bidding zones issue could be raised with the European Commission in six months\u2019 time.<\/p>\n \u201cWe remain committed to the single German-Luxembourg electricity bidding zone,\u201d a spokesperson for the German government told Bloomberg<\/a>, commenting on the Entso-e\u2019s report and its recommendations.<\/p>\n The report \u201csystematically overestimates the positive effects of bidding zone splitting,\u201d the spokesperson added, referring to the proposals and findings in the report.<\/p>\n Germany will decide how to proceed with this as the results aren\u2019t legally binding, they noted.<\/p>\n Germany is a single bidding zone, where most industrial enterprises in the south can bid and access cheaper electricity from the north, which hosts most of Germany’s wind power plants. Germany\u2019s government and industry are concerned that splitting the zone into smaller bidding zones would be a disadvantage to the energy costs for the industry, which is already burdened by high energy prices compared to the U.S. or China.<\/p>\n On the other hand, the large single bidding zone that includes Germany leads to volatile power prices in neighboring countries.<\/p>\n