01/05/2012, Berlin

6 January 2012 – 5,000 days of energy market liberalisation

Liberalisation must be implemented throughout the EU

Energy sector criticises growing State interference in the energy market / Müller: Politicians should renew their commitment to competition in 2012

The German energy sector makes an appeal to politicians to renew in 2012 its commitment to competition in the energy market and to advance its completion throughout the EU Member States. "Germany’s energy market shows a great variety which is unparalleled in Europe. The EU Commission has attributed a role model function to the German energy market. Regrettably, electricity and gas prices are still regulated in many EU Member States by caps determined by the government and thus withheld from the market. Moreover, it is difficult for German energy suppliers to get access to the markets. Altogether, this leads to serious impacts not only on the energy sector but also increasingly on the German industry in competition. It is therefore about time to complete liberalisation throughout Europe and fully implement a free energy market," Hildegard Müller, Chairwoman of the General Executive Management Board of the German Association of Energy and Water Industries (Bundesverband der Energie- und Wasserwirtschaft - BDEW), declared on 6 January 2012, 5,000 days after the German energy market‘s liberalisation on 29 April 1998.

"The liberalisation of the German energy market is a story of success. For the energy sector at that time, liberalisation almost came up to a revolution. But today, competition in the German energy market is a matter of course", Müller said. At the present time, there exist approximately 1,100 electricity suppliers and more than 800 gas suppliers in Germany. According to BDEW, domestic customers can choose among 102 electricity suppliers, on an average, and 37 gas companies. "Also a look at the German electricity generation market comprising about 450 companies shows that the much discussed concentration in Germany is low as compared to other European countries, and besides continues to decline. This is regularly certified by European and German cartel authorities", Hildegard Müller said.

However, the successful implementation of competition in the energy market was increasingly jeopardised. "State interference in the generation structure, grid operation and composition of prices is becoming more frequent. Competition is pushed into the background. The room for manoeuvre and the competitive opportunities of the companies are decreasing. The companies wonder whether the government and society still support the changes launched 5,000 days ago", Hildegard Müller explained.

State interference became for instance apparent with the development of renewable energies. Müller said that "the share of electricity generation at fixed prices was constantly increasing and will soon predominate all other modes of generation and rightly represent the new guidance system." In addition, interference in power plant management became necessary ever more frequently to ensure system stability. Concerning power plant construction, the influence of the government increased with the growing number of the Federal Network Agency’s spheres of responsibility and specification procedures. This influence also increased with regard to network regulation and return on network investments. All these fields were increasingly considered from a regulatory instead of an entrepreneurial point of view.

"In 2012, the government should reconsider things, conduct an honest debate and review its decisions: Shall the energy turnaround be based on the confidence in entrepreneurial creativity in competing for the best solutions? Or shall the fear predominate that climate policy targets can only be achieved by means of regulation from top to bottom? For the energy sector, the answer to this question is clear: We support the competitive and free market system in this central sector of our economy. For only the market as the core of a competitive framework can remove inefficiencies and thus offer optimum solutions to the consumers", Hildegard Müller emphasised.

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