Competition in the energy sector is the precondition for an efficient and low-cost energy supply.
- Competition in the energy sector
- What does the Bundeskartellamt monitor?
- Energy Monitoring
- Market Transparency Unit
Competition in the energy sector
Since the liberalisation of energy supply in the late 1990s, there has been a continuous surge of competitive activity in the electricity and gas markets. Today competition is present at almost all market levels of energy generation, trading and distribution. Customers can choose from a variety of offers provided by various energy suppliers.
There is, however, no competition in the electricity and gas networks as energy networks are so-called natural monopolies. They are subject to regulation by the Federal Network Agency and the regulatory authorities of the Länder. This system ensures effective competition on the upstream and downstream markets.
What does the Bundeskartellamt monitor?
The Bundeskartellamt protects competition on markets that are upstream and downstream of the energy networks. These markets cover in particular the generation, trading and supply of energy to end customers. The Bundeskartellamt intervenes in the areas of merger control, cartel and abuse proceedings and carries out corresponding sector inquiries.
There is almost no competition in the end customer markets for the supply of district heating and heating electricity. In particular customers for whom access to the district heating network of their local supplier is mandatory, cannot switch supplier. If companies use their market position to charge excessive prices for district heating or heating electricity, the Bundeskartellamt can conduct abuse proceedings to protect the customers. In addition, the Bundeskartellamt intervenes to ensure the elimination of barriers to market entry and obstacles to switching supplier.
Together with the Federal Network Agency the Bundeskartellamt monitors developments in the electricity and gas markets (Energy Monitoring). Under Section 48 (3) of the German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB) the Bundeskartellamt monitors in particular the degree of transparency, including that of wholesale prices, and the degree and effectiveness of liberalisation as well as the extent of competition on the wholesale and retail levels and on the energy exchanges. The results of their monitoring activities are published by the Federal Network Agency and the Bundeskartellamt in an annual report.
The current Monitoring report 2016 as well as the previous reports are available here.
Market Transparency Unit
In the future the Bundeskartellamt and the Federal Network Agency will monitor the electricity and gas wholesale markets within a joint Market Transparency Unit. The continuous monitoring of the trading sector ensures that electricity and gas wholesale prices are set by competition. This arrangement is also intended to raise the market participants' confidence in the effectiveness of the energy markets. The Market Transparency Unit is set up at the Federal Network Agency. Its tasks will be carried out jointly by the Federal Network Agency and the Bundeskartellamt. The two authorities are currently cooperating in a working group to determine the scope and technical design of the Market Transparency Unit.