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Energy Monitoring Report 2017 published by the Bundesnetzagentur and the Bundeskartellamt

Date of issue: 20.11.2017

Jochen Homann: "Gas-fired power plants generated significantly more electricity in 2016."

Andreas Mundt: "Competition in the electricity and gas markets is continuing to develop positively."

The Bundesnetzagentur and the Bundeskartellamt have today published their joint annual monitoring report on developments in the German electricity and gas markets.

Electricity generation in transition

"The year 2016 has shown again that electricity generation in Germany is in a state of constant change," said Jochen Homann, Bundesnetzagentur President. "2016 was a relatively windless year, resulting in only modest growth in electricity generation from renewable sources. By contrast, the amount of electricity produced from natural gas increased again for the first time in several years – by around 37%," Mr Homann continued.

Germany's installed generating capacity increased to 212 GW (2015: 205 GW, 2014: 196 GW), with 104.5 GW accounted for by renewable energy sources. The recently introduced auctions for new renewable capacity will in future determine the development of generating capacity in this field. A total of 13 auctions have already been held. All of these auctions have shown a trend towards a marked decrease in costs. The key will be how many of the winning projects are actually implemented. Initial experience has been positive: more than 90% of the capacity awarded in the first two photovoltaic auctions held in 2015 has been installed.

Andreas Mundt, Bundeskartellamt President, underlined the growth in competition in the electricity markets: "Market concentration among conventional electricity suppliers was again noticeably lower. Alongside this, liquidity in the wholesale electricity markets reached its highest level since monitoring began. Wholesale prices on average experienced another significant fall in 2016."

Several factors besides lower market concentration are leading to a downward trend in market power. In particular, a significant part of the demand for electricity is now covered by renewable energy sources, for which the cumulative market share of the largest producers is considerably smaller than that of the conventional producers. In addition, the future closure of the remaining nuclear power plants will lead to changes in the market structure.

More competition benefiting consumers

As with electricity generation, competition in the retail markets is continuing to develop very positively.

"The joint market share of the four largest undertakings was again down on the previous year, and it can be assumed that there is no longer any single dominant supplier in the national retail markets for standard load profile and interval metered customers," said Andreas Mundt.

Further changes can be seen in the retail electricity markets. "The number of household customers who switched their electricity supplier showed another strong increase. We recorded a new high of 4.6 million supplier switches," said Jochen Homann, and added, "There was also further growth in the number of suppliers and thus in competition in the market."

This competition has a positive effect in particular on the prices paid by household customers, which remained largely stable. The average price for household customers as of 1 April 2017 was 29.86 ct/kWh, up 0.2% on the previous year's price of 29.80 ct/kWh. A reduction in the costs related to network charges, one of the price components, is also expected from 2018 onwards in the wake of the Network Charges Modernisation Act (NEMoG). The average price for commercial customers as of 1 April 2017 was 21.70 ct/kWh compared to 21.20 ct/kWh a year earlier, while that for industrial customers was 14.90 ct/kWh compared to 14.21 ct/kWh in the previous year. The rise in prices is due to price components that are not controlled by the suppliers.

Andreas Mundt commented on developments in the gas sector: "The latest monitoring report also shows a continual improvement in the conditions for competition in the various natural gas markets. We have, for example, been able to observe greater liquidity in the wholesale market, significantly lower wholesale prices and lower market concentration in the retail markets."

Retail gas prices also fell again slightly, continuing the downward trend in consumer gas prices. The average price for household customers as of 1 April 2017 was 6.15 ct/kWh, 0.39 ct/kWh lower than in the previous year. The average price for commercial customers was 4.50 ct/kWh compared to 4.72 ct/kWh a year earlier, and that for industrial customers was 2.69 ct/kWh compared to 2.77 ct/kWh in the previous year. The number of household customers who switched their gas supplier was also substantially higher at 1.5 million, compared to just 1.1 million in 2015.

The latest report and additional information (in German) are available on the Bundeskartellamt’s website.

Press release (pdf)

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