The Bundeskartellamt has today published its first market power report on the competition conditions in the electricity generation sector. The report focusses on the market for the generation and first-time sale of electricity.

Andreas Mundt, President of the Bundeskartellamt: “While RWE currently does not hold a dominant position, it is relatively close to the threshold, which is confirmed by our current analyses for 2019. The undertaking was again found to be indispensable in meeting the demand for electricity in a significant number of hours. RWE could cross the threshold for market dominance already in the event of a relatively minor additional reduction of production capacities as a result of the phase-outs of nuclear and coal power. Our analyses are based on current data that include the third quarter of 2019. All market participants find the up-to-date information they require to better assess their own market positions in the market power report.”

As in the merger control proceedings RWE/E.ON (see PR of 26 February 2019) the Bundeskartellamt has based its analyses on extensive data on the actual utilisation of all power plants in Germany. The methods of market power analysis are described in detail in the report. According to this analysis, electricity producers other than RWE are currently far from holding a dominant position.

The report analyses the market and competition conditions on the German-Luxembourgian market for the first-time sale of electricity from 1 October 2018 up to and including 30 September 2019. Unlike before, prices in Austria are now often appreciably different from those in Germany. This situation being similar to that in other neighbouring countries, Austria is no longer included in the relevant geographic market.

In addition, current market data show that increased net imports from other countries have been used to meet the electricity demand in Germany.

The legislator introduced the market power report as an instrument in the Electricity Market Act in 2016, opting against a capacity market and for reinforcing market mechanisms in the electricity sector. The market power report has been a part of the annual monitoring report jointly published by the Bundeskartellamt and the Bundesnetzagentur so far. It is to provide market participants with more legal certainty regarding their market positions and complements the guidelines for the control of abusive practices in the electricity generation and wholesale trade sector under antitrust and energy wholesale law, which the Bundeskartellamt recently published together with the Bundesnetzagentur (see PR of 27 September 2019).

Click here for the market power report [in German], which is now available as a separate publication for the first time.