On September 18, 2019, the Monopolies Commission published its biennial sector report on the development of competition in the German electricity and gas markets.[1] The report identifies three main areas of competition concerns: (i) monopolistic tendencies in connection with the expansion of e-mobility, (ii) insufficient competition for onshore wind energy tenders, and (iii) potential abusive pricing practices in electricity wholesale trading:

The Monopolies Commission fears that individual operators of electric vehicle charging points may become regional monopolies and subsequently charge excessive prices. Local authorities should seek to ensure that a number of different operators receive authorization for the construction of charging points networks. Moreover, the Monopolies Commission urges the FCO and the state competition authorities to take action in areas where operators hold a dominant position.

The Monopolies Commission identified challenges in the tender process for onshore wind energy tenders stemming from low participation in the tenders and a lack of open space and permits for wind turbines. The Monopolies Commission recommends that open space and permits should be made available as soon as possible. If this is not possible, the tender quantity should be adjusted to the limited availability of open space.

For the electricity wholesale sector, the Monopolies Commission fears that the future shortage of generating capacity caused by the transition away from nuclear power and coal will allow producers to influence the electricity price by deliberately withholding capacity. The Monopolies Commission recommends applying the abuse of dominance rules to any such conduct and therefore generally welcomes the FCO’s and FNA’s draft guidelines on the application of those rules to the sector.[2] However, it warns that numerous uncertainties remain regarding the applicable standards (in particular temporal market definitions), the handling of “technical” failures, and the possibility of using funding shortfalls to justify capacity restraints.

[1]              Monopolies Commission, 7th Sector Report on Energy Markets, September 18, 2019, only available in German here. A press release is available in English here.

[2]              The final version of the Guidelines is also discussed together with the Monopolies Commission’s recommendations in more detail in this issue’s previous article.