Government cabinet decides regulation that bans German power trading zone split

Germany’s acting government has adopted a draft regulation that bans transmission grid operators (TSOs) from unilaterally splitting the German power trading zone. “What distinguishes the German trading zone is its unity, which ensures equal conditions regarding grid access, power production, and power use across the country”, said State Secretary Rainer Baake in a press release. The BMWi argues that the acting government had the right to make this decision, because the draft regulation simply enshrined the status quo that had not been regulated to date. “The next federal government is free to reassess the design of the German power trading zone,” writes the ministry.
Splitting the trading zone would likely lead to lower power prices in the north, where the bulk of the country’s renewable power capacity is located, and to higher prices in the south. The lack of sufficient north-south grid connections means that excess power from the north can often not be transferred to the south, where the large industrial consumers are concentrated. The council of federal state governments now has to decide on the regulation.

Read the press release in German here, and the draft regulation in German here.

Read a CLEW article about the advent of the power market debate here, and a factsheet on loop flows here.