30.11.2023
Source: Energy & Management Powernews
The Federal Cartel Office and the Federal Network Agency have published the 2023 monitoring report on developments on the German electricity and gas markets.
The 2023 monitoring report primarily contains data analyses from 2022, but also takes into account relevant developments from 2023. This was announced by the Federal Cartel Office and the Federal Network Agency when it was published on 29 November.
"In order to prevent supply bottlenecks, the legislator reacted with a temporary return of coal-fired power plants and a lifetime extension for the remaining nuclear power plants in 2022," said the President of the Federal Network Agency, Klaus Müller. These measures have proven to be effective, but climate protection goals must not be lost sight of, Müller also warned.
The President of the Federal Cartel Office, Andreas Mundt, explained: "We always pay particular attention to conventional power generation." Even though market concentration in this sector fell again in 2022 following an increase in the previous year, RWE and a number of other generators remain increasingly indispensable for meeting electricity demand. "We must continue to monitor the market closely here, especially as the importance of electricity imports for limiting the market power of domestic electricity producers has increased, and in some cases become indispensable," said Mundt.
Market structure in electricity generation
The shortage of natural gas due to the end of gas imports from Russia and the resulting increase in gas prices on the wholesale markets led to a decline in electricity generation from natural gas of a good 14%. Due to the temporary return of coal-fired power plants to prevent supply bottlenecks, more electricity was generated from lignite and hard coal. Electricity generation from lignite-fired power plants rose by a good 5%, while that from hard coal-fired power plants was around 14% higher than in the previous year. Overall, net electricity generation across Germany decreased slightly in 2022 due to the fall in electricity consumption.
Gas imports
"We still need the planned LNG terminals to further diversify our gas sources," Müller demanded. This is why the Federal Network Agency has supported the expansion with all its might in recent months. The lack of gas supplies from Russia from the beginning of September 2022 could be compensated for by additional imports. The most important sources of gas imported to Germany in 2022 were Norway, the Netherlands and Belgium, with a total volume of 983 billion kWh. This corresponds to around 68% of all German gas imports. In addition, the first German floating LNG terminal in Wilhelmshaven went into operation in December 2022. In January and March 2023, this was supplemented by two further floating LNG terminals in Lubmin and Brunsbüttel.
Development of renewable energy sources
Generation from renewable energy sources increased by around 8% in 2022 due to the strong expansion of wind and photovoltaic systems and strong solar radiation in 2022. The share of electricity from renewable energies in gross electricity consumption rose to 45%, up from 40% in 2021. The statutory expansion paths for onshore wind, photovoltaics and biomass were achieved in 2022. However, in order to achieve the increased expansion targets for 2030, an even higher expansion is unavoidable, according to the report.
The progressive expansion of renewable generation coupled with delays in grid expansion led to grid bottlenecks, which require redispatch measures to be resolved. Nevertheless, around 97% of renewable electricity could actually be transported to consumers.
Electricity and gas market
The year 2022 was characterized by large swings on the wholesale markets for electricity and gas, with wholesale and therefore retail prices for electricity and gas reaching new highs. Although a decline and stabilization of wholesale prices was observed towards the end of 2022 and in the first quarter of 2023, the price level is still higher than before the Russian war of aggression and the beginning of the energy crisis.
According to the German Federal Cartel Office, the cumulative market shares of the four largest electricity and gas suppliers on the end customer markets remained below the legal presumption thresholds for a dominant market position. As of April 1, 2023, electricity and gas prices for household customers had once again risen significantly compared to the previous year. Mundt reminded households that there are now offers again that are even below the thresholds of the electricity and gas price brakes, reminding them of savings options.
According to the report, electricity disconnections fell by a good 11 percent in 2022 compared to the previous year and amounted to around 209,000. In the gas sector, the number of gas disconnections fell by around 15 percent. A total of around 23,000 blockages were reported in 2022.
The current monitoring report from the Federal Network Agency is available online.
Author: Susanne Harmsen
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