Key ideas for the energy market of tomorrow

The energy turnaround is fundamentally restructuring the energy supply in Germany. However, its success is being hindered by the current operating conditions for energy markets and funding systems. EWE has developed proposals for an energy market reform.

The sustainable restructuring of the energy supply is not just about overcoming the challenges of climate change; it is also about creating new economic prospects for Germany. Nevertheless, recent debate has been dominated by rising costs, delays and the insufficient level of integration between the various components. To ensure that the energy turnaround succeeds, the operating conditions for the energy supply need to be reformed – almost all of the stakeholders in the political and economic arena agree on this. However, the question of how this reform should look remains unanswered.

As a forerunner in the field of renewable energies and intelligent networks, EWE wants to make a constructive contribution to the debate and has developed some key approaches to reforming the energy market. The focus of these is on greater flexibility to utilise the network more effectively, a fairer distribution of costs and consistent integration of renewable energies into the market.

The key ideas in brief:

Direct marketing for renewables

With regard to renewable energies, a shift from subsidies to market mechanisms is needed. The introduction of mandatory direct marketing for new renewable energy facilities is the right step and needs to be embedded holistically in a reformed energy market. Such a market should provide stimuli for high flexibility on the supply- and demand-side, including tolerating extreme peaks and valleys in the spot market price and an easier access of renewables to the operating reserve.

Securing supply in an efficient manner

To compensate for fluctuations in wind and solar energy, conventional power plants will continue to play a role in maintaining a secure and reliable electricity supply in the future, too, until at least the early/mid 2020s. EWE therefore believes in the creation of reserve capacity, a service that should be put out to tender for all suitable power plants in a fair manner and at an adequate and reasonable price. The creation of a separate capacity market, however, should only be a last resort in case that cheaper and more efficient solutions will not suffice to secure the supply.

Modernise network regulation for intelligent networks

Network regulation needs to be modernised so that it is more closely aligned to the requirements of the energy turnaround. EWE would like to see the speedy elimination of the delay in recognising investments in distribution networks that is inherent to the incentive regulation. Investments in intelligent networks also need to be recognised in the regulation. Also, stimuli need to be provided for flexible power generators (i.e. CHP) and users (i.e. cold store or production plants) to attune their behavior to the situation in the grids and on the spot market.

Strengthen European emissions trading

To maintain the effectiveness of emissions trading, structural political measures should be taken. EWE believes that emissions trading needs to be better coordinated with other climate protection instruments. With regard to a European energy and climate policy, EWE advocates mandatory minimum targets for the year 2030 to reduce CO2 and expand renewable energies.

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