Liberalising Electricity Markets in Germany

History, development, and current status of Germany‘s Electricity markets

  • Project Duration: 01/2019 - 12/2019

Many countries are committed to liberalise their energy markets. The reasoning behind liberalised markets has always been to foster competition amongst market participants, enhance the efficiency of the market and through this achieve lower end-consumer prices. Furthermore, highly competitive short-term markets are seen as a central tool to successfully integrate wind and solar energy. Germany was one of the early movers to transform its energy system from a monopoly to a liberalised electricity market. In fact, the process started in 1996. The German wholesale power market of today is well-functioning, very liquid and integrated with most of the European neighbour markets. It delivered cost-reductions while the German power system is one of the most reliable of the world. Thus, all in all the liberalisation is considered a great success. However, even after more than three decades, the complex process is still ongoing.

In this project, we attempt to shed some light on the market liberalisation process in Germany. It is meant to be an introduction, to give an overview, and to point out some key topics and developments. Our aim is to boil down the complexity of the market liberalisation process in a way that allows non-experts to read and understand, and to help finding answers on their own questions from their respective national background.

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