October 2025 |
251003 |
ENERGY CHRONICLE |
On October 21, the Federal Network Agency and the Federal Cartel Office presented a report on the explosive rise in wholesale electricity prices that occurred on the spot market of the stock exchange in November and December of last year. Both authorities concluded that although this price increase was caused by a shortage of controllable power plant capacity in Germany, it was not due to deliberate market manipulation.
“Dark doldrums, such as those that occurred in November and December 2024, will continue to occur in the future,” the Federal Network Agency emphasizes at the end of the report. In order to be able to maintain sufficient generation capacity for such situations in the long term, legislative measures for the expansion of controllable capacities remain urgently needed. Furthermore, the network data basis must be improved in order to be able to assess such situations more quickly and better in the future. Above all, there is a need for “more precise information on effectively available generation capacities and their unavailability” as well as on the values for feed-in to grids other than those for general supply.
In addition to December 11 and 12, 2024, when the day-ahead price per megawatt hour rose to €1,000 for 13 hours (241201) the report examines a similar high-price phase from November 5 to 7, 2024, when prices briefly reached €1,400. In both cases, due to a prolonged “dark doldrums,” increased demand for balancing energy could not be met with electricity from domestically available controllable power plants. It was therefore necessary to resort to imports, which were so expensive that the price per megawatt hour rose to twelve times the monthly average.
The cause of the price increase was clear in this respect. However, the question arose as to why so little controllable power plant capacity was available to cover the increased “residual load.” After all, “dark doldrums” are nothing unusual. They occur several times a year, especially during the cold season. They are entirely manageable and do not pose a threat or even a collapse of the power supply, as the term is often misunderstood. In any case, however, this requires that the necessary instruments of controllable power plant capacity be kept available.
Although these necessary instruments were theoretically available during both high-price phases, they were not sufficiently available in practice, which is why the only option was to resort to expensive imports. In this respect, there was a failure of electricity management that must not be repeated. This then raised the further question of whether this failure was due solely to negligence or – horribili dictu – to the greed of power plant operators who wanted to drive up both the price of balancing energy and the resulting wholesale price by artificially creating a shortage of power plant capacity.
Such trickery would be a flagrant violation of the REMIT Regulation on “Integrity and Transparency of the Energy Market,” which was enacted in 2011 to prevent insider trading and price manipulation (110903). The Federal Cartel Office was also called upon to investigate the suspected violation of antitrust regulations.
Both authorities have now given the all-clear in this regard, after the January 2025 report by the Federal Ministry of Economics did not investigate this aspect at all, but simply ignored it due to the difficulty of the necessary investigations (250111). They cite the following as “key findings for the five days in question”:
•The investigations carried out into power plant utilization and electricity supply did not reveal any evidence of a violation of antitrust law or REMIT.
• Controllable power plant capacities were utilized at a significantly higher level than was reported in the media immediately after the event.
• A secure electricity supply was guaranteed at all times.
However, the third point was never in question anyway. The second point simply states that media reports contained exaggerated estimates of the available but unactivated power plant potential. And the main finding formulated in the first point is not an acquittal based on 100% proven innocence, but rather due to lack of evidence.
The Federal Network Agency did find evidence “that individual bidders did not bid purely on the basis of marginal costs in the shortage situation". However, a bid above marginal costs is not in itself a REMIT violation: "The Energy Only Market is designed in such a way that companies can generate contribution margins in periods of shortage. These contributions serve to refinance investment costs and create incentives to invest in peak load power plant capacities and flexibility options. A REMIT violation would only be assumed if the circumstances of the individual case indicated this."
Similarly, the Federal Cartel Office points out how difficult it is to verify the actual unavailability of a power plant and to distinguish it from deliberate market manipulation: "Unavailability generally results from a complex interplay of technical and economic factors. Verifying the reasons given for unavailability is therefore just as complex. In particular, the circumstances must be assessed on a case-by-case basis for each individual power plant. From the perspective of an investigating authority, it is therefore not possible to conclude with absolute certainty for every single reported case of unavailability that the power plant in question was correctly reported as unavailable."