Leading political figures from several northern German states are advocating for a restructuring of Germany’s unified electricity price system. According to reports in the “Handelsblatt”, a cross-party group is proposing the dissolution of the current single bidding zone for electricity across the country.
The initiative is supported by prominent leaders including Hamburg’s First Mayor Peter Tschentscher (SPD), Schleswig-Holstein’s Minister President Daniel Günther (CDU), Bremen’s Mayor Andreas Bovenschulte (SPD) and Brandenburg’s Minister President Dietmar Woidke (SPD). They anticipate that differentiated pricing zones could lead to lower electricity costs within their respective regions, potentially at the expense of consumers in states such as Bavaria and Baden-Württemberg, where prices could increase.
Tschentscher explained to the “Handelsblatt” that regional variations in electricity pricing would “provide a strong market-based incentive for sensible regional expansion of electricity grids and renewable energy production, as well as the implementation of innovative technologies”. Günther argues that separate bidding zones would transmit price signals reflecting actual regional supply and demand, allowing market mechanisms to function more effectively.
Bovenschulte described the concept of distinct price zones as economically sound, while Woidke suggested that dividing the country into such zones could offer a solution if progress on grid expansion remains slow.
Germany has faced ongoing scrutiny from European counterparts regarding its adherence to the unified bidding zone. The Association of European Transmission System Operators for Electricity (ENTSO-E) issued a recommendation in late April to dismantle the single German zone. Despite this, the current coalition agreement between the CDU, CSU and SPD reaffirms commitment to maintaining the existing system.