The chief executive of German energy giant RWE, Markus Krebber, has voiced opposition to proposals from European transmission system operators to divide Germany into five electricity price zones.
Krebber argues that studies conducted by European authorities demonstrate only marginal benefits to such a division. He highlighted that these studies also failed to adequately account for the significant adaptation costs associated with transitioning to a new system, as well as the considerable investment uncertainty it would create. This position aligns with calls from Bavarian Minister President Markus Söder and Baden-Württemberg’s Minister President Winfried Kretschmann to maintain nationally uniform electricity pricing.
Instead of pursuing price zoning, Krebber emphasized the need for government focus on core infrastructure development. He identified network expansion, the deployment of storage technologies and strategic construction of gas-fired power plants as key solutions to address energy challenges. He referenced a similar evaluation undertaken in the United Kingdom several years ago, which ultimately led to the retention of a single electricity price zone.
The proposal for dividing Germany into five price zones, based on a study by European transmission system operators, estimates annual savings of €340 million by reducing the need for costly interventions from gas-fired power plants for price stabilization. The analysis suggests lower electricity costs in regions with strong renewable energy generation – primarily in northern and eastern Germany – while costs would likely increase in southern Germany. However, Krebber notes that the underlying data used in the report is from 2019 and does not reflect more recent developments in renewable energy capacity expansion and new transmission line construction.