Germany advised to split power market to reflect regional cost differences, potential economic benefits

From Yahoo Finance: 2025-04-29 11:30:00

Germany is considering dividing its electricity market into five price zones to better reflect regional costs, as recommended by ENTSO-E. This could lead to economic benefits estimated at €251m-€339m for 2025. While the split may lower prices in the north, it could raise costs in the south, affecting industrial activity.

The debate over market segmentation has stalled cross-border projects, with Sweden threatening to withhold approval for a new power cable to Germany. EU member states have six months to consider ENTSO-E’s findings before potential amendments. However, Germany’s new government opposes the split due to fears of price hikes in the south.

Despite ENTSO-E’s suggestions, Germany’s primary transmission operators criticize the market split proposal. They argue that it could reduce market liquidity and increase expenses. In contrast, Germany’s energy grid regulator has proposed a plan to save €1.5bn for customers by 2028 through the removal of payments to small conventional power generation units.



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