Germany is preparing to restructure its energy market in preparation for the transition to low-carbon production.
Discussions are focusing on the type of market to be adopted to encourage the construction of new gas-fired power plants, designed to compensate for the intermittent nature of renewable energies.
The German government, through its Ministry of Economics, has launched a consultation to determine the best market model.
Among the options considered, a decentralized model based on the purchase of energy certificates is favored.
However, this approach is meeting with criticism, particularly fromUniper SE, which is advocating a centralized model.
The challenges of the decentralized model
The decentralized model supported by the German government is based on regional diversity and the ability of each player to adapt to local conditions.
This model involves the purchase of certificates to support investment in new energy capacity.
Nevertheless, this system is perceived as too complex and opaque by some market players.
Investors’ difficulty in understanding the mechanism could slow down the financial commitments needed to develop new energy infrastructures.
Michael Lewis, CEO of Uniper, criticizes this choice, arguing that a decentralized model delays decision-making and complicates investment processes.
In his view, a centralized market, where energy suppliers participate in auctions for long-term contracts, would offer greater visibility and stability to investors.
This position reflects concerns about Germany’s ability to rapidly attract the funds needed to meet its energy transition objectives.
Comparative European market models
In Europe, several countries have already introduced centralized capacity markets, including Italy, Belgium and the UK.
These models enable energy producers to receive a fixed remuneration for the availability of their facilities, irrespective of actual electricity production.
This type of market is often cited as an example of transparency and predictability of investment costs, making it easier to decide on the financing and construction of new power plants.
Uniper recommends that Germany follow the British model.
This is based on an auction system that enables prices to be determined competitively, revealing the real costs of maintaining available capacity.
This system has proven its effectiveness in guaranteeing supply while controlling costs.
Uniper believes that this model could meet Germany’s specific needs, particularly in the context of the planned phase-out of coal by 2030.
Impact on Germany’s energy transition
The choice between a centralized or decentralized market has direct implications for Germany’s energy transition.
The goal of moving away from coal by 2030 depends largely on the country’s ability to attract rapid investment in low-carbon infrastructure.
A slow decision-making process or a lack of clarity on the market model adopted could jeopardize this objective.
The integration of a centralized capacity market would simplify remuneration mechanisms and reduce uncertainty for investors.
Gas-fired power plants, as transitional energy sources, require clear financial guarantees to justify long-term investments.
In this respect, a centralized market would offer a more suitable framework, favoring coherent planning and faster decisions.
Reactions in the energy sector
Opinions differ within the German energy sector.
Some players argue that the decentralized model would enable greater flexibility and better adaptation to local realities, particularly with regard to the integration of renewable energies and grid management.
However, others, such as Uniper, believe that the clarity and simplicity of a centralized market are necessary to ensure efficient and sustainable investment.
Political perspectives will play a crucial role in this decision.
As Germany strives to enhance its energy security while reducing emissions, market design choices will have repercussions not only on national strategies, but also on the future direction of the European Union’s energy policy.
