Klima-, Energi- og Bygningsudvalget 2014-15 (1. samling)
KEB Alm.del Bilag 255
Offentligt
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DANISH MINISTRY OF
CLIMATE, ENERGY AND BUILDING
IC
Bundesministerium für Wirtschaft und
Energie
mln@nk
E-mail: gruenbuch
strommarkt@ bmwi.bund.de
Comments from Denmark on the Green Paper ‘An Electricity Market for
Germany’s Energy Transition’
Thank you very much for the opportunity to comment on the German Green
Paper “An Electricity Market for Germany’s Energy Transition”. We highly
appreciate the regional approach taken by Germany to inciude neighbouring
countries in the discussions on how to adjust the German power market to the
new challenges.
Germany as well as Denmark has an ambitious energy policy with strong
emphasis on renewables and energy savings. A large and growing share of
electricity is generated by wind and in Germany also by solar energy, which is
affecting the electricity market in both countries. lt creates a new framework for
the functioning of the electricity market which originally was desigried in another
context. However, as it appears from the Green Paper both countries have the
same approach to many of the challenges.
Germany’s energy policy through the country’s size and central geographical
position has a substantial impact on the European common electricity market.
Any decisions made in Germany regarding the future market design, will guide
decisions in neighbouring countries as well. For the future design of the German
energy market we would therefore like to convey the following messages:
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Permanent Secretary
I 6 MARI. 2015
File no.
2015- 381
1) Denmark is strongly affected by internal German decisions
Denmark participates in the electricity market with two price zones, but
since the share of interconnector capacity compared to total production
capacity is large and the Danish market size is small compared to the
German and the Scandinavian markets, electricity prices in Denmark
follow prices in neighbouring price zones. Only 10% of the time annually
Denmark has its own electricity price.
Therefore any additional payments to German power generators will
directly impact the price on the Danish electricity market in a downward
direction. If a capacity market were to be introduced in Germany in the
future, the commercial situation of the German power plants would be
enhanced, while at the same time reducing the viability of the Danish
thermal production portfolio. Implementing a capacity market in
 KEB, Alm.del - 2014-15 (1. samling) - Bilag 255: Orientering om regionalt energisamarbejde og projekt om et nyt markedsdesign på elområdet, fra klima-, energi- og bygningsministeren
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Germany could thus put pressure on Denmark to also consider
introducing a capacity market in our country.
In order to ensure the full functioning of a common European electricity
market it is also very essential to keep the interconnectors open also in
scarcity situations. The potential implementation of a capacity market in
Germany should flot lead to any negative effects on interconnector
availability. Also the usage of interconnectors in times of activation of
strategic reserves should be coordinated in bilateral or regional
agreements.
2)
No regret measures are useful and should be implemented as soon as
possible
In the Green Paper a range of no regret measures are introduced, which
are deemed necessary iridependeritly of the implementation of capacity
payment or market. Denmark supports this approach, i.e. to postpone
decisions on capacity mechanisms and tackle potential short term lack
of capacity through a strategic reserve. In fact, a parallel process of
procurement of a strategic reserve is currently underway in east
Denmark.
Denmark also strongly supports the German ‘Netzentwicklungsplan
(NEP)” process and the high focus on the reinforcement and extension
of the transmission grid in North-South direction within Germany. Any
additional internal grid capacity in Germany will have a positive impact
on the Danish market and help ensure the availability of already built
and planned interconnector capacities.
lncreasing the flexibility of both thermal generation and demand are
other no regret measures that are highly supported by Denmark. Danish
central power plants (coal, gas and biomass) have been very successful
in driving drown the minimum bad through various technical measures,
demonstrating that increased generation flexibility is a possibility as a
very relevant instrument. Regarding increased demand side response,
we are analysing the right incentives at the moment but we are lacking
large and energy intensive industries to act as the main drivers for
technological development.
From the Danish market’s perspective we do not see any immediate
need to increase the technical maximum prices in the spot market.
However, it is essential to ensure investors that there will be no political
intervention, even if prices are high in longer time periods due to
scarcity.
3)
Regional ciusters have pro ven success record in the Nordic region
Regarding the further enhancement and development of the iriterrial
energy market and inclusion of renewable energy in the system it would
be advantageous to put more emphasis on regional cooperation. We
agree that this will enable cooperation not only on interconnectors,
capacity issues and flexible consumption matters but also enable
expansion on valuable cooperation in terms of bringing down the total
system costs.
KLIMA-, ENERGI-OG
BYGNINGSMINISTERIET
Side 2
 KEB, Alm.del - 2014-15 (1. samling) - Bilag 255: Orientering om regionalt energisamarbejde og projekt om et nyt markedsdesign på elområdet, fra klima-, energi- og bygningsministeren
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KLIMA-, ENERGI- OG
Within the Nordic region we have some very positive experience in
planning and decision making in a regional perspective. The current
system of interconnectors in the region is largely a product of looking at
business cases from a regional perspective instead of only from a
national point of view.
We hope these comments are a useful input at the current stage of discussion
of a future electricity market model for Germany. We are looking forward to
seeing the output of this consultation process in the form of the White Paper.
BYGNINGSMINISTERIET
Side 3
Thomas E ebo