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German Power Traders demand Implementation of EU Law in Balancing Group Management

Optimax Energy and 16 German power traders for renewable energies, who place well over 45 gigawatts of solar and wind power on the power exchanges every day, fear negative effects on the market integration of renewable energies due to the current legislative proposal for the new German Energy Industry Act. This is because the planned amendment places traders of fluctuating electricity producers such as photovoltaics and wind power under general suspicion if their balancing group is unbalanced. A balancing group is an account for electricity and one or more balancing groups are assigned to each actor in the energy system. In these balancing groups, all feed-ins and offtakes as well as all trading transactions are documented and registered with the transmission system operator. However, an infallible forecast of the feed-in of fluctuating generation is not possible, so that remaining balancing group deviations are unavoidable. The transmission system operator accounts for these by charging balancing energy. From the point of view of the joint German power traders, the existing incentive system for balancing group compliance has proved extremely successful and has supported the virtually trouble-free integration of the massively increased capacities of renewable energies without any negative effects on the quality of supply.

In contrast, the wording of the planned amendment in section 20 (1a) sentence 9 of the German Energy Industry Act (EnWG-E) postulates that an unbalanced balancing group in itself indicates a violation of the obligation of balancing responsible parties (BRPs) to maintain a balanced balancing group. Power traders of photovoltaics and wind thus run the risk of being legally prosecuted for 96 quarter hours per day and 35,040 quarter hours per year because they forecast and trade fluctuating electricity generation.

The planned amendment is all the more incomprehensible because it diametrically contradicts the already existing European legislation. The current EU law has recognised the incentives of the balancing energy system as well as the important interaction of all market players in terms of system stability and already defined the obligations of the balancing responsible parties in 2017 in the Electricity Balancing Guideline (EB-GL) accordingly. This is because, in addition to intraday balancing group adjustments, EU law provides for the alternative of allowing balancing group deviations if this is aimed at supporting the system as a whole. Optimax Energy fears negative effects on the energy transition if the amendment to the German Energy Industry Act is not adapted to the EU guidelines. We see the danger that the achieved progress in forecasting, trading and balancing of renewable energies will be reversed and that the electricity market will not be fit for the integration of the huge capacities of solar and wind power that will enter the electricity system in the coming months and years. Therefore, we appeal to the legislator not to carry out the planned adjustment of the requirements for balancing group management, but rather to harmonise the already applicable EU law with the German requirements for balancing group management. The joint position paper of the 17 German power traders with further background information, examples and demands is publicly available. The signatories of the position paper are Axpo Deutschland GmbH, BayWa r.e. Energy Trading GmbH, Centrica Energy Trading AS, CF Flex Power GmbH, Danske Commodities A/S, Energi Danmark A/S, enspired GmbH, Energy2market GmbH, MVV Trading GmbH, Next Kraftwerke GmbH, Optimax Energy GmbH, PURE Energy GmbH, Statkraft Markets GmbH, Sunnic Lighthouse GmbH, Trailstone Renewables GmbH, Volkswind GmbH, and Wind Energy Trading WET AG.


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