Legal Admissibility of Price Peaks in the Electricity Market 2.0: Joint Guidelines by BNetzA and BKartA


By adopting the Electricity Market Act (Strommarktgesetz) in 2016, the German legislator has opted for an elaborated Electricity Market 2.0 based on market mechanisms and against the introduction of a capacity market. Since then, Section 1a (1) Energy Industry Act (EnWG) has included a commitment to free pricing based on competitive principles and against regulatory price caps. The operators of conventional peak-load power plants, which are indispensable for ensuring security of supply, must be able to refinance their plants primarily via so-called “price peaks” in the electricity market. Bids above the specific marginal costs are vital in order to be able to generate the necessary contribution margins during the short periods of operation on the electricity market – primarily during peak loads or dark lows.

Although price peaks are thus a basic prerequisite for refinancing power plants in the Electricity Market 2.0, their targeted triggering by undertakings with market power may constitute conduct prohibited by antitrust law. In order to ensure greater legal certainty for the market players involved, the Federal Cartel Office (Bundeskartellamt – BKartA) and the Federal Network Agency (Bundesnetzagentur – BNetzA) published their final joint “Guidelines for the control of abusive practices in the electricity generation and wholesale trade sector” on 27 September 2019. The first part of the guidelines deals with the admissibility of price peaks and peak load pricing with regard to the antitrust rules on abuse of dominanc (Art. 102 TFEU and Sections 19, 29 GWB) with the BKartA as the competent authority. The second part addresses trade-specific abuses according to the REMIT-regulation (EU) No. 1227/2011 under the supervision of the Market Transparency Unit (Markttransparenzstelle) for wholesale electricity and gas markets established at the BNetzA.

Admissibility under antitrust law (BKartA)

Only companies with a dominant market position can be considered as addressees of the antitrust abuse provisions (Art. 102 TFEU, Sections 19, 29 GWB). Accordingly, non-dominant companies are not restricted in their pricing and capacity restraint by the abuse prohibition.

  • With regard to the appraisal of a dominant market position, the market power report of the BKartA pursuant to Section 53 (3) sentence 2 GWB will have to be taken into account on the data basis provided by the Markttransparenzstelle. The relevant market comprises the electricity sales market (excluding EEG generation and balancing energy) as well as the joint market areas of Luxembourg and Germany. The BKartA intends to decide whether Austria constitutes an independent relevant market after the bidding zone separation on 1 October 2018 with regard to future market effects in its market power reports. In the opinion of the BKartA, the special features of the electricity market also require a so-called “pivot analysis”. . This involves determining over the observation period of one year whether a supplier is indispensable for meeting demand. In line with the Sector Inquiry of 2011, the value of 5 percent of the hours of a year (in total 438 hours) is still regarded as an appropriate benchmark for the presumption of dominance.
  • The BKartA regards a capacity restraint as abusive if actually available electricity generation capacities which could be sold at a price above the respective short-term marginal costs (i.e. which are ‘in the money’) are not used. Redispatch services pursuant to Section 13a EnWG are currently not taken into account for the marginal cost calculation. However, this could change if genuine “redispatch markets” are introduced in future on the basis of the new Internal Electricity Market Regulation (Art. 13 (2) Regulation (EU) No. 2019/943).
  • However, it is possible to justify a capacity restraint objectively on the basis of the circumstances of the individual case. From the companies’ point of view, the justification explicitly mentioned by the BKartA for the lack of full cost recovery is to be welcomed. Due to the ever shorter operating times of residual load power plants, it is by no means guaranteed that a company can actually cover the full costs of its power plant park. However, with the full cost approach, all revenues within and outside the electricity market 2.0 must be taken into account, i.e. also remuneration for the provision of grid balancing energy or for redispatch services.

Admissibility under REMIT (BNetzA)

The “Regulation on wholesale energy market integrity and transparency” (EU) No. 1227/2011 (REMIT) prohibits insider trading and market manipulation in the electricity wholesale market (cf. Art. 3 and Art. 5 REMIT). The supervision of the wholesale trade in electricity and gas pursuant to Article 7(2) REMIT lies in the hands of the Markttransparenzstelle (Sections 47a et seq. GWB), which is located at the BNetzA.

In contrast to the antitrust law assessment, REMIT always examines the individual transaction or trading order. The addressees may also be undertakings not dominant in the market.

Speculative transactions (“betting”) as such are not yet market manipulation. In addition, there must always be a manipulative conduct, whereby the BNetzA considers misleading signals, an artificial price level or loss-making transactions as indications of economically irrational behaviour on the part of market participants. From previous practice, the BNetzA lists the following examples of manipulative conduct:

  • Manipulation of reference values;
  • Disguising of real trading intentions (“layering” and “spoofing”);
  • Misleading signals and artificial price levels (“quote stuffing”);
  • Fictitious transactions (“wash trades”).


The guidelines provide a welcome clarification between the admissible generation of margins by peak load pricing in the Electricity Market 2.0 and inadmissible capacity restraint/market manipulation and thus provides more legal certainty. The continuous shutdown of conventional power plants from the market, recent concentration tendencies (such as RWE’s acquisition of E.ON electricity generation assets or the likely tightening of the relevant geographic market as a result of the separation of the Austrian bidding zone) and constantly rising wholesale electricity prices may increase the incentives and possibilities for illegal conduct and price increases.

Fundamental shortcomings of the antitrust assessment approach and/or practical difficulties in providing evidence will most likely only emerge in the course of antitrust proceedings. Prominent criticism was already voiced by the Monopolies Commission (Monopolkommission), which a few days before the publication of the Guide in its “7th Sector Report Energy” had spoken out in favour of a market definition based on (quarter) hour intervals, stricter supervision of power plant outages and against the possibility of justifying capacity restraint with full cost undercoverage. With regard to REMIT, the system imbalances in June of this year, which may also have been attributable to speculative transactions (short selling) by individual market participants, illustrate the importance of effective market supervision by the Markttranzparenzstelle to accompany the Energiewende.

(24 October 2019)