Table of Content
1. Introduction
2. Historical background
2.1 History of Energy supply
3. European Perspective
4. Current Situation
5. Why Regulation is needed
6. Liberalisation
6.1 Legal background of liberalization
6.1.1 European Single Market policy 96/92/EG
6.1.2 European Single Market policy 200/54/EG
7. Regulation
7.1 Cost-based Regulation
7.2 Why changing it to incentive regulation
8. Incentive Regulation
9. Conclusion
10. References
Regulation of Electric Power in Germany
1. Introduction
The electricity market in Germany was faced with loads of changes since the 19th century, when it all began due to Werner von Siemens (and among others) and his first electric generator. But soon electricity became a public good and the governments realized, that it needed to be provided to every citizen. Therefore many different systems, regulations and deregulations were implemented over time. After a historical overview and a European perspective on the electricity market, we present you the Liberalization process and its cost-based regulation and, as a last point, the change to incentive regulation.
2. Historical background
2.1 The History of Energy Supply in Germany
With the first street light in Berlin in 1884 the history of public energy supply in Germany begun. Following the example of Berlin and other cities in the world, in the next decades other German cities developed an urbanized network of several power stations. Already at the beginning of the 20th century there was laid out the first long-distance cable and there were several German power stations which offered a cheaper price for power at night for consistent capacity utilization. In 1938 the German Energy Industry Act mandated the electricity supply under the supervision of the German Reich, therefore the National Commissioner was then responsible for the price and introduced the first basic fee. Quick after World War II the biggest electricity suppliers reached again the pre-war level, but in 1954 the separation of the electricity grid network of the German Democratic Republic (GDR) and the Federal Republic of Germany (FRG) was conducted and still inflicts some problems today. After that, the first German nuclear power plant “Grunremmingen A” (1966) started supplying electricity to the grid. In 1974...
Inhaltsverzeichnis (Table of Contents)
- Introduction.
- Historical background
- The History of Energy Supply in Germany
- European Perspective.
- Current Situation
- Why Regulation is needed
- Liberalisation
- Legal background of liberalization.
- European Single Market policy 96/92/EG.
- European Single Market policy 200/54/EG
- Regulation
- Cost-based Regulation
- Why changing it to incentive regulation.
- Incentive Regulation
- Conclusion
- References.
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This case study explores the evolution of the electricity market in Germany from the late 19th century to the present, focusing on the regulatory changes that have shaped its development. The paper aims to provide an understanding of the historical context, the European perspective on energy regulation, and the rationale for the move from cost-based to incentive-based regulation. Key themes addressed include:- The historical development of energy supply in Germany
- The liberalization process and its impact on the market
- The role of regulation in promoting efficiency and competition
- The transition from cost-based to incentive regulation
- The European Union's energy policy and its implications for Germany
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter introduces the case study's focus on the German electricity market and its transformation over time. It highlights the significant changes experienced since the 19th century and previews the key themes explored throughout the paper.
- Historical Background: This section provides an overview of the development of energy supply in Germany, starting with the introduction of electric lighting in Berlin. It traces the evolution of the market, including the establishment of long-distance power transmission, the impact of World War II, the emergence of nuclear power, and the reunification of Germany. It also explores the role of the German Energy Industry Act of 1938 and the Federal Tariffs of Electricity regulation of 1974.
- The History of Energy Supply in Germany: This chapter delves deeper into the historical context, highlighting key milestones such as the introduction of the first street lights, the development of urbanized power networks, the construction of long-distance transmission lines, and the establishment of nuclear power plants.
- European Perspective: This chapter examines the European Union's energy policy and its influence on the German electricity market. It discusses the EU's objectives of ensuring security of supply and promoting competition, as well as the challenges of expanding grid infrastructure and dependence on energy imports. The chapter also explores the consequences of opening up the electricity market in various EU member states.
- Liberalisation: This chapter focuses on the process of liberalization in the German electricity market, exploring the legal framework and the unbundling of different business areas. It examines the role of the "Energiewirtschaftsgesetz" of 1998 and the impact of the European Single Market policy on market structure and competition.
- Legal background of liberalization: This chapter delves into the specific legal aspects of liberalization, focusing on the European Single Market policy directives 96/92/EG and 200/54/EG. It examines their role in shaping the regulatory landscape and the internal market for electricity in Europe.
- Regulation: This chapter discusses the different types of regulation applied to the German electricity market, focusing on cost-based regulation and its limitations. It explores the rationale for moving towards incentive regulation, a more market-oriented approach.
- Cost-based Regulation: This chapter provides a detailed analysis of cost-based regulation, explaining its principles and its impact on market outcomes. It highlights the shortcomings of this approach and the need for alternative regulatory frameworks.
- Why changing it to incentive regulation: This chapter argues for the transition from cost-based to incentive regulation, emphasizing the advantages of the latter in promoting efficiency, innovation, and competition. It discusses the rationale for the shift and the expected benefits.
- Incentive Regulation: This chapter explores the principles and implementation of incentive regulation in the German electricity market. It discusses the design and impact of this regulatory framework on market behavior and outcomes.
Schlüsselwörter (Keywords)
The key terms and concepts explored in this case study include electricity market, liberalization, regulation, cost-based regulation, incentive regulation, energy supply, historical development, European Union energy policy, competition, efficiency, and grid infrastructure.- Quote paper
- Carsten Dümichen (Author), 2011, Case Study: Regulation of Electric Power in Germany, Munich, GRIN Verlag, https://www.grin.com/document/203746
