Overview

• Entso-E's study proposes dividing the German-Luxembourg electricity bidding zone into five price areas, citing potential annual welfare gains of €339 million.
• The recommendation aims to address costly north-south transmission bottlenecks and reduce redispatch costs, which reached €2.7 billion last year.
• Germany must meet the EU-mandated target of 70% cross-border transmission capacity by the end of 2025, up from 41% in 2023, or risk an EU-imposed zone split.
• Political leaders in Bavaria and industry groups strongly oppose the proposal, warning of higher prices in the south and economic uncertainty for businesses.
• The federal government, committed to maintaining a unified bidding zone, has six months to present an alternative plan or face potential intervention by the European Commission.