Gas market liberalization

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The liberalization of the gas market involves opening up the German natural gas and biogas market to various competitors in order to enable free competition for end consumers. It is an ongoing process in which changes and rules still have to be made.

Theoretical background

Even before the liberalization of the gas market in Germany , the various market players were able to negotiate gas quantities and prices with each other along the entire transport route. Production, transfer and wholesale are the central determinants of the European gas procurement market. The prevailing market conditions before liberalization resulted in a bilateral oligopoly . Not only on the part of the importers , but also on the part of the exporters, there were very few actors .

Before liberalization there were only eight importers and ten producers in the national area. Around 700 regional, municipal and supraregional gas suppliers took care of delivery to end consumers. At the same level, the utilities made agreements on the demarcations. This accordingly led to an agreed distribution of the entire gas supply area. Supply monopolies often occurred at the municipal level . Customers hardly had a chance to change their provider.

Steps towards gas market liberalization

In connection with the liberalization of the gas market, a reduction in monopoly positions was pushed. Politically, natural gas consumers should have two advantages:

  1. Free choice of gas supplier
  2. Permanently falling costs

Former monopolists still have a relatively influential market position to this day, but new companies forced the introduction of competition into the gas market. This included previous electricity suppliers, but also foreign gas suppliers. In addition, companies in the oil sector also strived to establish themselves in the gas market. The already established companies expanded their area of ​​activity regionally and nationally.

Energy law amendment 1998

The 1998 energy law amendment is seen as the beginning of the process of liberalizing the gas market. There, for the first time, consumers were offered the option of choosing who to buy the gas from.

At first, hardly any other competitors streamed onto the market, as was already the case with the equally liberalized electricity market. New competitors saw corresponding blockades to entry into the gas market through long-term supply contracts, cross-subsidies between corporations and market sectors limited by them. There was no organ to regulate and strengthen non-discriminatory entry for new companies. The Federal Network Agency only took over this office from 2005 when it assumed control of the gas networks.

In 2000, the Federal Republic of Germany faced a lawsuit at the European Court of Justice . The lawsuit could, however, be invalidated by the association's commitment to liberalize the gas market. Despite the accompanying commitment to open the network, the opening of the gas market was slow.

To implement the requirements of the European gas directives, the gas amendment was passed in May 2003 with a significant delay. In the guidelines, supply monopolies were classified as illegal. In contrast, monopolies in the supply networks were allowed. Several supply networks that supply the same area in parallel - this is the case in the telecommunications sector, for example - are often not economically viable to operate. It seemed more expedient to give the different market participants the same opportunity to enter the existing network.

Market opening on a theoretical level

In February 2006, gas customers received a signal from the Federal Cartel Office that they would be free to switch suppliers from April 1st. This very rapid market opening was based on an agreement between the Federal Cartel Office and the gas suppliers criticized earlier. The Cartel Office sought abuse proceedings against the gas providers due to significant price increases. The providers E-ON , ENTEGA , MITGAS, RWE , SpreeGas and Thüga AG guaranteed that the long-signaled change would be possible for private customers from now on. As a result, the abuse proceedings against the gas providers were discontinued.

Nevertheless, the gas price for private customers rose by almost 100% from 1998 to 2008.

Rising gas prices

Annual increases were justified by the gas suppliers through the oil price link and growing purchase costs. The oil price link was an industry-internal agreement between gas producers, gas suppliers and importers, whereby international gas traders wanted to adhere to it.

The natural gas goes through a long trade chain until it finally reaches the end consumer . The gas suppliers are also inclined to withhold the various price formulas, as these are not always compulsory for international crude oil prices. This became particularly clear in the 2004/2005 heating period, when the prices for the end consumer rose above average compared to the import prices. This aroused criticism from politicians, the media and consumer associations, as the natural gas wholesalers made immense profits at the same time.

As a result, some consumers stopped paying their bills and went through several legal instances. On June 13, 2007, the Federal Court of Justice decided under file number VIII ZR 36/06 that consumers do not have to be satisfied with the gas price increases and can defend themselves against them. However, tariff increases due to increasing purchase costs are to be approved in principle.

Increase in the number of gas providers

Ten years after the amendment to the energy law, there was a significant increase in the number of gas providers. Compared to the electricity market, which has also been liberalized, the number is still small. Due to a lack of network access, it was still not possible to speak of a functioning competition. There are twelve network zones in Germany, with gas providers having to agree individual contracts with each operator.

In 2008 only around 60% of private households were able to choose an external supplier. Approx. By contrast, 20% of private households were able to choose two external suppliers and only around 5% of the areas supplied had a reasonably intact competition with around nine different suppliers . Today there are around 700 gas suppliers, the majority of which are regional or local. These include the producers of biogas who distribute it via local heating networks.

The large gas transmission companies, which also operate supraregionally, are still dominant ten years after the start of liberalization, some with various subsidiaries. Their share still makes up about half of all gas suppliers.

The development of the gas market from 2010 - today

To date, the variety of gas providers has increased further. End consumers can now choose between various providers practically anywhere. In addition, in 2010 the oil price link was removed, which led to even more competition. However, there were still increases in gas prices between 2010 and 2015. In 2010 a household paid around 6.48 cents per kilowatt hour (ct./kWh). In 2011 the price was 6.64 cents / kWh, in 2012 it was 6.95 cents / kWh, in 2013 it was 7.9 cents / kWh and in 2014 it was 7.20 cents / kWh. In 2015, a counter-trend of 7.11 cents / kWh was identified for the first time.

There are around 20 million households that heat with gas and consume around 140 kilowatt hours per square meter and year, compared to 965 gas providers. From 2016 thanks to the natural gas price, as the purchase prices were correspondingly lower. In the first quarter of 2016, consumers from 215 suppliers were able to look forward to a price reduction of 4.5%. Around 24 suppliers have already announced a price increase of 4% on average.

Individual evidence

  1. ↑ Gas market liberalization: all steps at a glance. July 5, 2016, accessed August 16, 2016 .
  2. ↑ Hans-Josef Allelein, Elmar Bollin, Helmut Oehler, Udo Schelling, Harald Schwarz: Energy technology: Systems for energy conversion. Compact knowledge for studies and work . Springer-Verlag, 2012, ISBN 978-3-8348-2279-6 ( limited preview in Google Book Search [accessed on August 16, 2016]).
  3. ↑ Gas market liberalization: all steps at a glance. July 5, 2016, accessed August 16, 2016 .
  4. ↑ Directive 98/30 / EC of the European Parliament and of the Council of June 22, 1998 on common rules for the internal market in natural gas , accessed on June 6, 2016
  5. ↑ Dr. Stephan Krieger; Michael Nickel: Competition 2012 - Where is the German energy market? BDEW Federal Association of Energy and Water Management e. V., 2012, accessed on July 16, 2016 .
  6. ↑ Joachim Wieland: Legal problems of the gas network evaluation according to the gas network fee regulation . Peter Lang, 2008, ISBN 978-3-631-58542-9 ( limited preview in Google Book Search [accessed August 16, 2016]).
  7. ↑ Gas market liberalization: all steps at a glance. July 5, 2016, accessed August 16, 2016 .
  8. ^ Bavarian State Ministry of Justice: Justice in Bavaria - District Court Munich I - press release 66/07. In: www.justiz.bayern.de. Retrieved August 16, 2016 .
  9. ↑ Gas market liberalization: all steps at a glance. July 5, 2016, accessed August 16, 2016 .
  10. ↑ Gas prices by consumer group up to 2015 | Statistics. In: Statista. Retrieved August 16, 2016 .
  11. ↑ Gas consumer price index: price development for household customers. In: www.verivox.de. Retrieved August 16, 2016 .