German firm criticised for keeping Danish power from energy market

A German company reportedly put the brakes on export of energy by Denmark for a number of years, prompting a review by European Commissioner for Competition Margrethe Vestager.

German firm criticised for keeping Danish power from energy market
File photo: Mathias Løvgreen Bojesen/Scanpix 2017

The case touches on EU principles on creating an equal internal market for energy, newspaper Jyllands-Posten reports.

Danish industry representatives say they hope Vestager’s commission will use the case to highlight EU free market principles, including for energy.

“This is equivalent to someone in Germany preventing export of bacon or Lego from Denmark. That’s not allowed either,” Carsten Chachah, special consultant with interest organisation Dansk Energi, told Jyllands-Posten.

“Denmark is good at producing green energy and establishing it. But that requires a functional market,” Chachah added.

The issue relates specifically to German transmissions company TenneT, which has since 2011 regularly provided reduced capacity than was available for electricity transmission between Jutland and Germany.

Capacity was in some instances reduced to as little as five percent of potential, according to the report.

That has resulted in losses of up to 500 million Danish kroner (67 million euros) annually for Nordic energy producers, Dansk Energi said.

A formal inquiry into the issue was initiated by Vestager in March.

The European Commissioner, a Danish politician, said at the time that it was “crucial that electricity connections remain open for cross-border trade”.

Negotiations over the electricity market are currently ongoing between EU countries.

Danish Minister for the Environment Lars Christian Lilleholt told Jyllands-Posten in an email that “Denmark supports the application of the principle of free movement of goods to electricity trade.”

A spokesperson for TenneT noted in an email the company temporarily offered a minimum-capacity connection and is currently awaiting an outcome in the inquiry.

READ ALSO: Denmark set wind power record in 2017: ministry 


German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.