German power producers trying to get something for nothing

As part of Germany’s preparation for the EU Emissions Trading Scheme, the country’s power generators received free emissions credits under the National Allocation Scheme. However, they are now charging their customers the market price of those credits, as if they had to pay for them themselves. Understandably, the country’s Federal Cartel Office is not best pleased.

Both day-ahead and twelve-month forward prices on EEX, the German power exchange, have risen by a quarter in the first half of August. These wholesale prices are used as the reference for contracts offered to Germany’s industrial users by the country’s power utilities. Therefore, German major energy users (and, eventually, other customer segments of the power market) are looking at another steep increase in their energy costs.

Energy Business Review