WindEurope has voiced concerns over a recommendation in a new European transmission study suggesting that Germany should be divided into five separate electricity bidding zones, warning that such a move could deter investment in renewable energy projects.
The proposal stems from the Bidding Zone (BZ) Study conducted by Europe’s electricity transmission system operators (TSOs) under the coordination of ENTSO-E and the EU Agency for the Cooperation of Energy Regulators (ACER). The study evaluated 14 alternative bidding zone configurations for both Central and Northern Europe with a focus on economic efficiency for the target year 2025.
The simulation results indicated that all proposed configurations splitting the current Germany–Luxembourg bidding zone would result in higher economic efficiency, with estimated gains ranging from €251 million to €339 million. The scenario involving five separate zones in Germany showed the highest projected efficiency improvement.
WindEurope, representing the wind energy industry, warned that while economic benefits might appear favourable, the impact on investment security should not be overlooked. “There may be arguments for splitting up existing bidding zones in electricity markets,” said Giles Dickson, CEO of WindEurope. “But it would increase uncertainty about the future revenues of power plants. And that would undermine investments in new renewables.”
“Building more renewables is top priority right now. It needs huge investments,” Dickson added. “Which needs maximum possible certainty. Don’t make things even harder by adding new uncertainty.”
Bidding zones are areas within electricity markets where power can be traded without considering grid constraints. The study’s objective was to identify configurations that would enhance economic efficiency, support cross-border trading, and maintain system reliability.
In addition to the German-Luxembourg zone, the study found a modest economic benefit (€9 million) from a split of the Dutch bidding zone, while alternative configurations in France and Italy resulted in negative efficiency outcomes. In the Nordic region, none of the proposed changes surpassed the current system in terms of efficiency, with results ranging from a €2 million to €35 million decrease.
To further involve stakeholders, ENTSO-E and participating TSOs will host a webinar on May 6, 2025, to present and discuss the study’s findings and potential implications.
