Potential supply shortages in Germany between 2023 and 2030

The energy revolution initiated in Germany as well as the energy policy goals of neighboring European countries, the digitization and the rapid technical progress in energy storage are changing the energy industry sustainably. It is to be feared that the current regulatory framework and the design of the electricity market will not take sufficient account of the changed generation and consumption structure in order to ensure a sustainable security of supply.

The Federal Association of the German Energy and Water Industries (BDEW) asked E-Bridge to examine in a short report, which instruments are being used to reliably avoid supply congestions, especially in the period from 2023 to 2030. These tools have been described, discussed and evaluated on the basis of objective criteria. On the one hand, the requirements for their technical, regulatory and legal implementation are taken into account and, on the other hand, the technical, economic or regulatory reasons, which preclude a sufficient security of supply, are named.

The report was divided into two main areas: On the one hand, the focus was on the description of the expected risks for security of supply. In addition, potential instruments to ensure sufficient security of supply have been identified, evaluated and, as a result, appropriate recommendations for action have been formulated.

Three risks were identified within the analysis. Among these risks, the potential underestimation of market and price risks probably has the highest impact on security of supply. To increase security of supply, in addition to an increase in the reserve capacity that is already laid out and planned in the current regulatory framework, two instruments in particular are available: The further development of the security of supply report published by the German Federal Ministry for Economic Affairs and Energy (BMWi) and the development of requirements for a specific risk management system, including potential specifications for specific risk limits.

Finally, the instrument of (regional) tendering of low-carbon generation capacities could be used to compensate for the missing location signals.

The summary report formed a guideline for BDEW for structured discussion with legislators and regulators and other stakeholders through the classification, evaluation and selection of instruments for ensuring security of supply.

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