Mez, Lutz --- "New Corporate Strategies in the German Electricity Supply Industry" [2003] ELECD 50; in Glachant, Jean-Michael; Finon, Dominique (eds), "Competition in European Electricity Markets" (Edward Elgar Publishing, 2003)

Book Title: Competition in European Electricity Markets

Editor(s): Glachant, Jean-Michael; Finon, Dominique

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843761785

Section: Chapter 8

Section Title: New Corporate Strategies in the German Electricity Supply Industry

Author(s): Mez, Lutz

Number of pages: 24

Extract:

8. New corporate strategies in the
German electricity supply industry
Lutz Mez

At the end of the twentieth century, the German electricity supply indus-
try was faced with a serious challenge, caused by fundamental changes in
the sector's framework conditions. Global issues such as deregulation,
energy and/or CO2 taxes, privatization and competition have forced the
sector to alter its strategy. The immediate cause was the European Internal
Electricity Market (IEM) directive 96/92/EG of February 1997, as a conse-
quence of which the Act Reorganizing Energy Business Law came into force
in Germany on 29 April 1998, making competition possible at all stages of
the energy sector's value creation chain. As the stable monopoly has been
removed, the sector is facing new kinds of risk.
The electricity supply sector in Germany has, for decades, been an eco-
nomic and political cartel, which effectively obstructed attempts to change
the direction of energy policy at all levels of decision-making. It is consid-
ered to be the most influential group of companies, a `state within a state'.
German electricity regulation traditionally consisted of a mix of public and
private law. The Energiewirtschaftsgesetz, adopted in December 1935 and
laying down the framework conditions for cheap and secure electricity
supply, defined German state control of the sector for more than 60 years.
The other important piece of public legislation for the sector was the
Monopolies Act, which exempted electricity supply. There have been
numerous attempts at reforming the electricity supply ...