Current contents of the Federal Cartel Office

Market power of large electricity producers has increased significantly – Market Power Report 2024/25

19.02.2026

published on: 19.02.2026

The Bundeskartellamt has today published its sixth report on the conditions of competition in the generation of electricity (Market Power Report). The report focuses on the market power situation in the generation and first-time sale of electricity. The analysis is based on data covering the period from 1 May 2024 to 30 April 2025, representing the first full year after numerous dispatchable power plants were decommissioned in early 2024 due to regulatory requirements.

Andreas Mundt, President of the Bundeskartellamt: “ Our analyses clearly show that the market power of Germany’s leading electricity producers – RWE, LEAG and EnBW – has increased significantly. The exit of dispatchable power plants from the market has a direct effect on competition and market power. Given a decrease in the amount of capacity overall, the remaining plants are more frequently becoming indispensable for meeting demand. ”

This development is primarily due to a considerable reduction in dispatchable generation capacity available on the market. The temporary reactivation of grid reserve power plants, mandated by legislation passed in 2022 following Russia’s illegal war of aggression against Ukraine, ended as scheduled in early 2024. This marked the return to the original coal phaseout plan.

When assessing market power in the market for the first-time sale of electricity, merely looking at market shares is not particularly informative. Unlike in other markets, power plant operators may be able to exert considerable influence on market prices even if their market share is relatively low. Therefore, the Bundeskartellamt focuses on how many hours an electricity producer was indispensable (pivotal) for meeting electricity demand. If a producer’s proportion of pivotal hours exceeds a threshold of five per cent of all hours in a year, this indicates a dominant position. The most recent findings of the Market Power Report show that RWE clearly exceeded this threshold. LEAG was also found to exceed the presumption threshold. EnBW was close to the threshold, but did not exceed it.

Given this situation, the report is also critical of proposals to split the German-Luxembourg electricity bidding zone, as this would strengthen the market power of large suppliers even further.

The finding that a company has a dominant position affects the way it is legally permitted to behave in the market. In particular, dominant power plant operators are not allowed to systematically withhold generating capacities to drive up prices. Such behaviour would constitute an abusive practice and is prohibited under competition law. However, the Market Power Report itself does not include a formal determination of a dominant position, as such a finding requires a specific examination of the individual case.

The market power situation is not expected to ease in the short term. The federal government has announced tenders for the subsidised construction of new dispatchable power plants; however, due to long construction times, these are not expected to appreciably increase capacity for a few years. Furthermore, their effect on competition will depend crucially on which companies will operate the new power plants.

Andreas Mundt: “ The outcome of the upcoming tenders for the construction of new power plants will have a significant effect on market concentration over the next few decades. The tenders should therefore be used to systematically reduce existing market power. To ensure a sufficient number of competitors in the market, it would be useful to limit the proportion of the total tender capacity awarded to each bidder to ten per cent. Increased competition in electricity generation markets will have a positive long-term effect, most notably in the form of lower prices for consumers.”

The Market Power Report notes that dispatchable electricity generation capacity in Germany has declined considerably. This is due to the end of the temporary reactivation of reserve power plants in spring 2024, as well as further decommissioning, particularly in the context of the coal phase-out. A scarcity of capacity tends to lead to higher prices and increased dependency on large suppliers in the first-time sale of electricity. It also increases the importance of electricity imports during periods of low wind and solar generation.

Growing capacity scarcity also affects market development. During periods of high demand and low renewable energy generation, dispatchable power plants become indispensable in an increasing number of instances. At the same time, there are more frequent and more pronounced peaks in short-term electricity wholesale prices, particularly during the winter months and in the early morning and late evening hours. However, the Bundeskartellamt and the Bundesnetzagentur’s investigation into price peaks during the so-called “dunkelflaute” periods in late 2024 found no indication of capacity being abusively withheld. The decisive factor was rather a shortage of dispatchable capacity.

At the same time, the integration of the European electricity market has become significantly more important for Germany’s electricity supply. Imports were the only market-based means of fully meeting Germany’s electricity demand in almost a quarter of the hours covered by the report. Although the possibility of imports can limit market power, their effectiveness depends on the availability of cross-border transmission lines and foreign spare generating capacities.

The report also examines the market situation regarding balancing services. Overall, there have been no major changes compared with the previous reporting period. EnBW continues to play a leading role in this market, particularly in providing capacity for specific balancing services.

The full report on market power in the electricity generation sector can be downloaded here (in German).

The Bundeskartellamt has a statutory responsibility to publish a report on the conditions of competition in the generation of electricity at least once every two years. The Market Power Report aims to help market participants assess whether they may be considered a dominant company within the meaning of Section 18 of the German Competition Act (GWB) or Article 102 TFEU, and thus be subject to abuse control under competition law.