S.11. State Aid

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EC launches antitrust case against the largest German TSO

Friday, March 23, 2018


The EC suspects TenneT of deliberately limiting the capacity of the interconnector between Western Denmark and Germany.

 

The EC launched a formal investigation to assess whether the largest German transmission system operator (TSO) TenneT’s limitation of capacity from Denmark into Germany breaches EU antitrust rules. According to the Commissioner in charge of Competition policy, Margrethe Vestager, they “suspect that access is deliberately decreased when too much power is produced”.

The EC has sent to TenneT its preliminary assessment setting out in further detail its competition concerns and currently, according to the EU competition authorities, the EC and TenneT are engaged in “constructive discussions on commitments to address those concerns”. The EC press release further states that, “any potential commitments would need to ensure that the maximum capacity of the interconnector between Western Denmark and Germany would be made available to the market”.

Furthermore, according to the EU antitrust Commissioner “energy should flow freely in Europe so that the electricity produced by a wind mill in one country can reach the consumers in another. [The EC’s] investigation into TenneT is part of [DG COMP] efforts to ensure that electricity grid operators do not unjustifiably restrict the free flow of electricity between Member States, to the detriment of European energy consumers”.

TenneT responded with a press release stating that the German-Danish border suffers from transmission bottlenecks and “transmission capacities in Europe have meanwhile reached their limits during the course of market liberalisation and the energy transition”. Furthermore, according to TenneT’s response, the TSO “proposes to extend the coordinated trading program, which has been gradually increasing the transmission capacity available between Germany and Western Denmark since the middle of last year”.

If proven, the actions of TenneT TSO GmbH, which is a fully-owned subsidiary of the Dutch company TenneT Holding B.V., may breach EU antitrust rules when it comes to the abuse of a dominant market position[1], since it would represent a “discrimination against non-German electricity producers and to a segmentation of the Single Market for energy”.

Finally, according to the EC press release, there is no legal deadline for bringing the antitrust investigation to an end, while “the duration of an investigation depends on a number of factors, including the complexity of the case, the cooperation of the undertakings with the EC and the exercise of the rights of defence”.

[1] Article 102 of the Treaty on the Functioning of the European Union prohibits the abuse of a dominant market position which may affect trade between Member States. The implementation of this provision is defined in the Antitrust Regulation (Council Regulation No 1/2003).