EU member states have a six-month window to deliberate on ENTSO-E’s findings.
ENTSO-E’s analysis evaluated various scenarios for restructuring Germany’s electricity market and concluded that all options could offer economic benefits. Dividing the market into five bidding zones was identified as potentially the most cost-effective approach, with estimated costs ranging from €251 million to €339 million for 2025. This segmentation could lower electricity prices in northern regions, where renewable energy production is abundant, but may lead to higher costs in southern areas, where industrial energy consumption is greater.
The proposal has sparked debate, as market segmentation has implications for cross-border infrastructure projects. For instance, Sweden, which operates its electricity market in four zones, has indicated it will not approve a new power cable to Germany unless the German market is restructured. EU member states have a six-month period to review ENTSO-E’s findings. If no agreement is reached, the European Commission may propose changes to the bidding zones.
Germany’s recently formed coalition government has expressed reservations about the proposed market split, citing concerns that higher prices in the south could impact industrial operations. Germany’s main transmission system operators—50Hertz, Amprion, TenneT, and TransnetBW—have also voiced criticism of the ENTSO-E report. They argue that it relies on outdated data and offers limited benefits relative to the overall costs. “A market division could diminish market liquidity and escalate expenses,” the operators stated, highlighting potential drawbacks of the plan.
In a separate development, Germany’s energy grid regulator, the Bundesnetzagentur, proposed a plan in April 2025 to achieve savings of €1.5 billion for power customers between 2026 and 2028. This initiative involves discontinuing payments to small conventional power generation units, aiming to reduce costs for consumers while supporting the transition to a more efficient energy system.
The discussion around market zoning reflects Germany’s efforts to balance regional energy needs with economic and environmental goals. The outcome of the deliberations will shape the country’s electricity market structure and its integration with European energy systems, influencing both domestic consumers and cross-border energy cooperation.
