The German Federal Cartel Office has accused RWE of having unlawfully included the costs for CO2 in the electricity price for industry customers between 1 January 2005 and 31 December 2005. RWE today received a statement of objections, is examining the accusations and will respond as required by the end of February.
RWE strongly objects to the view taken by the Federal Cartel Office. Its arguments ignore the basic facts about how prices are determined in a competitive market and disregard fundamental market instruments that are essential for a successful climate policy in Europe.
The emissions trading scheme can only work if prices for CO2 allowances are part of the economic calculation of when to utilise various power plants. The emissions trading scheme implies politically driven effects on electricity prices. This is the only way in which climate protection policy can be moved forward through energy saving mechanisms and investments
in more efficient production sites.
As is the case on the wholesale electricity market, the price for allowances is determined by supply and demand. There is a European-wide market price for CO2 allowances. The price for CO2 allowances is included in all European electricity markets. It is incomprehensible why this mechanism, which can be observed across all European countries, should infringe upon anti-trust law only in Germany.
Respected economists confirm that CO2 allowances should be included in electricity pricing – regardless of whether they have been allocated, bought or acquired by auction. Among others, Prof. Axel Ockenfels, winner of the prestigious German ‘Leibniz Prize’ for research, and the
former President of the German Monopolies Commission, Prof. Martin Hellwig, have pointed out that the costs for CO2 allowances are reflected in electricity prices. In various publications, both have contradicted the Cartel Office in its opinion that CO2 allowances should not be included either in whole or in part in electricity pricing.