interview
Electricity comes from the socket – if only it were that easy. In fact, trading on electricity exchanges is highly complex. In an interview, the head of the Leipzig trading venue EEX, Peter Reitz, explains how the prices are determined.
tagesschau.de: Who trades on the Leipzig Electricity Exchange?
Peter Reitz: We negotiate wholesale prices. This means that it is the producers, the operators of electricity networks and the large consumers or the distributors who then supply the households. The large electricity companies are of course here, but also small municipal utilities. Trading on the electricity exchange is anonymous. This means that we ensure that all participants are treated equally. This results in the price based on the offers.
tagesschau.de: How should you imagine that? Do the electricity suppliers throw the excess electricity they produce onto the market and then it is bought?
Reitz: That's how it works. We have hundreds of participants who send their bids electronically directly here on the exchange. Of course, producers are then more on the selling side and the large consumers are on the buying side. We will then publish the price so that not only those involved but the general public know what price is being determined for electricity.
To person
Peter Reitz has been Chairman of the Board of the European Energy Exchange (EEX) since 2011. Between 2011 and 2023 he was also CEO of European Commodity Clearing (ECC). Before his appointment, he had been supporting the development of EEX and its clearing house ECC since 2007 as a member of the respective supervisory board.
Peter started his career at the Deutsche Börse in Frankfurt and also worked at Dow Jones Indexes in New York. In 2001 he joined the futures exchange Eurex, where he was a member of the board until December 2018. Peter is a qualified mathematician.
Electricity is always a mixture
tagesschau.de: Who are the big buyers? The industry?
Reitz: These are not the only buyers. The municipal utilities or the distributors who then supply the households are also on the buyer's side.
tagesschau.de: When you buy electricity, can you tell where it comes from? That is, what energy sources underlie this electricity?
Reitz: This is not possible with electricity itself. Electricity is always a mix of the types of generation that are currently available. However, green electricity can be traded separately. This is possible with us at EEX, via so-called certificates of origin.
tagesschau.de: Has there been an increase in people asking about origins?
Reitz: The share of renewable energies has increased significantly. In the first half of this year, we have over 60 percent in Germany from renewable energies. And of course demand determines supply and the composition of the electricity mix.
Price dropped this year
tagesschau.de: What is traded on the EEX and what ultimately comes out of the socket are two different things. How is the final electricity price offered by the electricity supplier determined?
Reitz: It has three components. The first is the wholesale price. This is the primary procurement, so to speak. Then there are the network fees for the end customer, i.e. the prices for transporting the electricity to the points of consumption. The largest share is taxes and duties.
tagesschau.de: How have wholesale prices developed this year?
Reitz: There is no one price for electricity. On the one hand, this of course depends on the area. At EEX you can not only trade electricity for Germany, but also for over 20 countries in Europe, for Japan and, via our subsidiary, also for the USA. The second important criterion is the delivery date. You can buy electricity from us in the smallest unit for 15 minutes. But you can also buy electricity for a whole year, up to ten years in advance. And depending on where and when you want electricity, these are different prices. But in general you can say that the prices have reduced somewhat this year compared to last year.
tagesschau.de: A concern that constantly concerns consumers: Is there even enough electricity?
Reitz: There is enough electricity. This is also due to the fact that we no longer have a national electricity supply market, but rather that the European markets are very closely linked to one another. This means that even if there is less production locally in a country than consumption, this is compensated for at European level. And in Europe as a whole there is significantly more supply than consumption, although of course always at different prices.
The interview was conducted by Stefan Wolff, ARD financial editor.
