Bundeskartellamt initiates abuse control proceedings in the electric heating sector (night storage heating and heat pumps)

The Bundeskartellamt has initiated abuse control proceedings to examine price structures in the supply of consumers with electricity for night storage heating and electric heat pumps. The investigation focuses exclusively on the market for heating electricity, which the Bundeskartellamt defines as a separate market. Heating electricity is supplied at special tariffs and predominately at night time for use in night storage heaters and for operating heat pumps. There are virtually no alternative suppliers in this market and hence no possibility for customers to switch their supplier.

The proceedings are being conducted based on the so-called "comparative market concept“ by which the prices or profits of the heating electricity suppliers are compared. Rather than examining the price increases of individual suppliers, the Bundeskartellamt compares their price levels with those of other low-cost comparable companies.

In the market for heating electricity the annual consumption of private end consumers, subject to outdoor temperatures, is approx. 20 billion kW hours. In Germany approx. 4 % of all homes are electrically heated, in absolute numbers the equivalent of approx. 2 million homes. The heating electricity suppliers concerned and the five low-cost comparable companies contacted by the Bundeskartellamt, supply approx. 1.2 million households. The companies concerned are located mainly in southern and western Germany, where night storage heating and heat pumps are more widely used. The Bundeskartellamt is competent for approx. 30 of around 700 electricity suppliers throughout Germany.

The Bundeskartellamt would like to point out that the proceedings do not concern the supply of consumers with “normal” household electricity where customers have adequate possibilities to switch to another supplier.

In view of the complexity of the proceedings, first results can only be expected in Spring 2010.