The Role of Power Supply Contracts in the Energy Transition
Like many other countries with similarly ambitious renewable energy targets, Germany faces the mounting challenge of ensuring the security of power supply, i.e., making sure that fluctuating renewable power consumption always matches demand. Demand side management - the curtailment of power consumption when (renewable) energy is scarce - is arguably the cheapest means of contributing to that balance. However, virtually all power consumers continue to pay the same for their energy consumption at all times, regardless of meteorological or other power market conditions, and therefore have no incentives to adjust their behaviour. This research project will investigate the legal, technical and societal preconditions and obstacles to exposing consumers to electricity price risks through variable power supply contracts, which are already market practice in several other European contries. To the extent that such mechanisms can also be implemented in Germany, power consumers can assume a more active rule in ensuring security of supply more cheaply on the path to a more sustainable energy supply.