Dusseldorf By 2023, 1,100 federally funded fast-charging locations with regulated sales prices for electricity are to be created. This “Germany network” is one of the largest infrastructure projects in Germany.
A total of two billion euros are earmarked for this in the federal budget. It was conceived by the former Federal Transport Minister Andreas Scheuer (CSU), and now his successor Volker Wissing (FDP) is continuing it.
But companies want to bring down the project in its current form and have lodged complaints with the EU Commission. To be more precise: at the Directorate-General for Competition (DG Competition), part of the Commission responsible for competition.
The complainants include the charging station operator Allego, according to figures from the Federal Network Agency the third largest operator of charging stations in Germany, and the association Inspire, whose members are large charging station operators such as Fastned, Ionity and Ewe Go.
According to the companies, Germany is violating European law with its planned charging network. The Germany network is an aid, i.e. a state subsidy, in favor of individual companies or sectors of the economy, which can lead to distortions of competition.
“This is a planned economy instead of a market economy”
In the German network, the federal government pays the participating companies to set up the charging parks, and it also assumes the operating costs for eight years, after which the companies have to finance the operation themselves. For the subsidy, the federal government demands the right to set a price cap. In the run-up to the tender, there was talk of 44 cents per kilowatt hour.
Subsidies are generally prohibited in the EU. They are only permitted in exceptional cases, but must be registered with the EU Commission before they can be carried out.
According to the complainants, the federal government should have reported the Germany network to the EU Commission as state aid. But the government did not do that. If there had been such a notification, the Commission would have to publish a decision on this, which does not exist.
The chairwoman of the Inspire association, Katharina Boesche, says: “Companies that have set up privately financed charging stations over the past ten years must and want to survive in the face of competition. But they cannot do this if the state now acts as a kind of state operator and interferes in the market.”
The charging station operators are particularly bothered by the planned upper price limit for electricity. Allego Germany boss Ulf Schulte said: “This is a planned economy instead of a market economy.” Allego and others fear that subsidized locations will compete with existing charging parks in terms of price. If both are close together, the customer will probably choose the more favorable location. The unsubsidized private investment would be lost.
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Schulte says: “Perhaps the federal government’s expansion of charging stations is not going fast enough, but an invitation to tender will not help, but other hurdles should be removed, such as the approval processes and the slow grid connection.” Companies such as Aral, for example, report that the request network operators can take up to 18 months to connect to the network.
State Aid Exception
An exceptional case where state aid would be allowed is market failure. But then the state would have to prove that a market, in this case the charging infrastructure market, does not work. In talks with the EU Commission, the German government is using the argument of market failure to defend the German network, people familiar with the talks say.
According to the Federal Association of Energy and Water Management (BDEW), state intervention is not necessary to ensure nationwide supply. “There can be no question of a market failure in view of the expansion dynamic.”
According to a BDEW analysis, 28 percent of the planned locations of the German network already have privately built ultra-fast chargers, so-called HPC charging stations with an output of 150 kilowatts (kW) or more. Another 29 percent have fast charging stations up to 150 kW.
In their analyses, so-called sector inquiries, both the Federal Cartel Office and the Monopolies Commission come to the conclusion that there is a functioning market for charging stations in Germany and that further expansion is to be expected.
Charging station operators fear that state-subsidized charging stations will compete with existing charging parks in terms of price.
(Photo: IMAGO/Cord)
The Bundeskartellamt does not consider the measure of the Deutschlandnetz tenders to be suitable, necessary or appropriate. It is “doubtful whether there are sufficient reasons for the federal government, as the client, to actually become active itself in the area of offering charging infrastructure by taking on the operational and utilization risk to a very large extent”. In addition, the intended price specifications would set “regulatory standards” that could result in private offers being crowded out.
What happens if the EU Commission decides against the network
The Federal Ministry for Digital Affairs and Transport (BMDV) states that a “transparent and state-aid-compliant award procedure” will be carried out; Coordination with the EU Commission takes place regularly. “A final state aid assessment by the European Commission can only be made once the final version of the specifications for the construction and operation of the HPC charging infrastructure has been determined.”
The private-sector construction of fast-charging stations makes an important, but “on its own not sufficient contribution to a nationwide and needs-based charging infrastructure”.
The planned upper price limit is “capable of also reflecting future market developments”. The design and adaptation are the subject of the ongoing award procedure. The number of charging points per search area can also be adjusted at the end of the award procedure if the need for charging points has changed.
If the EU Commission considers the charging network to be in violation of the law on state aid, it can demand that the federal government stop the project or put it out to tender with a different design. Subsidies already granted would have to be reclaimed.
“If the German network were to be set up late at some point, the actual goal would be missed, namely to quickly set up a large charging network alongside the existing network,” says lawyer Boesche. “In the meantime, private companies will set up thousands of charging stations and the state-funded network will no longer be needed.”
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