German Publishers and Booksellers Association.
They are calling for new cartel laws that reflect life in the digital books market.
German Publishers and Booksellers Association.
They are calling for new cartel laws that reflect life in the digital books market.
Foam manufacturers cartel.
The E.U. announced a fine of ~114 million euros for price fixing to several manufacturers of the polyurethane foam used in furniture and car seats. The fine was reduced for companies that provided information about the cartel.
The lion’s share of the foam fine, 75 million euros, will be paid by a U.S manufacturer, Carpenter Co., and the rest by Eurofoam (Austria) and Recticel (Belgium). Because Eurofoam is a joint venture of Recticel and another Austrian firm that does not make foam, the final accounting could get a bit complicated. Foam manufacturer Vita Cayman (Cayman Islands) will not be fined because they’re the ones who reported the cartel to authorities in Brussels.
The cartel manipulated sale prices in about ten E.U. countries, including Germany. Auto seats make up about a quarter of the industry’s sales, said the E.U.’s competition commissioner.
(Sh OW! m shtoff heah shtell ah caw TELL.)
Germany has thousands of gas stations that tend to be owned by only a handful of chains affiliated with the world’s major oil companies. For years, people accused German gas stations of raising fuel prices right before weekends and holidays and especially holiday weekends, in concert, yet no one could prove collusion. So the government created the Market Transparency Office for Fuel. In 2013, the Markttransparenzstelle began requiring German gas stations to communicate their fuel price changes in real time, and then it broadcast the data to companies whose phone apps let consumers quickly and easily compare gas prices at the closest gas stations.
Süddeutsche Zeitung has now taken four weeks of gas price data from one of the larger phone apps and combed through the information looking for patterns in what they’re calling a “data journalism” investigation. They’ll be publishing their findings in a series of articles.
Update on 16 Apr 2014: Some immediately obvious outliers turned out to be caused by gas stations that were sending in prices without decimal points, or e.g. one was submitting the price “9999.” S.Z. said the system still doesn’t have a way to check whether the numbers submitted by gas stations are truthful. Currently consumers are to send complaints about incorrect price data to the phone app companies.
S.Z. said they too can’t prove collusion. But some gas station chains are more expensive (the chain with the highest fuel prices said it’s because their fuel is such high quality). Some chains are big enough that their price changes move the market, with smaller chains changing their prices after a bigger chain does so.
The lowest fuel prices tended to be in areas with dense populations.
One gas station chain tends to change its fuel prices >13 times a day, another only 9 times a day. Both are very likely to change fuel prices between 7 and 8 p.m., while several other chains are very likely to change prices between 9 p.m. and midnight. Apparently until this report was published the cheapest time to refuel was between 5 and 7 p.m., with fuel prices rising steeply after 8 p.m.
Update on 17 Apr 2014: The chain with the most gas stations in Germany has the highest fuel prices in Germany, in the data set the Süddeutsche Zeitung examined. The chain with the second-highest number of gas stations has the second-highest fuel prices. S.Z. said the ratio holds true for four other large “A brand” chains.
“B brand,” cheaper and smaller, gas station chains tend to use a strategy of selling fuel at prices only perhaps two eurocents below the prices of the closest “A brand” gas stations but the new pricing data shows that their prices average four to five eurocents below the A brands’ when looking at Germany as a whole. The C.E.O. of one of the fuel price phone apps said, “The strategy of the B brands is actually: one or two cents cheaper is okay, that won’t start a price war.”
Germany also has many gas stations not affiliated with the large oil-company chains, but the current database groups independent gas stations in the same category as ones that belong to a large non-oil company such as a chain of car washes or supermarkets. The larger category of independent gas stations plus gas stations belonging to non-oil-company chains had higher average fuel prices than the B brand gas stations, yet S.Z. said “a look at the data” showed that in fact car wash and supermarket chains sell the cheapest fuel, because they’re hoping customers who arrive to buy gas will stay to wash cars or buy groceries.
Austria is trying to regulate gas stations’ pricing to benefit consumers more by mandating that gas stations there can only change fuel prices once per day, at noon. It’s not known whether the advantages of this model will outweigh the disadvantages: German and other officials are watching to see how the experiment works out.
(DOT en jure nah LIZ moose.)
“Nuclear Power Whiteout,” a non-native speaker’s inadequate translation of the title of the bestselling Japanese thriller
Genpatsu Whiteout. It’s a story about a fictional terrorist attack on a nuclear power plant in Japan. The pseudonymous author seemed so well-informed that there was speculation about the area of government in which he or she might have been employed.
Philip Brasor wrote, “Though it sounds like a conventional thriller, the novel’s overarching theme is the government’s determination to resume the nation’s nuclear power network after the Fukushima accident, a mission it carries out so heedlessly that it neglects to enact safety standards that would mitigate the effects of such an attack.”
Apparently the fictional novel also mentions an entrenched system of power companies’ adding 10% over the market value to purchases made for the electricity industry in that country, with some of the extra money being distributed among networks of politicians and their affiliates. And possible post-tsunami attempts in response to the engineering disasters at Fukushima Daiichi to pass legislation that supposedly increased safety, transparency and competition but doesn’t really. Bribe costs ultimately get paid by electricity consumers in their utility bills; reforms that don’t fix the corruption problem might make Japanese voters more amenable to restarting dangerously engineered nuclear power plants if they’re told it will supposedly reduce electricity prices.
(CAIRN croft VICE blend oong.)
Fines to brewers.
The German cartel authority and several major German brewers have confirmed that >100 million euros in fines for pricing collusion have been issued so far as a result of investigations into the “biggest beer cartel in German history” ever caught, going on for “umpteen” years according to testimony from a Veltins manager. The Belgian beer giant InBev that bought Budweiser and Becks ratted the German brewers out and will thus be the only participant not fined. Some other brewers’ fines were also reduced from the maximum possible 10% of annual gross, depending on their cooperation.
By Scandinavian and U.S. standards, even illegally inflated German beer prices were relatively low because of Germany’s low sin taxes on alcohol. (Alcohol is not considered the spark in the societal powder keg in Germany. Beer, especially, is thought to have some redeeming qualities of bringing people together socially, and possibly some of the nutritional aspects of bread.) The cartel’s agreements would have raised the price of a 20-bottle case of beer by 1 euro in 2008, Spiegel.de explained.
Investigations are still ongoing against two more corporate brewers and four regional (i.e. smaller) brewers, who have not yet been named for that reason.
(BOOSS geld gay gen BROW ah WRY en.)
Happy holidays! The Bundestag announced plans to create its own standing internet committee [ständiger Internet-Ausschuss], responsible for online issues. Though not entirely neglected, the interface between citizens and computers is not fully covered in Germany either. The Greens traditionally disliked technology, the Pirate party was trying to fix that lacuna but now seems possibly unterwandert by the German military (what was a Defense Department employee doing as party chair, one asks oneself now, post-Snowden). The new coalition has divided up online issues among a Wirrwarr of multiple ministers, some of whom oppose digital consumer protections such as network neutrality or individuals’ data privacy yet are now the designated advocates for them.
The press learned about the new Bundestag committee’s creation from Twitter.
Topics to be handled by the parliamentary committee include the expansion of broadband infrastructure, copyrights, data security.
Update on 13 Feb 2014: The Bundestag created its internet committee! It’s called Digital Agenda (dee ghee TALL awg EN dah).
(INN tah net OW! ss shoes imm BOON dess tochh.)
Dutch for “Data Protection Authority,” a government office in Holland.
Google has been invited to testify at a data protection hearing in Holland. Süddeutsche.de ‘s 29 Nov 2013 article said the head of Holland’s data protection office said, “Google is spinning an invisible network out of our personal data without our permission, and there’s laws against that.”
Update on 15 Dec 2013: Google said U.K. privacy complaint plaintiffs should sue the company in California courts. The U.K. plaintiffs wanted to sue the company for secretly tracking their internet browsing “by circumventing privacy settings” in Apple’s Safari web browser on different devices. The Guardian.co.uk said the company’s lawyers were expected to argue in court on Monday, 16 Dec 2013, that a similar privacy complaint had recently been dismissed from a U.S. court “and that no European regulators are currently investigating this issue.”
Spiegel.de said Google has already had to pay two fines for this privacy practice in the U.S.: $22.5 million to the F.T.C. in August 2012 for tricking Safari into accepting cookies on various devices even when the consumer had set tracking to “off” and again $17 million in a Nov 2013 settlement to the attorneys general of ~37 U.S. states for the same issue.
Update on 08 Jan 2014: France’s data protection authority fined Google 150,000 euros, the largest fine C.N.I.L. ever issued, for violating France’s data protection laws. Since 2012, Süddeutsche.de explained, Google has been able to create search-based profiles for users of its search engine, YouTube, Gmail, Google+ and other enterprises and that enable sending targeted ads to consumers. France told Google to inform French users about how the company was handling their data and to obtain their consent before putting cookies on their computers that would track their online behavior. Google did not comply.
Update on 14 Dec 2013: Canada’s antitrust Competition Bureau is investigating Google’s business practices, to see “whether Google is abusing its dominance of the Internet search market to stifle competition and drive up digital advertising prices.”
Apparently authorities in Spain, Italy and France were also examining Google’s business practices, according to the Süddeutsche.de article.
Extending the statute of limitations period.
At the Fourth World Conference on Doping in Sport in Johannesburg in November 2013, the World Anti-Doping Agency (W.A.D.A.) agreed to increase the ban on athletes caught doping from two years to four years, increase the statute of limitations for using illegal performance-enhancing drugs from eight years to ten years, and increase the world anti-doping agency’s power versus sport associations and country-level athletics organizations. Athletics support staff, wrote MiamiHerald.com, such as trainers, coaches and officials, “were not subject to the same anti-doping rules as athletes” but that has now been changed. W.A.D.A. and the International Cycling Union said they will also be creating an inquiry commission to investigate bicycling’s lethally performance-enhanced history. These changes will go into effect 01 Jan 2015, in time for the Rio de Janeiro Olympic Games.
MiamiHerald.com reported drugs testing in sport is starting to focus more on intelligence gathering, “as a complement to” traditional urine and blood sampling, and that such “investigation” is how the evidence was acquired for the recent BALCO, Operation Puerto and Lance Armstrong discoveries. At least Bundesliga soccer has not been fully participating in effective anti-doping sampling regimens, taking few samples and discarding them early.
In October 2013, ARD tagesschau.de broadcast an interesting report on the assignation of guilts in a German cyclist’s doping trial. If the cycling team’s managers knew about doping on the team, the judges decided, then after cyclists get caught doping their managers can’t sue them for violation of the team’s official rules.
“This first criminal trial against a doping sinner shows that with the existing criminal laws it could be difficult in principle to achieve a deterrent effect on professional athletes. For a long time now people have been discussing the introduction of a specific paragraph about athletic cheating, making it a crime to ‘distort competition’ [Wettbewerbsverzerrung], as occurs during doping.”
–Frank Bräutigam, excellent legal correspondent for ARD tagesschau.de
A pundit complained that if the cyclist had been found guilty, the verdict would have had far-reaching negative effects such as not punishing team doctors for doping while punishing athletes caught doing it, even though the athletes probably aren’t aware of the full spectrum of harmful side effects and the team doctors are.
(Fair YAIR oongs frissed fair LENG airn.)
The E.U. Commission said they are going to file complaints with the European Court of Justice against Deutsche Bahn, the German rail system, and Deutsche Post, the German post office, for competition violations.
Deutsche Bahn is accused of an unclear accounting system without “eindeutig geregelt,” unambiguously regulated, procedures for keeping separate money for the rails network and and for traffic [“Schienennetz und Verkehr“]; E.U. law requires separation between the ownership and operation of rails networks. The Commission said money paid by D.B.’s competitors to use its rail networks might have been “alienated from its purpose” for improper “cross-subventions.” Also, taxpayers’ money which the government must contribute to the maintenance of the rails network infrastructure might have been diverted into Deutsche Bahn’s passenger and freight traffic. Such redirection might have enabled the company to establish unfair advantages over its competitors, thus the complaint from the E.U. competition authority, though the E.U. transportation commissioner Siim Kallas (libertarianesque Estonian Reform Party) who approved the C.S.U.’s car toll on foreigners entering Bavaria also said he wants new legislation to create more competition between European railroad companies. Generally, the German government is accused of not having adequately blocked D.B. from such repurposing and unclear accounting, and if the court agrees it appears Germany may be fined.
At issue for the Post is old government aid payments for which, the E.U. said, the German government did not adequately require reimbursement. The Deutsche Post paid back ~300 million euros plus interest of the 500 million to 1000 million euros the E.U. accused it in 2012 of receiving improperly in the form of high regulated postage prices and “Zuschüsse” [grants, subsidies, subventions, extra payments, benefits] to bureaucrats’ pension plans. Calculating how much the Post had improperly received was left to German authorities.
Süddeutsche.de reported the E.U. had allowed the Post’s unusual subventions in 2012 in principle but felt they were too high. There was also disagreement about how many divisions of the Post were involved: Germany argued only Postal Services should have to pay back the subventions, while the E.U. said Postal Services and Business Customers.
(VET bev airbz FOR tie leh.)
Update on 05 Aug 2013: Supposedly ~70% of the world potassium trade has been controlled by two export alliances, BPC in Russia and Canpotex in North America. The world price for potassium was kept at a “comfortable” ~$400/ton. Last summer a Russian potassium company, Uralkali, made a surprise exit from the BPC export alliance (BPC stands for Belarus Potash Company), and the potassium price then fell to ~$300/ton. The stock price of e.g. the K+S potassium and salts company in northern Hesse fell precipitously as well.
Update on 24 Oct 2013: Spiegel.de posted an amazing potassium follow-up: “A kingdom for a cartel. Lukaschenko’s battle with the oligarch.” After the Russian firm Uralkali abruptly ended their BPC cooperation with the Belarussian firm Belaruskali last summer, Belarussian Prime Minister Lukaschenko had Uralkali’s C.E.O., Wladislaw Baumgertner, arrested in Minsk, where he is still held by authorities though he was moved to house arrest in late September.
Since the split it’s been shown how dependent the White Russian state company was on its Russian partners: exports to India and China were considerable but have nearly ended because, White Russian sources said, Belaruskali’s sales personnel don’t have the English to keep their Indian and Chinese deliveries on Russian trains running? In addition to its dependence on Russian trains, White Russia remains dependent on Russian oil and gas. White Russian potassium mines have been experiencing temporary closures since the cartel ended. As the company’s revenues fall so do the state’s; Mr. Lukaschenko had been using the potassium company’s money to fill the government’s budget gaps.
Spiegel.de wrote that Uralkali and Belaruskali started working together in 2005 to help keep international potassium prices high, together controlling ~40% of the world market in 2012 for potassium salts, which are used to make artificial fertilizers. World potassium prices had peaks of as much as $900/ton, yet White Russia is now forced to try to attract nearby customers in Russia with prices around $140/ton, forcing the Russian competitor Uralkali to counteroffer $160/ton for domestic customers.
More historical background provided in the article: Uralkali is controlled by major shareholder Suleiman Kerimow (worth >$7 billion) who bought his interest from another oligarch in 2010. He was also interested in acquiring Belaruskali from Mr. Lukaschenko, who not only did not sell but announced that Mr. Kerimow had offered a purchase price of $10 billion to the government plus an additional $5-billion bribe to Mr. Lukaschenko. When the purchase offer was made is unclear from the Spiegel.de article but the nature of the gossip flying indicates it was before the BPC alliance ended.
(CAWL ee cawt ELL.)
“Without us, nothing.” Since the George W. Bush administration, the former U.S. phone monopoly AT&T appears to have provided cooperation in constitutionally questionable surveillance projects to such a degree that one might conclude the company thinks no one can be elected president of the U.S.A. without its support.
In addition to the famous access to a key internet node that AT&T was caught providing in San Francisco in 2002 and then granted retroactive immunity for by Congress, NYTimes.com reporting and others’ follow-ups appear to indicate AT&T has been keeping its own copies of phone communications which people have used to access e.g. a 26-year-old phone call. AT&T let government agents hire and even “embed” AT&T employees to help search the phone company’s difficult-to-use database providing access to these calls. NYTimes.com described the expensive database consultants as having to sit next to the government agents as they attempted to use the software; if this is so it makes you wonder how and if AT&T managed to keep the N.S.A. and G.C.H.Q. from having remote access to its computers.
AT&T also appears to be gradually re-acquiring the Baby Bell phone companies it was split into. Were that the case, the company might leave ~1.5 competitors in the market to avoid appearing monopolistic.
(OH neh OONTS NIX.)
Winding up, closing down, resolution, clearing, of Austrian bank Hypo Alpe Adria. The E.U. Commission appeared to give its permission to break up the struggling bank on 02 Sep 2013. The European competition authority still had to give its approval.
In 2009 the country of Austria took back HGAA from the BayernLB, Bavarian Landesbank, and nationalized it. Hypo continued losing money. By 2012 Austrian taxpayers had given the bank 3 billion euros bailout, but still it needed ~800 million euros in the first half of 2013 and a projected 700 million in the second half, with expectations of ~5 billion euros more required by 2017. The plan is now to sell the Austrian branch to a British investor in Q4 2013, close the Italian branch and sell off the other southern European banks (250 branch offices employing 4300 workers) by 2015.
The reporting repeating the numbers cited by the Austrian finance ministry varies, and it’s hard to match up the cited numbers with the years given. Austrian finance minister Maria Fekter (Ö.V.P.) said the numerical uncertainty is partially because they don’t know how much they’ll get in the sale of the southern European branches. They also want to move HGAA’s failed loans, worst paper and unsellable divisions “away” into a “separate Abwicklungseinheit,” a separate clearing unit, also called an “Abbaubank,” literally breakdown or decomposition bank but apparently called in English a “restructuring unit,” “separate from the core bank.” Without the Abbaubank device, Austrian taxpayers might be on the hook for 16 billion euros, another Austrian finance ministry number, to wind down the HGAA.
We know a bit about what happened under Carinthian and Bavarian management of HGAA. What happened in Italy?
Austria will be holding a parliamentary election on 29 Sep 2013.
Update on 14 Mar 2014: It’s been decided that the Hypo Alpe Adria group will be wound down as a “bad bank,” into a “deregulated, private-economy-organized company” said Austrian finance minister Michael Spindelegger. About 18 billion euros in bad paper will be moved into this vehicle. The decision will increase Austria’s national debt >5%, from ~75% to >80% of the country’s gross national product. HGAA’s subsidiary banks in Italy and the Balkans are to be sold as quickly as possible. It should take the bad bank about a decade to finish closing down the organization, only after which the true costs will be known, said a social minister who will no longer be social minister a decade from now.
Update on 17 Jun 2014: The Austrian state of Carinthia owes ~12 billion euros because of guarantees it made for Hypo Alpe Adria. Carinthia’s annual budget is apparently ~1 billion euros.
A week ago Austria’s cabinet passed a special law that said Carinthia will no longer be responsible for all the bank’s debt that it has guaranteed. This should save the state ~800 million euros while stirring up a lot of trouble for Austria.
Austria’s federal government is deliberately avoiding bankruptcy for the troubled bank because they fear it would pull the state of Carinthia into bankruptcy. The cabinet passed this “special law” haircutting non-first-tranche holders of HAA debt, whose riskier tranche under normal circumstances would only come into play after a bankruptcy. The Green party said they should just declare the bank bankrupt and work out fair haircuts for all. Carinthia’s most important services such as day care centers and hospitals are mandated by law, said the Greens, so the bank’s creditors wouldn’t be able to pull much money out of the state government. “These investors have not earned the protection of the taxpayers.”
(OB vick loong fon HIPPO I’ll pay ODD ree ah.)
“Floating gas harbor as a landing point for international liquid gas tankers.” Steve Coll wrote that the first liquid natural gas (L.N.G.) contract was signed between Britain and Algeria in 1961, with conversion plants and transport ships that used refrigeration. Figuring out how to engineer natural gas into liquid forms made it possible to ship it cheaply around the world and created an international gas market. Initially the big oil companies searched for and developed gas fields outside their home countries, liquefying and exporting Middle Eastern and African natural gas instead of the pre-shipping method of just burning or flaring it off at the wellhead because building, protecting and maintaining pipelines requires quantities of time, money and cooperation that companies and countries aren’t always prepared to invest. Later, fracked gas from doing… terrible things to domestic rock was sold in the new gas market created. Much initial L.N.G. tech investment was driven by South Korea and Japan’s need for power, Coll wrote.
South Korean shipyards are now building giant floating harbors where international L.N.G. tankers can dock and unload. These giant floating harbors—they must be interesting-looking!—can be sailed around the world. They will make it possible for countries that previously had no natural gas or were dependent on e.g. one pipeline to buy gas at relatively competitive international prices. Might also reduce the total number of lands willing to frack themselves to a few fracking “specialist” countries.
(SHVIM men dare GAUZE haw fen olz ON lond ah POONKT foor internot SEE OWN ALL ah FLOOSS ig gauze tonk ah.)
“Europe-wide.” A controversial Arte documentary has drawn attention to the new EU water guideline the European Commissioner for Internal Market and Services Michel Barnier (of Nicolas Sarkozy’s UMP party) is about to issue in which local European government water projects will accept bids from all of Europe. Water activist Jean-Luc Touly warned the current plans for the guideline will make it difficult for public utilities to compete against profit-driven private utilities that are, he said, not primarily motivated by consumers’ best interests. 80% of the French water market has been privatized, the 2010 Arte documentary “Water Makes Money” claims to show instances of corruption in that French privatization and there was an increase in French water quality problems post-privatization, Touly said.
Around the world, many privatization contracts appear to have gone to subsidiaries of just a few big companies such as Bechtel (USA), Enron (USA, now spectacularly bankrupt), RWE (Germany) and Suez/Veolia (France). Opening privatization of city water utilities to Europe-wide bidding might encourage reductions in international competition among these providers.
(Oy ROPE a v eye t.)
“Data throttling.” Deutsche Telekom, whose subsidiary T-Mobile stood out from other US telephone companies because it was never explicitly mentioned in the press as having given its customers’ data to the George W. Bush administration, has announced that starting May 1, 2013, it will slow down internet traffic for its flat-rate German customers above a low monthly data limit of 75 GB. There will be no appeal. People are furious. Critics say there may be a competition issue because Telekom’s own online content, such as from its entertainment channels, will not count toward the monthly data limit. If so, this might be a case for the Bundesnetzagentur, the German Federal Networks Agency for Electricity, Gas, Telecommunications, Post and Railroads (BNetzA).
Update on 30 Oct 2013: A Cologne court forbade Deutsche Telekom to slow down the data supplied to its flat-rate internet customers, in a lawsuit brought by the North Rhine-Westphalian Consumer Protection Agency [Verbraucherschutzzentrale Nordrhein-Westfalen e.V.]. Deutsche Telekom was planning to reduce these household internet connections to as low as <10% of normal surfing speeds.
Süddeutsche.de reported that the court said Telekom could slow down its customers’ internet access but not without changing its current marketing. Without fixing the problem, “Drosselkom” had tried several responses to the outrage sparked by these plans this year, including offering a second more expensive flat rate plan that really, they swore, this time, would not be subsequently decelerated. Competitors 1&1 and Kabel Deutschland have been capping their customers’ internet connections too, SZ reported. They quoted a pundit as saying the Cologne Landgericht’s verdict was important for starting to create limits to contracts that have been being arbitrarily changed by companies. Telekom plans to appeal.
(DOT en DROSS ell oong.)
“Network fee exemption.” All electricity consumers in Germany have been sharing the costs to build alternative power sources and now to build new power lines to connect alternative power sources, such as the wind parks out in the North Sea, to the power grid. All electricity consumers in Germany? Well, not quite. Businesses that consume a lot of electricity have been getting exemptions from the government, and those businesses’ unpaid share of the costs has then been redistributed among everyone else, mostly private individuals and families. On 06 Mar 2013, the Düsseldorf Higher Regional Court overturned the rebates to high-volume electricity-consuming businesses from the shared costs of building the new power lines, saying the Energiewirtschaftsgesetz [Energy Industry Act] does not allow this exemption.
Update on 14 Jul 2013: The E.U. is investigating the legality of high-electricity-consuming businesses’ exemptions to the German EEG-Umlage and Netzentgelt (this investigation was started in March). If the competition commissioner decides the rebates were impermissible, they might even be eliminated with retroactive effect, leaving companies owing millions of euros. State aid to companies in Europe must be approved by the E.U. commission, said Manager Magazin, to prevent competitive distortions.
Update on 26 Aug 2013: There’s still a paucity of power lines connecting the North Sea wind power parks to the mainland grid. Two of three finished German windparks are connected to the mainland. Not only are power line builders behind on connecting existing ocean windmills, but the maps in German television news show there’s so much more area there that has been zoned for windparks yet to be built, which will also have to be connected up. They’re looking for investors. A “Cuxhavener Appell” was signed by investors in North Sea German wind parks seeking planning security. Chinese companies might be very good at building this infrastructure.
Update on 13 Dec 2013: The E.U. Commission has initiated proceedings against Germany’s EEG-Umlage because of the hundreds of rebates to it that were granted to high-power-consumption businesses. Multiple countries filed complaints about it in Brussels, saying the German exemptions to its own law distorted competition in the domestic European market. The formal start of the proceedings is scheduled for Wednesday, 18 Dec 2013. Experts writing opinions for the E.U. competition authority’s investigation said the rebates to companies were a problem but the payments to small renewable-energy feeders contributing electricity to the system were “not overcompensated,” meaning fine, Süddeutsche.de reported. A German Green party member of the European Parliament accused E.U. energy commissar Günther Oettinger (German CDU) of using the E.U. competition authority’s (understandable!) problem with CDU-granted exemptions to the EEG-Umlage to try to endanger Germany’s entire investment program in renewable power sources, rather than work with Brussels to eliminate the sole sticking point, one that his party would be rather well-placed to fix. Süddeutsche.de said there was great opposition in the European Parliament to the Commission’s announcement that it would try to declare Germany’s entire Renewable Energies Act an impermissible subvention, rather than just the exemptions granted to it “which Berlin has steadfastly refused to touch.” Mr. Oettinger should send a clear message to Brussels that Berlin is now willing to talk about reducing the exorbitant exemptions, the Green party said.
Update on 14 Dec 2013: Spiegel.de reported that E.U. competition commissioner Joaquín Almunia is trying to hurry up and change the E.U.’s Energiewende model before the E.U. election in spring 2014. He will announce plans on Wednesday, 18 Dec 2013, they said, for auctioning off renewable energy subventions (“market premium” model) rather than guaranteeing them (“fixed premium”). His preferred model has been shown to result in the E.U. in countries’ building fewer renewable energy generation sites than planned.
Spiegel.de said it saw internal E.U. documents indicating the following troublesome European components in the competition commissioner’s plan for changing E.U. renewable energy policy. The promised fixed prices for purchasing clean electricity for a defined number of years that have resulted in so much renewable energy construction in Germany are “a thorn in the eye” to Mr. Almunia and his Competition office, said Spiegel.de. Instead, he wants electricity to be purchased from renewable energy generator operators at market prices plus a premium decided in an auction-type process. To keep the premium as low as possible, construction of new renewable-source generators is to be opened up to competitive bidding, with the contract awarded to the builder offering to accept the lowest premium on the electricity their site will produce. Spiegel.de pointed out this adds obvious uncertainty to the apparent profitability of building new renewable energy generators, large and small, but also less obvious uncertainty, such as: companies that win these auctions could go bankrupt, leaving the rewewable energy infrastructure construction project and/or electricity seller high and dry in future years.
According to its new coalition government agreement, Germany had planned to switch to the electricity market price + premium model, but not before 2017 and then “only if certain relevant pilot projects were successful.”
Spiegel.de said some members of the E.U. Commission felt Mr. Almunia’s “market premium” model was suitable for Europe, now, and some felt it may be suitable for countries in which the switch to renewable sources [Energiewende] is well-established but not for countries starting out on that path. In his draft guideline, which he’s trying to push through before the springtime election, he changed a definition that might make Germany’s success in this area an obstacle for member states attempting to replicate it: the definition of a mature technology was changed from a certain percentage of the electricity consumed by a country to a certain percentage of the electricity generated by the entire European Union. “Solar, wind (on land and sea), hydropower and biogas plants already exceed Mr. Almunia’s limit” in the E.U., Spiegel.de said, meaning that “in future they could only be supported [subventioned] by competitive bidding” even in countries just starting down that path, even in countries less wealthy than Germany.
In addition to creating a high impediment for countries in which technologies redefined as “market-mature” have not yet been built to competitive levels, Spiegel.de quoted opponents to the measure as arguing, this “direct marketing” model allegedly doesn’t work as promised. “Small electricity operators will need a marketer to sell their electricity,” and this marketer could go bankrupt, after which the operators couldn’t sell their electricity and would lose their right to a subvention [Förderung]. Banks would see the increased risk and raise interest rates on loans for constructing renewable energy sources. Building new renewable generators would become less attractive, meaning the market premium would have to go up for construction to occur: in the end, this model could prove more expensive than Germany’s current system (now being copied by over a dozen E.U. member states Spiegel.de said) while resulting in less construction of the new infrastructure.
(Nets ent GELT beh fry oong.)
German Federal Networks Agency for Electricity, Gas, Telecommunications, Post and Railroads, a federal regulation authority tasked with maintaining and promoting competition in “so-called network markets,” according to Wikipedia.
(BOON dess NETZ ah gen tour foor elek tree tsee TATE, goz, tay lay com MOON ee ka TSEE OWN, post oond EYE zen bonn en.)
The new “Market Transparency Office,” under the auspices of the German Federal Cartell Authority. The MTO is intended to gather and evaluate data from electricity companies and especially gas stations to ensure there is no price fixing. These data will not be shared with the public. It is not clear whether this new office will be functional or grandstanding.
Update on 12 Sep 2013: Starting today, drivers will have access to the price data ~13,000 German gas stations have been sending to the federal cartel authority [Bundeskartellamt] since 31 Aug 2013. The bundled data are forwarded to several phone apps and “registered consumer protection centers” or “consumer portals” drivers can use to compare gas station prices in real time; price changes are updated to the market transparency office every five minutes. Beta testing is scheduled to end 01 Dec 2013.
The following consumer portals have been approved for this so far:
Spiegel.de reported another eight “information services” have been approved to help share the price data with consumers and another hundred have applied for approval.
The Green party called this a placebo office, criticizing inter alia that it does not fix inflationary pricing malheurs committed by the refineries (which have the same ownership as some large gas station chains in some cases). Also, it doesn’t cover all fuels or 100% of the market because the smallest gas stations can apply to be exempted. Germany has about 14,000 gas stations, so ~1000 are not participating as the service is launched.
(MARKED trons par ENTS shtell ah.)