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German Power Market Split May Spur North-South Price Divide

Power prices in northern Germany may fall as much as 21 percent if Europe’s biggest economy is divided into regional markets, according to consultant Frontier Economics.

Average day-ahead prices in the north, where most of Germany’s wind power is generated, would drop as much as 8 euros ($11) a megawatt-hour by 2020 under the plan, while those in the south would rise 3 euros from last year’s levels, Christoph Reichmann, a director at Frontier Economics, said at an energy seminar in Stockholm. The European Union is assessing bidding zones as a way to improve the bloc’s power network efficiency.