German clean energy firm 1KOMMA5° takes the government to the EU over gas subsidies. Here’s what both parties have to say.
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Hamburg-based 1KOMMA5°, an energy solutions provider focused on solar power, energy storage, and e-mobility solutions, has officially filed a complaint with the European Commission (EC) against the German government’s planned power plant strategy.
According to the company, the government’s plans to expand fossil gas power plants by at least 20 GW by 2030 will distort competition and unnecessarily increase the costs associated with the energy transition.
This complaint specifically targets the proposed subsidies, which must receive approval from the EU under state aid law.
Philipp Schröder, CEO and Co-Founder of 1KOMMA5°, says, “The planned gas-fired power plants are intended to operate when solar and wind power are insufficient. Decentralised systems, like virtual power plants, can do precisely this. In the event of supply shortages, they reduce the electricity consumption by shifting it to different moments or by providing additional electricity from private batteries and electric cars when needed.”
What is the government up to?
The government plans to subsidise gas-fired power plants in two stages: first, during construction through tenders, and second, during operation through a central capacity market, even if the plants are not in use.
The government believes this is necessary for supply security.
However, state aid law allows subsidies for new gas plants only if they don’t distort competition and if there are no better alternatives that don’t require subsidies.
1KOMMA5° argues that the government’s plan doesn’t meet these conditions and has told the Commission its concerns.
By filing a complaint, the company is officially participating in the state aid proceedings and is recognised as an ‘interested party’ under EU law.
1KOMMA5° considers the planned subsidies a market intervention that distorts competition in the energy market.
Schröder adds, “We need technology-neutral competition between centralised and decentralised power plants in which generators and flexibility solutions are treated equally and promoted on the same terms. The goal should be to ensure the best solutions for the lowest electricity prices and the most secure electricity system through more competition.”
1KOMMA5° calls for fair competition
The proposed tenders and capacity market would systematically and disproportionately discriminate against more cost-effective alternatives.
Under these plans, producers would be paid based on their available capacity rather than the electricity they generate.
This would make it harder for decentralised energy sources, which are more flexible, to compete, leading to higher electricity prices for consumers due to extra charges.
1KOMMA5° calls for fair competition and technology neutrality to ensure equal treatment of all market participants.
Security of supply can rather be maintained through alternative mechanisms such as a mandatory hedging obligation.
It is technology-neutral and a reliable, market-based solution for decentralised security of supply, from large gas-fired power plants to residential battery storage – without subsidies, market distortion and additional levies for consumers.
EU state aid approval is not required, and the solution could be introduced immediately, says the company.
“The Federal Government’s plans are one-sided and unnecessarily harmful to virtual power plants. This jeopardises jobs and the innovative strength of numerous energy service providers, cleantech companies and startups,” says the company.
Philipp Schröder comments, “The power plant strategy should not unilaterally reinforce old structures, but should prioritise the most economical and climate-friendly solutions. A fair market will directly benefit consumers by reducing electricity prices. The planned combination of subsidies for new gas-fired power plants on the one hand and payments through the capacity market on the other is, in our view, an unacceptable intervention that will burden consumers with much higher costs. It also threatens billions of euros in investments from Europe’s leading energy service providers and cleantech companies, as well as installers and startups.”
1KOMMA5°: Operates an energy software platform
1KOMMA5° was founded in 2021 by Jannik Schall, Micha Grueber, Michael Hinderer, Philip Liesenfeld, Philipp Schröder.
The startup aims to be the one-stop shop for sales, installation, and services related to solar, electricity storage, and charging infrastructure in Europe.
1KOMMA5° invests in top companies operating in the electrical sector, specifically focusing on photovoltaic systems, charging infrastructure, and heat pumps.
In exchange, the German company offers entrepreneurs access to their software solutions, centralised services, bundled purchasing, growth capital, and a reverse shareholding in 1KOMMA5° Holding.
The German company aims to convert 500,000 buildings per year to climate-neutral power generation, heat, and mobility.
1KOMMA5° currently operates 80 locations with around 2,400 employees in Germany, Sweden, Finland, Denmark, Spain, the Netherlands, and Australia.
By 2030, the company aims to convert more than 1.5 million buildings to climate-friendly energy supplies, thus contributing to achieving the Paris climate goals.
