HY2GEN – HYDROGEN MANUFACTURER CALLS FOR: LOWERING INDUSTRIAL ELECTRICITY PRICES WITH ADJUSTED ELECTRICITY PRICE ZONES
- Discussion about electricity price zones ignores the facts – Adjusting the electricity price zone could save companies over two billion euros in electricity costs.
- EU and European network operators also support separate German electricity price zones.
- A single electricity price zone costs billions in hidden costs every year.
- With new electricity price zones, green hydrogen will also become around 20 percent cheaper; many hydrogen production plants will become financially viable without government subsidies, strengthening industry, jobs, and energy self-sufficiency.
Wiesbaden, Germany, October 21, 2025
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Matthias Lisson, Managing Director of Hy2gen Deutschland GmbH, a subsidiary of Hy2gen, a global manufacturer of renewable hydrogen and hydrogen derivatives, advocates adjusting electricity price zones in Germany. This is the only way to create the right incentive to direct investments in storage, industry, and power plants to where they benefit the grid. At the same time, a large portion of the annual redispatch costs of €2.56 billion, which are added to the electricity price, can be saved.
The hidden redispatch costs
If renewable energies such as wind turbines or solar panels produce so much electricity that the grid is overloaded, the Federal Network Agency pays these electricity producers compensation for the amount of electricity they were unable to feed into the grid: the so-called redispatch costs, which are passed on to end consumers via the electricity price.
Matthias Lisson, Managing Director of Hy2gen Deutschland GmbH, says:
The public debate surrounding the introduction of different electricity price zones is limited to unfounded claims; a fact-based analysis of current data is unfortunately lacking,
Lisson continues,
While it can be assumed that after the introduction of different electricity price zones, electricity prices in the south will be somewhat higher than in the north, I consider the idea that this would endanger industrial locations to be overdramatized and not in line with the facts.
“According to our calculations, companies in zones with a high proportion of renewable electricity should have a price advantage of around ten percent. The decisive effect, however, is that each zone is responsible for its own electricity price. This will ensure that more investment is made in wind turbines, solar systems, and electricity storage in the south, thus making electricity prices cheaper in the long term. Bavaria, for example, already generates 70 percent of its electricity from renewable energies, so the necessary expansion to over 90 percent renewable energy is certainly achievable,”
Single electricity price zone leads to high electricity costs
The European Network of Transmission System Operators for Electricity (ENTSO-E) presented a report in May of this year showing how the electricity system can operate more efficiently and cost-effectively. Germany should be thought of as having five electricity price zones because with a single bidding zone, even regions with a lot of cheap green electricity pay the same price, which is often set by fossil fuel power plants. They therefore bear the cost of expensive fossil fuel electricity even though cheap green electricity is available locally. At the same time, regions with more fossil fuel electricity generation keep power plants on standby at great expense to compensate for outages at renewable energy plants across the country. With their own price and supply zones, each region would no longer be responsible for everyone else, but first and foremost for itself. This makes decisions for electricity producers more predictable, relieves the strain on the grid and ultimately lowers electricity prices for businesses and households.
Matthias Lisson, said:
With new electricity price zones, federal states with high levels of renewable energy could reduce industrial electricity prices by about ten percent.
“Federal states such as Lower Saxony and Brandenburg, for example, produce many times their annual green electricity needs. With new electricity price zones, they could make surplus electricity available nationwide at low prices. Currently, these federal states often even have to shut down wind turbines because otherwise, transmitting the amount of electricity to the south would overload the grid. A lower electricity price in Lower Saxony or Brandenburg would immediately strengthen the competitiveness of local companies, especially in electricity-intensive sectors.”
Electricity price zone separation in Germany inevitable
According to reports from ENTSO-E and the Agency for the Cooperation of Energy Regulators (ACER), Germany does not have sufficient grid capacity to fulfill its role of distributing electricity from neighboring countries as an electricity hub across Europe. By EU regulation, Germany is now required to choose one of two options within six months: propose an action plan to build grid capacity or adjust its electricity price zone. Since the current federal government has so far stuck to an electricity price zone, Germany will likely decide to pursue the action plan. If this fails, however, the EU could ultimately require Germany to separate its electricity price zone so that it meets its grid capacity targets. Taking this process into account, Germany will be ordered by the EU to separate its electricity price zone by 2030 at the latest.
Boosting the hydrogen boom
Electricity costs dominate the operating costs of electrolysis for the production of renewable hydrogen. By separating electricity prices, Lisson says, renewable hydrogen could be produced at around 20 percent less cost. This would make many planned production plants immediately affordable and allow them to be built. At the same time, renewable hydrogen would become cheaper on the market, making it easier for industrial companies to switch from fossil to renewable energy sources. With separate electricity price zones, renewable hydrogen can be turned into a profitable industry overnight, for which new production plants can be built. These create jobs, attract new companies, and make Germany a step closer to energy self-sufficient because hydrogen can be produced regionally using only water and electricity.
Matthias Lisson continued:
Germany could have a cheaper electricity price right now.
“EU countries like Sweden, Denmark, and Italy already have several electricity price zones and are demonstrating that it’s possible. For industries that rely on renewable hydrogen to meet the EU’s climate targets and become independent of fossil fuels, we can make the price of the energy transition 20 percent cheaper. Above all, we can secure the ramp-up of hydrogen production in Germany, as many projects with low electricity prices could be built even without government subsidies.”
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HY2GEN – HYDROGEN MANUFACTURER CALLS FOR: LOWERING INDUSTRIAL ELECTRICITY PRICES WITH ADJUSTED ELECTRICITY PRICE ZONES, source
