Transition Tensions: Who is Paying the Price?
Welcome to our May Policy Update!
If the recent blackout scare on the Iberian peninsula told us anything, it’s this: electricity grids are back in the headlines, and for all the right (and wrong) reasons. As Europe doubles down on electrification and decarbonisation, the systems that carry our power are showing their cracks. Whether it’s Spain and Portugal facing sudden shutdowns or Germany debating whether to break itself up into multiple electricity price zones, the big question is clear: how do we pay for the transition, and who picks up the bill?
Enter ENTSO-E’s report, which dropped like a voltage surge into Germany’s ongoing debate on electricity pricing. The idea of splitting Germany into separate price zones isn’t new, it’s just becoming harder to ignore. Our CEO Bernd Weber put it bluntly in various news outlets: Germany needs a structural reform agenda and serious talks with its neighbours, not just a North-South blame game.
Zooming out, the bigger story is about money and momentum. From electricity pricing to the electrification of energy-intensive industries, we’re in a race to decarbonise and stay competitive. That’s why we hosted a workshop on how to accelerate electrification across these sectors. And guess what? It’s not just about subsidies: it’s about spending smartly. The same logic applies to the next chapter in the EU’s climate toolkit: ETS 2 and the question of whether revenues should go straight into citizens’ pockets. Mark your calendars, because on June 3, we’ll have more thoughts on this.
Whether we’re talking about grids, prices, or industrial decarbonisation, one thing is clear: the energy transition isn’t short on ambition, but someone has to cover the costs. EPICO is here to make sure that policies and the price signals are up to the task.
Germany’s Electricity Market Debate Reignites After ENTSO-E Recommendations
It’s been called the most politically sensitive question in Germany’s power market. In late April, ENTSO-E published its long-anticipated review of Germany’s electricity bidding zone, recommending what many in the sector have long expected: splitting the country into multiple price zones. This would result in easing grid congestion, reducing redispatch costs, and sending clearer signals for where new generation is most needed. In theory, such a move could save up to €339 million per year, but the politics are anything but straightforward.
The German government now has six months to respond. Either it accepts the proposal or presents an alternative plan to address the underlying inefficiencies in the system. If no action is taken, the matter could land on the desk of the European Commission. While many countries in the EU already apply regional pricing, Germany’s single-zone model has increasingly drawn criticism, from both inside and outside its borders, for distorting market signals and blocking the benefits of cross-border flows. Unsurprisingly, the issue made headlines across Europe, and media attention has been intense.
EPICO’s CEO Dr. Bernd Weber was widely quoted in the coverage, calling the report a much-needed catalyst to shift away from a politicised, North-vs-South debate and toward a structural reform agenda. “This is not simply a domestic yes-or-no question,” he noted in the Financial Times, urging the government to launch serious discussions with neighbouring countries. Beyond a bidding zone split, Bernd sees other options to localise price signals, such as introducing dynamic grid tariffs that could modernise the system without fragmenting it. With the new Federal Minister for Economic Affairs, Katherina Reiche, now reviewing the report, there is a real opportunity to move beyond political divides, as “doing nothing” would be the worst alternative, leading to ever-greater inefficiencies that Germany simply cannot afford.
You can read more on this in EPICO in the Media section below.
Key conclusions from our Workshop on Accelerating Electrification for Energy-Intensive Industries
From steel to chemicals to cement, Europe’s energy-intensive industries are navigating a tough balancing act: how can they stay globally competitive while cutting emissions at speed? That’s the challenge we tackled at our latest workshop on Accelerating Electrification for Energy-Intensive Industries, held at our Norrsken Brussels office. We brought together over 20 representatives from the European Commission, industry, and leading think tanks for a day of exchanges on financing, energy markets, and hydrogen infrastructure.
In the financing session, we examined how to fairly share the costs of decarbonisation, looking at tools like Carbon Contracts for Difference and Innovation Fund auctions. With green industrial products still coming at a premium, participants explored who should foot the bill, from state budgets to taxpayers, companies, or customers, and how to design mechanisms that are both effective and politically viable.
On electrification and hydrogen, conversations turned to pragmatic aspects of the transition. From reforming electricity pricing and supporting Power Purchase Agreements to strengthening grid interconnections and updating the EU Hydrogen Strategy, the focus was clear: we need to bring down costs, increase renewable supply, and prioritise infrastructure that works across borders. The insights shared will now feed into three upcoming EPICO Policy Briefs, so hold tight and stay tuned for further updates!
SAVE THE DATE: Ensuring the Success of ETS-2: the role of Direct Payments
As Europe races toward the 2027 launch of the new Emissions Trading System for buildings and road transport (ETS2), one question is gaining urgency: how do we make it work for people? With carbon pricing set to affect everything from heating bills to the cost of commuting, this is no longer just distant policy file, but rather a kitchen-table issue. That’s why we’re hosting a high-level event in Brussels on 3 June to explore one of the most pressing dimensions of ETS2 implementation: how to use revenues to shield vulnerable households and build public support for climate action.
From direct payments to climate dividends, Member States are now finalising Social Climate Plans that could define the political success (or failure) of ETS2. This is a crucial moment to bring practical ideas to the table and learn from what’s already working. We’ll be joined by MEP Peter Liese, EEB’s Policy Manager Luke Haywood, and Zofia Wemánska, Co-Founder of the Reform Institute, among others, for a conversation focusing on designing fair and effective compensation mechanisms.
Co-organised with the European Environmental Bureau, Zukunft KlimaSozial and T&E, the event will include a keynote, a panel discussion, and a networking moment to wrap things up: you can discover the full programme HERE.
To attend in-person, registrations are open! Sign-up HERE.
The EPICO Policy Accelerator™: Where Ideas Turn Into Action
Good policy needs structure, speed, and strategic thinking. That’s where EPICO’s flagship format, the Policy Accelerator™, comes in. Since 2021, we’ve been using this unique approach to turn complex climate and energy challenges into concrete, actionable policy solutions. Each Accelerator brings together experts from politics, business, science, and civil society in a tightly structured, multi-stage process built around collaboration, creativity, and critical input.
What makes the EPICO Policy Accelerator™ different? We go beyond traditional workshop formats by applying a design thinking methodology to policy development. Diverse working groups tackle defined challenges in energy, industry, and climate, then refine their proposals with feedback from external Challengers, respected figures from across sectors who stress-test assumptions and sharpen the outputs. The result is high-quality proposals grounded in both expertise and political realism.
Every Accelerator ends with a clear deliverable: a concise, evidence-based policy brief designed to feed directly into national or European policymaking. From hydrogen to industrial resilience to carbon management, the Accelerator is where we translate complexity into clarity, and vision into impact. Delivered in partnership with leading actors across sectors, the format is one of EPICO’s key tools for building alliances, connecting insights, and making progress happen.
You can explore all our past policy accelerators HERE.
EPICO is growing!
We’ve set up a new desk in our Brussels office, as we welcomed our new Policy Assistant for Industry & Energy, Joen Martinsen! Aside from making our team more international and fuller of fresh energy, he will also be supporting our work on advancing decarbonisation of hard-to-abate sectors, focusing in particular on the steel industry. A recent graduate from ESPOL in Lile, he wrote his dissertation on how niche private interests can disrupt optimal policy coherences to support the development of green hydrogen in Europe, with a focus on initiatives like the ETS and RED. Reach out to him to learn more about his work at EPICO!
Spotted: EPICO in the Media
- EPICO's CEO Bernd Weber joined the Jolt podcast to discuss the consequences of a possible German split of its single electricity price zone. Listen to the episode here.
- Montel News featured Bernd Weber’s warning on the economic consequences of a bidding zone split for Germany’s industry. Read it here.
- EURACTIV quoted EPICO's CEO Bernd Weber in its remarks on the fierce political resistance to splitting Germany’s power market. Check it out here.
- Bernd Weber's comments on the future of German electricity prices were reported by Handelsblatt. Read it here (in German).
- EPICO's CEO Bernd Weber was quoted in Münchner Merkur on the ENTSO-E report recommending Germany's split into bidding zones. Read it here (in German).
- Bernd Weber’s take on the future of Germany’s electricity bidding zones was featured by the Financial Times. Find it here.
- EPICO's CEO Bernd Weber shared his thoughts with Table.Media on how Germany can avoid a costly division of its electricity price zones. Read it here (in German)
- In Table.Media, EPICO’s Policy Specialist Simon Munkler made the case for a pragmatic balance between efficiency and emission cuts in the GEG. Check out Simon’s Op-Ed here (in German).
- Energate Messenger highlighted our latest study calling for special purpose vehicles to unlock private investment for the energy transition. Learn more here (in German).
Are you a climate and energy journalist looking for new voices to interview? REACH OUT to EPICO’s Senior Communications Specialist Agata Gurgenidze (Germany) and EU Communications and Media Specialist Michela Sandron (EU).