Measuring the degree of economic opening in the German electricity market

Barriers to entry can cause differences between “legal” and “economic” degrees of market openness. The German electricity market is legally 100% open. The industrial segment is also close to being economically 100% open. The general pattern indicates a mature market. However, the domestic segment is economically only 61% open. Possible explanations of this difference from its legal openness are mismatch of regulation and market strategies of incumbents. For the total market, the economic degree of market openness is 89% based on volumes. It is 61% based on customer numbers, reflecting the fact that the vast majority of customers are domestic.