20 years ago today

Looking back, it’s clear just how rapidly the energy sector has transformed over the past two decades. Let’s take a look at these developments—and at the key events that shaped the energy industry in 2006.

September 2006:

• We’ve heard this before…: In September 2006, the CDU/CSU parliamentary group in the Bundestag called for the accelerated expansion of the German electricity grid in an official position paper. According to the parliamentary group’s deputy chair, Katherina Reiche, the rapid expansion of the grids would be made possible by the new Acceleration Act. The parliamentary group hoped that this, together with the expansion of power station capacity, would strengthen competition. Source: Energy News (available for download)
• How wrong one can be…: On 9 October 2006, the then Federal Minister for Foreign Affairs, Frank-Walter Steinmeier, emphasised at the Federal Government’s second energy summit: “Russia is and remains a key factor in our energy supply, particularly in the gas sector”. In order to preserve the mutual and equal interdependencies between Russia and the EU, this even requires greater interdependence in the energy sector, Steinmeier said in his speech.^[1] From today’s perspective, this phase of German foreign policy is viewed critically. The assumption that economic interdependence in the energy sector leads to lasting political stability (‘change through trade’) was disproved by February 2022 at the latest, with the start of the Russian invasion of Ukraine.
• Good things take time…: In October 2006, the European Commission granted the French energy supplier Électricité de France (EDF) permission to build a reactor with a rated output of 1,630 MW at the Flamanville site. The EPR (European pressurised water reactor) was due to be connected to the grid in 2012, with construction costs estimated at around 3.3 billion euros.^[2] Ultimately, the construction of the reactor cost over 13.2 billion euros, and the start of commercial operation was delayed by 14 years until May 2026.

What else happened:

• Pension debate: On 24 October 2006, the CDU/CSU and SPD coalition finally agreed on a retirement age of 67. Under the plan, the retirement age was to be raised gradually from 65 to 67 between 2012 and 2029. Employees who have paid contributions for 45 years would still be able to retire at 65 without any reduction in their pension.
• Share trading: On 19 October 2006, the Dow Jones Industrial Average closed at around 12,012 points at the end of floor trading, exceeding 12,000 points for the first time in the history of daily readings. This means that the value of the constituent companies has doubled since 1986. Today, the index stands at around 53,000 points.
• Energy prices: In September 2006, the price for the 2007 calendar year’s electricity stood at around 56 euros per MWh. Emissions allowances were trading at around 16 euros per tonne.

^[1] https://www.auswaertiges-amt.de/de/newsroom/061009-energiegipfel-219668

^[2] https://ec.europa.eu/commission/presscorner/detail/de/ip_06_1450

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June 2006:

• There have been crises in the past too: in early June 2006, the price of a barrel of crude oil reached a record high of USD 73.70 following comments by Iran’s Supreme Leader, Ayatollah Ali Khamenei. The Ayatollah had stated that oil supplies from the region would be seriously jeopardised in the event of an American attack on Iran. He added that the US would not be able to protect all ships in the Strait of Hormuz. Iran had previously emphasised that it did not intend to use its oil reserves as a weapon in the nuclear dispute. Currently, the front-month price for a barrel of Brent crude stands at USD 97.81, which is around USD 25 per barrel higher than 20 years ago.
• … and relief measures: In June 2006, the German government sought to relieve energy-intensive industries of the costs associated with electricity from renewable sources. Under the plan, the Federal Network Agency was to monitor energy suppliers to ensure they did not charge excessive electricity costs for renewable energy. At that time, renewables accounted for 12 per cent of the electricity generation mix – following nuclear power at 27 per cent, lignite at 23 per cent, hard coal at 21 per cent and natural gas also at 12 per cent. The base price for Cal 2007 stood at 53.45 EUR/MWh on 2 June 2006. In May 2026, the share of renewable energy was approximately 76.7 per cent, and the closing price for a base supply contract in 2027 stood at 94.66 EUR/MWh on 2 June 2026.

What else happened:

• Germany’s ‘summer fairy tale’ began: the 18th FIFA Men’s World Cup kicked off on 9 June 2006 with the match between Germany and Costa Rica. Thirty-two nations competed for the title in twelve German cities until 9 July. In the opening match, the German national team won 4–2 and finished third at the end of the tournament following a 3–1 victory over Portugal.
• Secretly, quietly and discreetly: After the Bundestag had decided in May 2006 to raise VAT from 16 to 19 per cent with effect from 1 January 2007, the Bundesrat also approved the most extensive tax increase in the history of the Federal Republic in June.
• Better late than never: The German Bundestag passed a Consumer Information Act for foodstuffs and consumer goods, as well as a General Equal Treatment Act, commonly referred to as the Anti-Discrimination Act.

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March 2006:

• While the base price for the calendar year Cal 2007 was still at 45 euros/MWh at the end of November 2005, the price for the same product rose to 57.40 euros/MWh by the end of March 2006—that is, about 20 years ago. By comparison: The closing price for the current front-year base contract Cal 2027 stood at 92.47 euros/MWh on March 19, 2026. 
• Prices for emission allowances (European Union Allowances, EUA) for Cal 2006 and Cal 2007 ranged between 27 and 28 euros/ton at the end of March 2006. Today’s EUA prices for Cal 2026 and 2027, at 65–68 euros/ton, are more than double that level.
• On March 30, 2006, the gas price for 2007 on the TTF stood at 28.45 euros/MWh. On March 19, 2026, the closing prices for 2027 were 38.87 euros/MWh.
  “Everything used to be better”: In Turin, the XX Winter Olympic Games will conclude with a closing ceremony on February 26, 2006. With eleven gold, twelve silver, and six bronze medals, the German team is the most successful.
• “Things weren’t better in the past”: In February 2006, Vernor Muñoz Villalobos, the education expert for the UN Human Rights Committee, criticized the German education system. His main points were the three-tiered school system, the lack of integration of children from immigrant backgrounds, and the close link between social background and educational success.
• “Everything stays the same”: In early January 2006, the state-controlled Russian energy company Gazprom suspends gas deliveries to Ukraine for several days after the two countries fail to reach an agreement on a gas price increase. In Germany, the gas dispute between Moscow and Kyiv sparks renewed debate about dependence on foreign energy sources.

Want to know more? We have selected a 20-year-old newsletter for you and hope you enjoy diving back into the past.

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