Germany’s Bundesnetzagentur, the regulatory body overseeing the country’s energy grid, has announced a proposal aimed at providing financial relief to power consumers. 

The plan involves gradually phasing out payments currently made to smaller, conventional power generation units over a three-year period, starting from 2026 and ending in 2028, according to a Reuters report.

Phasing out payments

These payments are intended to incentivise these units to maintain operational readiness, ensuring they can quickly ramp up power generation to stabilise the grid in times of supply fluctuations or disruptions.

By removing these payments, the regulator estimates that power customers will collectively save 1.5 billion euros (equivalent to $1.71 billion) over the three-year implementation period. 

This cost-saving measure will be gradually implemented to avoid any sudden shocks to the market and to provide time for affected power generators to adjust their business models.

Shift to renewable energy

The Bundesnetzagentur’s proposal reflects a broader shift in Germany’s energy landscape, as the country continues to expand its renewable energy capacity and modernize its power grid. 

As renewable energy sources like wind and solar become increasingly prevalent, the need for conventional power plants to provide grid stability services may diminish. 

This has led the regulator to reconsider the necessity of these payments, which ultimately add to consumer electricity bills.

The fees, established 25 years ago during the nascent stages of renewable energy sources like wind and solar power, were designed to compensate small-scale electricity producers. 

These producers played a crucial role in maintaining the stability of public distribution grids by feeding locally generated power into them. 

This local power supply became particularly vital during periods when the intermittent nature of renewable energy sources, such as wind and solar, resulted in fluctuations or reductions in power output.

Conventional power, also known as baseload power, refers to the generation of electricity from sources that can provide a stable and consistent output of energy. These sources are typically fossil fuels, such as coal, natural gas, and oil, which are burned to generate steam that drives turbines and produces electricity. 

These power plants are designed to operate continuously, providing a reliable source of electricity to meet the baseload demand, which is the minimum level of electricity required to meet the needs of consumers at any given time.

Unlike renewable energy sources, such as solar and wind power, which are intermittent and depend on weather conditions, conventional power plants can operate around the clock, regardless of the weather. 

Payments

However, conventional power generation also has significant environmental impacts, primarily due to the burning of fossil fuels, which releases greenhouse gases and contributes to climate change. 

Additionally, the extraction and transportation of fossil fuels cause environmental damage, including air and water pollution, and land degradation.

The German regulator stated that the payments are no longer needed due to the high volumes of green power, which has eliminated the need for balancing at local low voltage levels.

Instead, the transmission of power was shifted to higher voltage lines that could cover greater distances. This allowed these high voltage lines to supply more power locally, especially when renewable energy sources were not producing sufficient levels of energy.

The technical robustness and digitalisation of grids have advanced over the last 25 years to support the growth of low-carbon energy sources.

President of the Bundesnetzagentur authority, Klaus Mueller, stated that the fees in question have transformed into an unnecessary subsidy that lacks economic justification.

The deadline for the consultation period regarding the move is May 23, according to the report.

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BP shares climbed by more than 5% on Wednesday after hedge fund Elliott Management revealed a 5.006% stake in the British oil major.

The stock was up 5.11% at 10:12 a.m. London time, partially reversing its declines year-to-date.

The jump follows Elliott’s regulatory filing late Tuesday, which confirmed its holding in BP, now making it one of the company’s significant stakeholders alongside BlackRock, Vanguard, and Norway’s sovereign wealth fund.

Elliott’s holding, executed through equity swaps, does not carry voting rights but reflects an intent to influence direction by aligning with other shareholders.

According to Reuters, the hedge fund has already engaged with over 20 of BP’s largest active investors to build support for its agenda.

Elliott calls for deep spending cuts and higher returns

Elliott’s proposals centre on improving BP’s financial performance by trimming annual capital expenditure to $12 billion from its current range of $13–$15 billion and driving free cash flow up from $8 billion in 2023 to $20 billion by 2027, Reuters reported citing sources.

The fund argues this can be achieved through extensive cost-cutting, particularly in administrative spending.

In private discussions, Elliott has also called for divestments of BP’s solar and offshore wind businesses, describing the company’s renewable ventures as underperforming and distracting from core operations, the sources told Reuters.

These proposals reflect a broader push to reverse BP’s transition strategy, launched in 2020 under former CEO Bernard Looney and continued by current chief executive Murray Auchincloss.

BP responded on Wednesday by stating that it “welcomes constructive feedback from all shareholders,” while reiterating that it has received positive responses from many investors regarding its existing strategy.

Elliott dissatisfied with BP’s executive team despite oil push

The renewed scrutiny comes at a time of strategic recalibration within BP.

In February, the company confirmed it would invest $10 billion in oil and gas projects through 2027, dialling back previous commitments to slash emissions by 40% by 2030.

It now targets a reduction between 20% and 30%, citing the need to maintain oil and gas output to meet global demand.

BP’s decision to scale down its green ambitions has drawn mixed reactions.

Legal and General, the firm’s seventh-largest shareholder, expressed “deep concern” earlier this month about the renewed emphasis on fossil fuels.

However, many energy analysts have applauded the pivot as more pragmatic given market dynamics and recent oil price volatility.

The company’s top leadership has also come under pressure.

Although Auchincloss and Chair Helge Lund were retained following the board’s recent re-election vote, both saw a reduction in support from shareholders.

Elliott is reportedly dissatisfied with BP’s broader executive team and has suggested underperformance has not been adequately addressed.

Analysts see takeover potential amid strategic shakeup

BP’s underperformance relative to peers like Shell and ExxonMobil has long frustrated investors.

The company’s stock has lagged rivals even as oil prices rebounded post-pandemic.

With a major activist now in play and continued volatility in oil markets driven by trade tensions between the US and China, BP is once again being floated as a possible takeover candidate.

Energy commentators have suggested that Shell or US oil majors like Chevron and ExxonMobil could consider acquisition bids, particularly if BP continues to streamline its portfolio and enhance returns.

Elliott’s intervention could act as a catalyst in this direction.

BP is set to report its first-quarter earnings on Tuesday.

The company has already warned of lower upstream production and higher net debt compared to the final quarter of 2024, setting the stage for a closely watched update amid ongoing strategic flux.

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The European Union has launched a sweeping enforcement action against Apple and Meta, accusing the tech giants of breaching the Digital Markets Act (DMA) with business practices that allegedly restrict competition and harm consumer choice.

Apple has been fined €1.8 billion for preventing app developers from directing users to cheaper alternatives outside its App Store.

Meanwhile, Meta is under scrutiny for its “pay-or-consent” model on Facebook and Instagram, which EU regulators say undermines data protection rules. Both companies must comply within two months or risk additional penalties.

Apple fined €1.8B for App Store restrictions

Apple’s financial penalty stems from what the European Commission described as “technical and commercial restrictions” that discouraged developers from informing users of alternative purchase options outside the iOS App Store.

According to regulators, these actions constitute a clear breach of the DMA, which came into force in May 2023 to address anti-competitive behaviour by so-called gatekeepers — large platforms that act as access points between businesses and users.

The Commission’s investigation revealed that Apple not only hindered app developers from promoting cheaper subscriptions or services outside its ecosystem, but also implemented practices that dissuaded users from exploring third-party options.

Despite Apple introducing changes to its browser settings — a move regulators deemed compliant — it was still charged for restricting sideloading and imposing what’s called the Core Technology Fee on developers using alternative distribution channels.

Meta’s pay-or-consent model flagged

Meta is also under the spotlight for a controversial model rolled out in November 2023. Under this framework, Facebook and Instagram users in the EU must either agree to be tracked for targeted ads or pay a monthly fee for an ad-free experience.

The European Commission argues this model infringes on the DMA by not offering a genuine alternative to data tracking.

Although Meta is in ongoing talks with EU regulators to revise the model, the Commission has insisted the current system fails to respect user consent in line with legal standards.

The regulator said the binary option effectively coerces users into accepting tracking, thereby compromising fair choice and competition.

Meta, which continues to challenge the ruling, stated that it was being unfairly targeted compared to its European and Chinese counterparts.

Separate Apple probe dropped after compliance

Apple managed to avoid further sanctions in a separate investigation focused on browser and search engine choices on iPhones.

The Commission confirmed on Wednesday that changes introduced by Apple — enabling users to easily switch to rival browsers and search engines — were sufficient to comply with the DMA. As a result, that particular inquiry has now been closed.

Nonetheless, Apple remains under pressure due to broader issues with how it manages app distribution. The Commission criticised the company’s conditions for alternative app stores, arguing that they include disincentives for developers and fail to offer a level playing field.

The introduction of the Core Technology Fee was flagged as a significant barrier for developers seeking to distribute apps outside the official App Store.

Meta’s Marketplace no longer a gatekeeper

In a minor reprieve for Meta, the Commission said it would no longer classify Meta’s Marketplace as a gatekeeper service under the DMA.

This decision follows a reported decline in its number of active users, bringing it below the required threshold for such designation.

While this provides limited relief, the company still faces broader challenges in meeting compliance obligations within the digital advertising ecosystem.

Both Apple and Meta have two months to align with the new EU directives or face additional sanctions that could include daily fines of up to 5% of their global revenue.

The EU’s actions mark a significant escalation in regulatory oversight aimed at reining in the market power of Big Tech across Europe.

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Investors have been cautious with US stocks in recent weeks amidst fears that Trump’s new trade policies could push the world’s largest economy into a recession.

Still, Mitchell Green – the founder of Lead Edge Capital says he’s “not afraid of a recession.”

In fact, in his recent interview with CNBC, the market veteran went on to call a recession one of the “best times to invest.”

That said, the macro uncertainty has pushed the benchmark S&P 500 index down nearly 15% over the past two months.

Green says ‘fortunes are made during recession’

Financial markets tend to take a breather during a recession, which could end up creating exciting opportunities for long-term investors in the back half of 2025, according to Mitchell Green.

“Fortunes are made during recession,” he argued in a recent interview, adding those interested in the secondary market should consider buying when others are forced to sell.

Following this strategy could help generate an “absolute ton of money,” the seasoned expert added.   

Note that Lead Edge Capital currently has stakes in renowned names like Uber and Spotify. At writing, the growth equity firm has about $5.0 billion in assets under management.

What is a secondary market?

A secondary market refers to buying and selling of existing investments, rather than newly issued ones.

It allows investors, typically Limited Partners (LPs), to sell their stakes in private equity funds before the fund reaches the end of its lifecycle. This provides liquidity in an otherwise illiquid asset class.

According to Mitchell Green, a recession could push several LPs that are over-allocated to private equity into selling, which will be “amazing for businesses like ours and others that can take advantage of it.”

Note that Lead Edge Capital invests rather aggressively in Chinese equities as well. Its founder Mitchell Green is convinced that Beijing remains investable despite the escalating trade war with the Trump administration.  

Lead Edge to keep stake in TikTok parent company

Green expects the Chinese economy to be “much bigger” in 20 years than it is today.

In his CNBC interview, the market expert also confirmed that Lead Edge plans on keeping its stake in ByteDance irrespective of whether the US moves to ban TikTok or not.

The growth equity company already factored in the possibility of a ban on TikTok US. So, such a development won’t change “one iota of our investment thesis,” he added.

Lead Edge is bullish on TikTok as it’s an incredible company, with an amazing management team, and massive tailwinds, which will help it “make a great return with just China and the rest of the world.”

Mitchell Green is positive on Beijing even though the iShares MSCI China Multisector Tech ETF (TCHI) has lost some 20% since mid-March.

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