- Distribution Network
- Transmission Network
- Generation and Wholesale Market
How Germany is using data, legislation and system planning to enable a flexible energy system responsive to the changing needs of the energy transition.
This case study is supplied by Nicolas Krieger, Technical Regulatory Advisor at BNetzA, the federal energy network agency in Germany.
Grid expansion in Germany has not been able to keep up with the rapid growth of renewable energy sources (RES). Today, energy for industrial centres in south Germany is transported over longer distances, and increasingly with renewable electricity from the north. But the grid was originally built to supply electricity from large power plants that are closely positioned to load centres. It is not set up to sustainably manage the task.
In the medium term, grid overloads that may arise from needing to carry energy over longer distances will be managed by extending the grid network. Until then we are using congestion management across the country, which mainly involves:
- ‘redispatch’, a planning process
- Einspeisemanagement (‘EinsMan’), a legal instrument on feed-in management of RES and Combined Heat and Power (CHP) plants. EinsMan is a last resort to ensure system security.
Nuclear and coal energy phase-out in Germany means there will be different power sources in the future. This new energy landscape will consist of smaller and more dispersed power sources, resulting in new challenges for redispatching transmission capacity across the network. It could also mean grid operators will have few or no alternatives to redispatch with RES and CHP plants in the future.
To continue to guarantee secure grid operation and ensure sufficient potential for redispatching capacity, we have had to adapt Germany’s congestion management system.
We have developed a combined approach across existing instruments, resulting in ‘Redispatch 2.0’. It sets out:
- Feed-in priority of RES and CHP plants should have clear and comprehensible rules through which grid operators can manage congestion.
- It should be mandatory for smaller plants to be available for Redispatch 2.0 to increase available capacity for redispatch potential.
- Grid operators should have greater cooperation, with all downward redispatching balanced between grid operators.
Across Europe, European law (EU Regulation 2019/943) has already set the framework to reduce feed-in from RES and CHP plants in congestion management. As redispatching grid capacity is cost-based in Germany, we needed new rules deteermining when RES and CHP can be redispatched downwards. Our resulting changes to the German Energy Industry Act (EnWG - Energiewirtschaftsgesetz), part of the amendment to our Transmission Grid Expansion Acceleration Act (NABEG 2.0 - Netzausbaubeschleunigungsgesetzes Übertragungsnetz) are based on the EU Regulation.
The new legal framework will apply from 1 October 2021 and will transfer the EinsMan instrument into the redispatch planning process. Within this, the threshold for mandatory participation in redispatch will be lowered to 100 kW for all generators.
BNetzA, as Germany’s federal regulatory agency for the energy network, has also published the following decisions:
- Decision on the balancing of redispatch actions mass communication processes dealing with the data exchange of redispatch
(Festlegungsverfahren zum bilanziellen Ausgleich von Redispatch-Maßnahmen sowie zu massengeschäftstauglichen Kommunikationsprozessen im Zusammenhang mit dem Datenaustausch zum Zwecke des Redispatch)
This decision regulates how we balance downward redispatching. This is a major challenge, as restricting RES and CHP plant generation has not been balanced within the process so far. In addition, many renewable energy sources are supply-dependent, so their feed-in is more difficult to forecast.
The decision defines communication processes, including the roles, responsibilities and tasks of individual market participants. It also lays the foundations for comprehensive digitalisation of necessary market communication with respect to redispatch.
- Decision for the grid operator coordination in redispatch actions
(Festlegungsverfahren zur Netzbetreiberkoordinierung bei der Durchführung von Redispatch-Maßnahmen)
In Redispatch 2.0, grid operators can access resources in other grids to resolve their own congestion issues. They must also optimise measures across grids. This decision ensures network operators have the necessary data to do so.
- Decision for provision of information for redispatch actions
(Festlegungsverfahren zur Informationsbereitstellung für Redispatch-Maßnahmen)
This decisiondefines the data that must be transmitted to grid operators by responsible parties for generation and electricity storage. It improves the data basis grid operators have for redispatch solutions.
- Decision detailing the terms regarding efficiency factors (efficiency factor decision)
(Festlegung von näheren Bestimmungen im Zusammenhang mit den Mindestfaktoren (Mindestfaktor-Festlegung))
In Redispatch 2.0, RES and CHP generation plants are in the same planning process as conventional power plants. In cost-based selection decisions, the priority of feed-in is ensured via an imputed price. With this, grid operators can observe minimum thresholds. These reflect the effectiveness of downward redispatching of RES and CHP plants, in contrast to use of conventional power plants. We have set minimum thresholds of 5 for CHP and 10 for RES.
BNetzA is currently overseeing the market participators implementing these to apply from 1 October 2021, timing with the new legal framework conditions. In doing so, new IT processes and structures will have to be established at almost all the 900 grid operators in Germany. Redispatch 2.0 is therefore also a digitalisation project.
Impact and outcomes
The new legislation has propelled a new awareness among market participants (especially grid and plant operators) on their roles and responsibilities in congestion management within the energy transition.
Looking ahead, we will be able to carry out forecasts and measures more accurately via consistent data supplied from all grid operators and from overall grid optimisations. Being able to draw on resources from other grids will also help minimise the need to downward redispatch RES and CHP plants. Meanwhile, having the system operator balance all downward redispatching will cut system balance risks and establish equal treatment of RES and CHP plants with conventional plants.
Progress made in preparatory grid operator and market participant projects makes a targeted and timely implementation of the Redispatch 2.0 project appear realistic. But these are major changes, and we expect initial challenges.
One challenge will be measuring the success of Redispatch 2.0. For example, it is difficult to compare individual years with others when the amount of energy you redispatch depends on dynamic external factors such as grid expansion need, weather, or electricity trading in Europe.
Nevertheless, we believe Redispatch 2.0 will make German congestion management more flexible and better able to respond to the changing system needs of the energy transition. From an EU perspective, Redispatch 2.0 may also serve as an example for other Member States on using the provisions of EU Regulation 2019/943, if a cost-based approach is chosen. BNetzA is in close contact with other national regulatory authorities on different schemes for redispatching within Europe.
To find out more, contact BNetzA at Nicolas.Krieger@bnetza.de
Redispatch 2.0 indirectly benefits consumers. The combined planning and congestion management approach enables cross-grid coordination, increasing efficiency in grid management and in turn lowering network operation charges that ultimately we all pay for in our energy bills.
System security is strengthened, with legally required feed-in priority for RES and CHP plants specified, and compliance ensured via minimum thresholds.