Criticism on Federal Network Agency Decisions on Redispatch Measures

The Federal Association of the Energy and Water Industry (BDEW) has voiced strong criticism regarding two decisions by the 6th and 8th Ruling Chamber of the Federal Network Agency (BNetzA) on redispatch measures, i.e. interventions of the transmission operators into the operation of power plants connected to their grids in order to avoid or overcome grid congestion.

On 31 October 2012 the 6th Ruling Chamber (BK6) issued a decision on the standardisation of the contractual framework for interventions of transmission system operators in the operation of power plants. On the same day the 8th Ruling Chamber handed down a decision on criteria for determining an adequate compensation for electricity-related redispatch measures and voltage-related adjustments of active power.

Following Germany’s energy policy shift towards a renewable energy supply and the immediate shutdown of eight nuclear power plants after the nuclear accident in Fukushima Japan in 2011, transmission system operators needed to resort much more frequently to redispatch measures to stablise the grids, BNetzA pointed out in its report on the winter 2011/12 season. Already in late April of 2011 BNetzA had presented a proposal for a standardisation of redispatch rules to ensure network stability.

The decisions handed down on 31 October 2012 were heavily criticised by the Federal Association of the Energy and Water Industry (BDEW).

The decisions did by no means lay down adequate rules, on the contrary, they threatened the economic viability of thermal power plants instead of granting them a fair and adequate compensation for stablising the grids through redispatch measures, Hildegard Müller, head of BDEW said. They did not meet BDEW’s main demand that the owner of a power plant whose generator output level was altered should be fully compensated as if the intervention had not happened, making sure he was not worse off compared with  other market players. As long as main costs and expenses were not acknowledged and remunerated, the compensation was not fair and adequate Mrs Müller emphasised. Besides, BNetzA had laid down a de minimis limit up to which power plant operators would only get a lump sum compensation based on the electricity prices of the last four weeks, Mrs Müller said. She also criticised that redispatch measures considerably limited the flexibility of storage power plants without being adequately compensated for.

BDEW said it expected law suits as thermal power plants that stablised the grids were denied an adequate compensation while renewable power plants which were largely responsible for grid congestions received (fixed) feed-in tariffs (pursuant to the Renewable Energy Sources Act – EEG) that were six to eight times higher than the average electricity prices at the EPEX power exchange.

Source: Federal Network Agency, decision of 31 October 2012 by 6th Ruling Chamber (BK6) and decision of 31 October 2012 by 8th Ruling Chamber (BK8); BDEW

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