BNetzA: Consultation on Draft Withdrawal of Decision on Redispatch Measures and Compensation

In 2012 the federal grid regulator (BNetzA) issued a decision for interventions in the operation of conventional power plants by the transmission system operator in order to stabilise the grid (redispatch measures). After the Higher Regional Court of Düsseldorf recently annulled these decisions in thirteen cases, BNetzA is now planning to retroactively withdraw its decision and is asking for comments on its draft decision by 22 July 2015.

1. BNetzA in 2012: Decision on Redispatch Measures

On October 30, 2012, BNetzA issued a decision (BK8-12-019) laying down criteria when and in which order power plant owners can be required by the transmission system operators to reduce or increase the output of power plants. Furthermore BNetzA had handed down a decision determining what it considered adequate compensation. Based on this decision operators subject to redispatch measures are generally only reimbursed for (direct) costs resulting from the measure (Aufwandsersatz), in particular fuel costs, based on average hourly contracts at the spot market of the power exchange. Only if redispatch measures reach more than 10% of the output of a plant in the previous year, a higher compensation can be paid.

2. Criticism of the BDEW

Early on already, the Federal Association of the Energy and Water Industry (BDEW) voiced strong criticism regarding the decision on redispatch measures. 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 stabilising the grids through redispatch measures, Hildegard Müller, head of BDEW said.

3. OLG Düsseldorf: Annulment the decision of BNetzA

On 28 April 2015, the 3rd Cartel Senate of the Higher Regional Court of Düsseldorf (OLG Düsseldorf) annulled the redispatch decision of BNetzA in thirteen cases (e.g. VII-3 Kart 332/12). The compensation for the operations by the transmission system operator was too restrictive, OLG Düsseldorf held. Further costs related to the redispatch as well as lost profits were generally recoverable, the court said, pointing out that Section 13 para 1 a EnWG (German Energy Act) stipulated that in the case of redispatch measures “adequate compensation” had to be paid. BNetzA had discretion to determine how to take further costs and lost profits into consideration, e.g. by a lump sum payment or an individually calculated payment.

4. Proposal BNetzA: Retroactive withdrawal of the decision

For the cases decided by OLG Düsseldorf, BNetzA expressly waived its right to appeal against the decisions.

In addition, BNetzA is now proposing to completely withdraw its decisions on redispatch measures (BK8-12-019-A). The initial decision was intended to provide a uniform specification for all market participants for an adequate compensation for redispatch measures. Due to the decision of the OLG Düsseldorf, this is no longer the case. Since the decision has already been annulled in the thirteen cases by the court, the equal treatment of all market participants required that the decision of BNetzA be completely withdrawn with effect from 17.12.2012. The withdrawal with retroactive effect shall lead to higher compensation for power plant owners on the basis of the court decision.

BNetzA has made a draft of its intended withdrawal decision available for comment on its website, and is asking for comments by 22 July 2015.

Source: Bundesnetzagentur

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