New Record: EUR 1.4 Billion Costs for Network and System Security Measures in 2017

On 18 June 2018 the Federal Network Agency (BNetzA) published the report on network and system security-measures for 2017.  Cost increased to EUR 1.4 billion, far above the EUR 880 million for 2016 and EUR 1.1 billion for 2015.  Redispatch and feed-in management measures are taken by the grid operators to maintain network and system security.  Due to substantially increased renewable energy generation that could not be handled by the existing grid without costly measures by the grid operators, network and system security measures have increased significantly in 2017.

Network and System Security Measures

As desired as record increases in renewable energy production may be on the one side, they also lead to challenges for the power grid on the other side.

The Germany Energy Act (EnWG) authorises and obliges network operators to take certain grid measures if the security and reliability of the energy supply system is endangered.  As Germany has consistently exceeded its plans to increase renewable energy generation, and as it has not been possible to change the German electricity quick enough to fully handle the additional and intermittent generation from the new plants, grid operators have to resort to costly network and system security measures to keep the grids from collapsing.

The EnWG provides for different grid measures in these cases:

  • Redispatching: Reducing and increasing electricity feed-in from market active power plants
  • Reserve power plants: Deployment of reserve power plant capacity to compensate for a deficit of redispatch capacity
  • Feed-in management: Curtailment of energy feed-in of renewable sources and combined heat and power plants

The network operators have to reimburse the power plant operators for these measures. If all these measures are insufficient to  maintain the security and reliability of the energy supply system the network operators can make use of “Adjustment Measures” as stipulated in § 13 para 2 EnWG.

  • Adjustment measures: Adjustments of feed-in and/or offtake of electricity at the network operator’s request without compensation for costs

Network and System Security Measures Taken in 2017

After a decline of the network and system security measures in 2016 mainly due to less wind, these measure rose significantly in 2017, reaching a new record.

Redispatch Measures

Redispatch measures rose from 11,475 GWh in 2016 to 18,455 GWh in 2017. This included about 10,200 GWh of curtailment and some 10,238 GWh of additionally ordered capacity from market active power plants.  According to preliminary estimates of the TSOs, the costs incurred by the market power plants amounted to approximately  EUR 396.5 million plus about EUR 26.6 million for countertrading measures.  Compared to 2016, estimated costs increased by around EUR 173.9 million (2016: EUR 222.6 million).

Reserve Power Plants

In 2017 additional capacity from reserve power plants was ordered in the amount of 2,129 GWh on 147 days.  Compared to 2016 this is an increase of 920 GWh (2016: 1,209 GWh). According initial estimates of the TSOs, the costs for the additional capacity were around EUR 182.3 million.  Capacity costs (Vorhaltekosten) amounted to 232.8 million euros.

Feed-in Management

Curtailment of renewable energy installations reached a new record of 5,518 GWh in 2017, BNetzA reported.  The costs for the reimbursements of renewable power plants operators increased from EUR 373 million in 2016 by EUR 237 million to EUR 610 million in 2017.  In other words: Renewable energy plant generators in 2017 were paid EUR 610 million for power that they did not produce (but could have produced).

Adjustment Measures

In 2017, three distribution system operators (in Saxony-Anhalt, Brandenburg and Thuringia) used adjustment measures in a volume of 34.5 GWh.  Compared with 2016, the amount of adjustment measures increased by around 30.5 GWh (2016: 4.0 GWh).  However, BNetzA stated that no trend can be seen from this still minimal level.

Summary of the measures in 2017 (in GWh) Q 1 Q 2 Q 3 Q 4 total
Redispatching 8,470 3,192 2,144 4,649 18,455
Reserve power plants 1,504 53 56 515 2,128
Feed-in management 1,412 1,364 435 2,307 5,518
Adjustment measures 6 2.2 2.1 24.2 34.5

The increase of Network and System Security-Measures means also an increase of costs. The costs in 2017 amounted to EUR 1.4 billion. This is very much above the costs of the low-wind year 2016 (around 880 million euros) but also considerably above the previous record year 2015 (approx. EUR 1.1 billion). In particular, the costs for feed-in management measures have increased substantially.

Reasons for Increase of Network and System Security-Measures

Especially the first quarter of 2017 was crucial for the high amount of redispatch measures BNetzA reported.  An unusual load flow situation in Germany and a Europe-wide cold spell led to an additional burden on the power grids.  In addition, according to preliminary data of the TSOs, 2017 was the year with the highest feed-in from wind turbines.  Thus, in the windy fourth quarter of 2017, the highest amount of renewable energies was curtailed.  More and more offshore wind farms are affected by feed-in management measures.

BNetzA president Jochen Homann said that these costs would have been even higher without the commissioning of the second circuit of the 380kV power line known as the Thuringian Power Bridge in September last year.  It reduced the load of the “Remptendorf-Redwitz”  line from 1,836 hours (Q4 2015) to only around 18 hours (Q4 2017).  Nevertheless the costs for redispatch and feed-in management measures reached a new record.  Theses costs show the still high demand for grid expansion in order to transport renewable energy to the consumer.  In the long run only grid expansion can reduce the costs for grid and system security measures,” said Mr. Homann.

Sources: Press release of BNetzA, BNetzA’s Report on Grid and Systems Safety Measures 2017, BNetzA’s data on redispatch measure.

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