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Glossary · Energy industry & energy transition

Congestion management

congestion management grid operation grid security redispatch Curtailment Feed-in Management grid congestion control technology ancillary service

Congestion management comprises all measures by which grid operators avoid or remedy overloads in the power grid. A grid bottleneck arises when a line, a transformer or another piece of equipment would be loaded more heavily by expected or actual power flows than the technical safety rules allow. Congestion management mainly changes where and when electricity is fed in or drawn and how it flows through the existing grid. Total demand generally remains the same. However, individual measures can deliberately change the electricity consumption of specific installations, such as storage facilities or contractually bound switchable loads.

What matters is not the amount of electricity a line transports over a year, but its load at any given moment. This depends on the power in megawatts, on the physical power flows in the meshed grid, on the voltage level, the ambient temperature, the grid switching state and the limit values of the equipment. A bridge offers a useful comparison: over the year, perhaps only a moderate number of cars cross it. But if they all arrive in the same hour, a traffic jam still occurs. Likewise, a line may be only lightly utilised on annual average and still become a bottleneck in individual hours.

Legal framework in Germany

The central provision is Section 13 of the Energy Industry Act (EnWG). If the security or reliability of the electricity system in their control area is endangered or disrupted, the transmission system operators may and must intervene. The law names three groups of measures for this purpose: grid-related measures such as grid switching, market-related measures, and additional reserves such as the grid reserve and the capacity reserve. Market-related measures include the use of balancing energy, adjustments of feed-in under Section 13a, contractually agreed curtailable and switchable loads, and expressly the management of bottlenecks. It also counts as a danger if short-term grid bottlenecks are to be feared.

If active power has to be adjusted for current or voltage reasons and several market-related measures or reserves come into question, grid operators must choose those expected to cost the least overall. Renewable energy installations enjoy priority in this context. It is implemented through calculated costs: renewables are, as a rule, to be curtailed only if this saves a multiple of non-priority generation. According to the law, this minimum factor lies between five and fifteen; the exact value is set by the Bundesnetzagentur. If the regular measures are not sufficient, Section 13(2) permits emergency measures as a last resort. Generation, transits and withdrawals in the control area can then be adjusted compulsorily. This framework applies in this form only to Germany. Other countries and the EU level have their own rules.

Distinction from grid expansion, the electricity market and balancing energy

Congestion management is not grid expansion. Grid expansion creates additional capacity permanently, for example through new lines, more powerful transformers or additional switchgear. Congestion management uses the existing grid under the respective conditions. It can buy time, reduce costs and ensure safe operation. However, it does not replace expansion when bottlenecks occur repeatedly because the structure of generation and consumption has changed permanently.

Congestion management must also be distinguished from the electricity market. Germany forms a single bidding zone together with Luxembourg. The wholesale price therefore does not directly reflect bottlenecks within Germany. Power plants, storage facilities and consumers schedule their operation according to market prices, their responsibility for the balancing group and their contracts. Only afterwards do grid operators check whether the notified schedules are permissible in terms of grid engineering. If impermissible power flows result, congestion management intervenes.

Balancing energy solves a different problem: it compensates short-term deviations between generation and consumption and thus keeps the grid frequency stable. Congestion management ensures that the limit values of individual pieces of equipment are observed. Legally, both instruments stand side by side in Section 13 EnWG as part of system responsibility. However, each follows its own rules for procurement, remuneration and deployment.

Instruments: switching, redispatch, countertrading and reserve

Least visible but fundamental are grid switching measures. Grid operators can connect lines differently, change transformer tap positions or deploy equipment so that power flows are distributed more favourably. For this they need precise grid models, up-to-date measurements, forecasts of feed-in and consumption, and control technology with which interventions can be implemented in time and in a coordinated manner.

The most important market-related instrument is redispatch. Grid operators have installations upstream of the bottleneck reduce their output and installations downstream of the bottleneck increase theirs. The electricity balance remains even, but the physical power flow shifts. Under Section 13a EnWG, operators of installations for generating or storing electricity with a rated capacity of 100 kilowatts or more must carry out or tolerate such adjustments on request. The same applies to smaller installations that a grid operator can remotely control at any time. Since Redispatch 2.0, renewable energy installations and combined heat and power (CHP) installations also fall under this uniform framework. The former feed-in management under the Renewable Energy Sources Act (EEG) has been absorbed into it. Pure consumers are not covered across the board by Section 13a. Loads are integrated mainly through contractually agreed curtailable and switchable loads, which are procured in a transparent tendering procedure.

In countertrading, the transmission system operators deliberately trade electricity, often across borders, in order to generate a power flow that counteracts the bottleneck. If the power plants in the market are not sufficient to increase output, grid operators deploy power plants from the grid reserve. These are no longer available on the market and are held available only for system security.

Curtailment means that the feed-in of an installation is reduced. In practice, this frequently affects wind and solar installations in regions from which the electricity cannot currently be fully transported away. Whether curtailment could have been avoided from an economic perspective depends on many factors: grid expansion, grid operation, storage, flexible consumers, market rules and permitting times.

Why bottlenecks can increase

Bottlenecks arise from the interplay of grid structure, generation locations, consumption centres and time profiles. In Germany, a great deal of wind capacity is located in the north and east, while large industrial consumption centres are also in the west and south. When a lot of wind blows in the north and demand there is low, the transmission lines to the south and west are heavily loaded. At the same time, photovoltaics, heat pumps, electromobility, data centres and electrolysers are changing the distribution grids. If many solar installations in rural grids feed in simultaneously, electricity can flow back into higher grid levels and cause bottlenecks there. The bottleneck then arises not from the annual electricity volume, but because feed-in, demand and grid capacity do not match in the same hour.

Not every intervention proves faulty planning. Electricity grids are not dimensioned without limit for every conceivable extreme situation, but according to safety criteria, cost-effectiveness, permitting feasibility and expected use. Occasional interventions in operation can be cheaper than a line that would be fully needed only a few hours per year.

Costs, compensation and responsibilities

Those affected by a redispatch measure are compensated in two ways. The balance responsible party receives balancing compensation: the missing or additional amount of energy is settled in its balancing group. The installation operator receives financial compensation. This is appropriate if the operator is economically neither better nor worse off than without the measure. For curtailed renewables, for example, lost revenues are compensated in this way. This is a statutory compensation claim and not an ordinary remuneration for generated electricity. The costs flow into the grid charges via regulated mechanisms. They therefore appear as part of grid costs and not in the exchange price.

According to the Federal Government, grid congestion management cost around 2.95 billion euros in 2024 and around 3.08 billion euros in 2025. SMARD, the data platform of the Bundesnetzagentur, gives a provisional figure of around 3.07 billion euros for 2025. The largest items in 2025 were:

  • Redispatch with conventional market power plants: around 1.18 billion euros (2024: 1.23 billion euros)

  • Standby provision of reserve power plants: around 955 million euros (2024: 696 million euros), plus call-off costs of the reserve of around 412 million euros

  • Financial compensation to operators of renewable energy installations: around 435 million euros (2024: 554 million euros)

  • Countertrading: net around 96 million euros

The volume of all measures in 2025, at just over 30,300 gigawatt hours, remained practically at the previous year's level. According to SMARD, around 3.5 percent of renewable electricity generation was curtailed in 2025. In the second quarter of 2026, the volume of measures fell compared with the same quarter of the previous year, while provisional costs rose slightly to around 673 million euros. Costs alone do not show which measure would have been the right one. High redispatch costs can indicate a lack of grid capacity, a lack of locational signals, delayed expansion or a lack of flexibility.

Responsibilities are distributed. The transmission system operators bear system responsibility for the extra-high-voltage grid and coordinate large-scale measures. Distribution system operators remedy bottlenecks in their own grids, to which more and more generators, storage facilities and controllable consumers are connected. If the cause of a bottleneck lies in the transmission grid but the measure is carried out in the distribution grid, there are rules on cost reimbursement between the grid operators. The Bundesnetzagentur determines details, for example on compensation and on the calculated prices. It also regulates the grid charges.

Common misunderstandings

A grid bottleneck is not an electricity shortage. Often there is even more power than necessary; it simply cannot be transported to the desired location or along the desired route. Security of supply therefore depends not only on installed capacity, but also on grid capacity, controllable installations, reserves and the options for intervention in operation.

Curtailment is a genuine loss of usable energy, but not automatically proof of inefficiency. Individual hours of curtailment can be the price of a cheaper grid overall. Persistently high curtailment volumes in certain regions, by contrast, point to structural bottlenecks, a lack of flexibility or insufficient coordination between grid connection, expansion and operation.

Storage does not automatically solve bottlenecks either. A storage facility in a region with an electricity surplus relieves the line if it charges during the bottleneck. If it discharges at the same time, it aggravates the bottleneck. In a region with electricity demand, the reverse applies: there, discharging helps, while charging puts additional load on the line. Whether a storage facility relieves the grid therefore depends on location, connection, mode of operation and market incentives.

Congestion management thus describes how grid operators manage the spatial limits of the grid in operation. The term stands neither for electricity shortage nor for a substitute for grid expansion nor for blanket market failure. For assessment, what matters above all are the frequency, location and costs of the interventions and the question of which alternatives would have been available under the same safety requirements.

Sources

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Edited by eCMS on 11.11.2026 19:47

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