Congestion · Glossary

Congestion in the power system occurs when a grid section, an item of equipment or a trading link does not have enough permissible capacity to safely carry the planned or actually occurring power flows. Lines, transformers, switchgear, grid connections, interconnectors between market areas or individual levels of the distribution grid may be affected. Congestion therefore does not describe a general scarcity of electricity. It describes a limited transport or connection capability at a specific location and at a specific time. It is less like an empty tank than like a clogged section of motorway: electricity is not lacking, passage is.

Technically, it is usually a matter of power rather than energy. The load capacity of an item of equipment is stated in megawatts or, closer to the component, in terms of current, voltage and thermal limits. A line cannot be loaded arbitrarily high. It heats up, its conductors sag more, protection limits are reached or requirements for stability and voltage would be violated. In the transmission grid, additional safety rules apply, above all the n-1 criterion: the grid must remain secure even if an important item of equipment fails unexpectedly. A line can therefore already be considered relevant to congestion even though it is not yet operating at its physical maximum. The reserve for the failure of another item of equipment must remain free.

Congestion is not a power shortage. A power shortage means that generation, storage discharge, imports and demand reduction together are not sufficient to meet demand. A grid congestion, by contrast, can occur even when enough electricity is available in the whole market area. Generation is then simply in the wrong place or, because of the limited grid capacity, cannot be brought to consumers in sufficient quantity. Nor is congestion the same as a high electricity price. High prices can indicate scarcity, but can also reflect fuel costs, CO₂ prices, demand or market expectations.

Technical limit and market rule

In an alternating-current grid, power flows do not follow contractually agreed delivery paths. They are distributed according to the electrical properties of the grid. Anyone who sells electricity in northern Germany and buys it in southern Germany does not thereby reserve a single line like a lane. The feed-in changes the flows throughout the meshed grid. In doing so, equipment that does not appear in the trade at all can also be loaded, including lines in neighbouring countries (so-called loop flows or transit flows).

This physical property meets a market design with large bidding zones. Germany forms a common price zone with Luxembourg. Within this zone, electricity is traded as if there were no internal grid congestion, and a uniform wholesale price applies to the whole area. Only afterwards do the grid operators check whether the resulting schedules can be implemented in a physically secure manner. If this is not the case, they intervene in the dispatch of power plants, storage facilities and in some cases loads. This intervention is called redispatch. Congestion management also includes countertrading, a targeted opposing trade across zone borders.

In simplified terms, redispatch works like this: plants upstream of the congestion reduce their feed-in, plants downstream of the congestion increase it. This relieves the critical section without consumers being disconnected from the grid. In Germany, operators of generation and storage plants from 100 kilowatts of rated capacity, as well as plants that can be remotely controlled at any time, are obliged under § 13a EnWG to adjust their active or reactive power on request. Since October 2021, this framework has also applied to renewable energy and CHP plants (Redispatch 2.0). The former feed-in management under the EEG has been absorbed into it. When the curtailment of wind or solar plants is mentioned today, it is generally a matter of redispatch. Curtailment does not prove that there is fundamentally too much wind or solar power. It only shows that the available electricity cannot be fully absorbed or transported onward under the given grid and market conditions.

Congestion in the transmission and distribution grid

Publicly discussed above all is congestion in the extra-high-voltage grid, for example between wind-rich regions in the north and large consumption centres in the south and west. Grid expansion requires long planning and construction times. The spatial differences between generation and consumption can therefore only be balanced out with a delay, and high power flows over long distances arise. These congestions help determine how much grid expansion, redispatch, reserve power plants and cross-border trade are necessary.

However, congestion is increasingly also arising in the distribution grid. Photovoltaic systems, charging points, heat pumps, battery storage and smaller wind farms are connected there. A local network transformer or a medium-voltage cable can reach its limit even if the transmission grid is not threatened with overload. The data of the Bundesnetzagentur (Federal Network Agency) show this shift clearly. In 2025, around 35 percent of the redispatch volumes for renewable energies were attributable to congestion in the distribution grid; in the previous year it was about 26 percent. In the second quarter of 2026, the share was above half for the first time (around 52 percent). The authority cites the strong expansion of photovoltaics as an important reason: in 2025, almost 10 gigawatts were added, and PV redispatch almost doubled.

Congestion is therefore closely linked to power, load profile, simultaneity, grid connection capacity and flexibility. A line is not overloaded by the annual amount of energy, but by power peaks and by the fact that many plants run unfavourably at the same time. A heat pump consumes a certain number of kilowatt hours over the year. For the grid, what also counts is what power it draws in cold hours at the same time as many other plants. A grid with moderate annual consumption can therefore have congestion, while higher consumption with flexible control is often easier to integrate.

Why congestion causes costs

Congestion costs money because the security of the grid has to be established under conditions that the market does not reflect. Redispatch changes the economically planned dispatch of power plants. If a cheap power plant upstream of the congestion is throttled and a more expensive one downstream is ramped up, additional costs arise. Under § 13a EnWG, plant operators are placed financially in such a way that they are economically neither better nor worse off than without the intervention. For curtailed renewable energy and CHP plants, this also includes the lost revenue. The costs of congestion management flow into the network charges and thus end up on electricity bills, although their cause lies neither with sales nor with electricity generation itself.

On the order of magnitude: according to the Bundesnetzagentur on SMARD, congestion management cost a provisional 3.07 billion euros in 2025, just under 4 percent more than in 2024 (around 2.95 billion euros). The volume of measures remained practically the same at around 30.3 terawatt hours. The costs were composed roughly as follows: around 1.18 billion euros for redispatch with conventional power plants, around 1.36 billion euros for reserve power plants, around 433 million euros as financial compensation for curtailed renewable energy plants and around 102 million euros for countertrading. The compensation for curtailed green electricity thus makes up only a smaller part of the total costs. Around 3.5 percent of renewable electricity generation was curtailed. In the second quarter of 2026, the volume fell by around 10 percent compared with the same quarter of the previous year, but the provisional costs rose slightly to about 673 million euros, mainly because of higher standby costs of the reserve power plants. All figures are provisional and may be corrected retrospectively.

Congestion also distorts investment signals. If the market price in a large price zone remains the same everywhere even though the grid situation varies greatly by region, generators and consumers learn hardly anything about where feed-in or consumption would help the grid. An industrial plant, an electrolyser, a battery storage system or a data centre cannot tell from the uniform exchange price whether its location aggravates or relieves congestion. The bidding zone review by the European association of grid operators ENTSO-E suggested splitting the German zone into several areas. In December 2025, the Federal Government nevertheless decided, with the Action Plan Bidding Zone, to retain the uniform German-Luxembourg zone. Smaller price zones, local flexibility markets, adjusted network charges or stricter connection rules thus remain a question of market organisation and policy, not only of technology.

Common misconceptions

Congestion means “too little grid”: This may be true, but is only one possible cause. Congestion also arises from delayed grid expansion, unfavourable locations, lack of flexibility, rigid schedules, too little reactive power, protection concepts or regulatory requirements. An additional line can eliminate a congestion and create new flow patterns elsewhere. Grid planning must therefore always consider the effect on overall operation.
Curtailment proves superfluous generation: The cause is usually limited in space and time. In one region wind turbines are curtailed, while elsewhere fossil power plants have to run because the transport route is limited or because these power plants are needed for voltage control or redispatch. Curtailment then says more about the interplay of location, grid, operational management and market rules than about the value of a technology.
Grid capacity is a fixed number: The usable capacity depends on temperature, wind, load flow, switching state, outages, distribution of feed-in, reactive power and safety requirements. With overhead line monitoring, the loading can be increased when wind and cold cool the conductors. Phase-shifting transformers direct flows more precisely. The location of congestion also shifts: according to the Bundesnetzagentur, high PV feed-in shifts the flows more strongly in an east-west direction, on which the curtailment of offshore wind farms has hardly any influence.
Negative prices are a consequence of congestion: Negative electricity prices arise in the market when a lot of generation meets low demand in a price zone and plants continue to feed in for technical, contractual or subsidy-law reasons. At the same time, a grid congestion may exist and trigger curtailments. Price and physical congestion are, however, different signals.

Significance for security of supply and the energy transition

Congestion is important for security of supply because the power system at every point in time needs not only enough energy and capacity, but must also provide them at the right place. A power plant, a storage facility or a flexible consumer is worth different amounts to grid operation depending on which side of a congestion it is located. The same megawatt hour can relieve the grid, be neutral or burden it. Location and timing thus become central variables.

With more wind energy, photovoltaics, electromobility, heat pumps, electrolysers and battery storage, the demands on the grid rise. This does not mean that every new plant aggravates congestion. Flexible consumers can shift load, storage can smooth local peaks and controllable feed-in plants can reduce congestion if the rules set suitable incentives. Problems arise where technical possibility, market rule and responsibility diverge. A plant could respond in a grid-serving way but receives no clear price signal. A grid operator identifies a local congestion but may procure flexibility only to a limited extent. A market participant follows the exchange price although the local grid situation would suggest a different mode of operation.

The term congestion makes a concrete limit visible: electricity is not only a tradable quantity of energy, it must be transported and distributed in a real grid with safety requirements. Congestion alone does not say whether a power system is expensive, efficient or secure. It does, however, show where spatial distribution, simultaneity, grid technology and market organisation do not fit together. Precisely there it is decided whether additional lines, better operational management, regional price signals, flexible loads, storage or changed connection rules are the appropriate answer.

Sources

Netzengpassmanagement im Q2 2026: Volumen gesunken, Kosten leicht gestiegen — Bundesnetzagentur (SMARD); 2026-10-12. Gesamter Artikel, Abschnitte zu EE-Redispatch, Ursachen im Verteilernetz und Kosten
Netzengpassmanagement im Q4 und Gesamtjahr 2025: Maßnahmenvolumen im Gesamtjahr stabil — Bundesnetzagentur (SMARD); 2026-03-30. Jahresartikel 2025, Abschnitte zum Maßnahmenvolumen, zur EE-Abregelung und zu den Kosten
§ 13a EnWG – Erzeugungsanpassung und ihr bilanzieller und finanzieller Ausgleich — Bundesministerium der Justiz / gesetze-im-internet.de; unbekannt (aktuelle Fassung). § 13a Abs. 1, 1a und 2 EnWG
Stromnetz: Mehr Redispatchkosten trotz stabiler Eingriffe — Energie & Management; unbekannt (2026). Abschnitt „Vier Prozent mehr Kosten 2025“
Aktionsplan Gebotszone: Deutschland will einheitliche Stromgebotszone beibehalten — energiezukunft; 2025-12-18. Einleitung des Artikels

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Edited by eCMS on 11.11.2026 19:47