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Glossary · Energy industry & energy transition

Countertrading

Countertrading electricity market congestion management redispatch transmission grid grid operation

Countertrading (in German roughly "Gegenhandel") is an instrument used in grid operation. Grid operators use it to relieve an impending or existing congestion in the transmission grid. EU law describes countertrading as a cross-zonal exchange between two bidding zones, initiated by the system operators in order to reduce physical congestion. It is therefore not about arbitrary "grid areas" but about a transaction across the border between two price zones. The intervention takes place after the market outcome: electricity has been traded and schedules have been notified. However, the resulting load flows would place excessive strain on lines, transformers or interconnectors. By means of a targeted transaction in the opposite direction, the grid operator changes the flow of electricity so that the grid can be operated safely.

How countertrading works

A simplified example: in zone A, many wind farms feed in, while in zone B demand is high. After trading, 2,000 megawatts would flow from A to B. However, the interconnection can only handle 1,700 megawatts in this hour. The responsible grid operator therefore buys an additional 300 megawatts in zone B and sells the same quantity in zone A. This creates a schedule from B to A that runs counter to the market flow. In B, more is generated or less is consumed; in A, less is generated or more is consumed. As a result, the net flow across the congestion falls to a permissible level.

What is traded is a quantity of energy for a specific delivery period, usually in megawatt hours. For grid security, however, what counts is the instantaneous power in megawatts, because equipment must never be used beyond its load limit at any point in time. If, in the example, 300 megawatts are counter-traded over four hours, this amounts to 1,200 megawatt hours. Countertrading thus links two levels that are often conflated: the trading of electricity volumes and the physical transport of power through a meshed grid. For the grid operator, such a transaction involves costs (purchase) and revenues (sale). What matters economically is the balance: in the third quarter of 2025, costs of around EUR 37 million in Germany were set against revenues of around EUR 20 million. The net amount was around EUR 17 million.

Distinction from redispatch, congestion management and normal trading

Countertrading is similar to redispatch but is not the same thing. Under EU law, redispatch is a measure by transmission or distribution system operators that alters the generation or load pattern in order to change load flows. Curtailment expressly falls under it. Typically, this involves access to specific installations at a particular grid location. Countertrading, by contrast, works through a trading transaction between two bidding zones. Which installations ultimately adjust their operation results from market activity in the zones involved. Countertrading therefore only helps with congestion that can be influenced by a shift between zones. In the case of a purely local congestion within a zone, it is generally less targeted than redispatch.

Congestion management is the umbrella term for all measures against grid overloads. In addition to redispatch and countertrading, this includes the use of the grid reserve, grid switching measures and the upstream capacity calculation at zonal borders. The feed-in management for renewable installations, which was previously regulated separately, has been absorbed into redispatch in Germany since October 2021 and is no longer a standalone instrument. Countertrading differs from ordinary electricity trading in its purpose: it does not arise from procurement or sales interests but because a grid problem has to be corrected.

Why trade flows and grid flows diverge

Electricity does not follow the contractually agreed trading path. In the meshed alternating-current grid, it distributes itself according to the electrical properties of the lines and according to generation and consumption at many grid nodes. A transaction between two countries can therefore also load lines in a third country. Such loop flows or unscheduled flows are not an exception in the European interconnected grid but follow from physics.

Wholesale trading, by contrast, works with bidding zones. EU law describes a bidding zone as the largest geographical area within which market participants can exchange energy without capacity allocation. Within a zone, a uniform price therefore applies, even though the grid is not equally robust everywhere. Between zones, transmission capacity is calculated and made available to the market. If the actual grid situation after trading is tighter than expected, for example because of forecast errors, outages or unscheduled flows, the grid operators have to readjust. This reveals a limit of the zonal electricity market: it reflects scarcity between zones, but not every local grid constraint.

Legal framework in the EU and in Germany

The key instrument in the EU is the Internal Electricity Market Regulation (EU) 2019/943, which applies directly in all Member States. It defines countertrading in Article 2, point 27. It obliges the transmission system operators to use countertrading and redispatch, including across borders, in order to maximise the available cross-zonal capacities and to reach the prescribed minimum capacity for trade. They may curtail transactions that have already been allocated only in an emergency, when rapid action is needed and redispatch or countertrading is not possible. How costs are shared between grid operators is governed by supplementary methodologies under the Guideline on Capacity Allocation and Congestion Management (Regulation (EU) 2015/1222).

In Germany, the transmission system operators act on the basis of Section 13(1) of the Energy Industry Act (Energiewirtschaftsgesetz). If system security in their control area is endangered or disrupted, they are entitled and obliged to take grid-related or market-related measures. The Act does not expressly mention countertrading. However, the transmission system operators classify it, like redispatch, as a market-related measure. If these measures are not sufficient, emergency measures under Section 13(2) follow, in which feed-in, transits and withdrawals are adjusted directly.

Volumes and costs in Germany

The Federal Network Agency (Bundesnetzagentur) reports countertrading separately in its quarterly evaluations of grid congestion management. In the second quarter of 2026, the volume was around 595 gigawatt hours, 36 percent less than in the same quarter of the previous year (937 GWh). The authority cites less wind, changed grid flows due to high photovoltaic feed-in and the ongoing grid expansion as reasons. The net costs fell to around EUR 10 million (same quarter of the previous year: EUR 19 million). For comparison: total grid congestion management cost a provisional EUR 673 million in the same quarter. The largest share of this went to redispatch and the grid reserve. In Germany, countertrading is thus a building block that is relevant in terms of volume but comparatively small in terms of cost.

Typical misunderstandings

  • "Just additional trading": Countertrading remedies a physical problem that the preceding trading did not sufficiently take into account. It serves operational security and is not a second market for reasons of convenience.

  • "Proof of a broken market design": Market and grid have different tasks. Conflicts arise where price zones are spatially coarser than the technical congestions. If corrections are frequent, this can point to missing lines, unfavourably drawn zones, problems with capacity calculation or a lack of local flexibility.

  • "Equivalent to curtailment of wind and solar installations": Countertrading works through trading transactions. Conventional power plants, storage facilities, flexible consumers or renewable installations can respond to the counter-trade, depending on market conditions and liquidity in the zones involved.

  • "High costs mean bad decisions": High costs can also show that suitable installations at the right location are scarce or that lasting structural congestion is being balanced out in the short term. In that case, the issue is more about grid planning, zone configuration and cost allocation than about the individual measure.

Assessment: operational security and incentives

Countertrading does not create additional firm capacity and does not help ensure that sufficient power plants, storage facilities or flexible consumers are available in the long term. It ensures that existing generation, demand and trade flows become compatible with the grid in a specific hour. It thus belongs to operational system security. As a rule, the costs are not borne by the actors whose schedules trigger the congestion. In Germany, they ultimately flow into the network charges as part of the costs of congestion management. The place where costs arise is therefore not necessarily the place where the triggering incentives are set.

With more weather-dependent generation and new loads such as heat pumps, electric vehicles and electrified industry, spatial flow patterns are changing. Whether this makes more or less countertrading necessary depends not only on the expansion of renewables. Grid expansion, siting decisions, storage operation, forecast quality and the rules for capacity allocation are also important. The most recent German data show that congestion situations can shift quickly: high photovoltaic feed-in and new lines have recently reduced the need.

Sources

Related glossary entries

Edited by eCMS on 11.11.2026 18:10

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