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Position Paper | Market-based redispatch: A no-regrets option

Jul 21, 2021

With an increase of variable RES and the further electrification of the energy system, physical congestions caused by grid constraints will be more common. Redispatching is an alleviating action to reduce these constraints that can be performed by changing the dispatching from generators, through curtailment, or otherwise restricting injection or demand. Redispatching can be performed mainly in two ways:

  • Regulated approach (or rule-based approach) in which the System Operator (SO) centrally plans and mandates any redispatching actions.
  • Market-based approach in which the SO asks on a voluntary basis the market to adjust production or demand at either side of the congestion.

While the market-based approach is backed by the Electricity Market Regulation and Directive, concerns of inc-dec gaming and market power by participants has driven some countries, in particular Germany, towards a regulated approach.
The objective of this position paper is to address the concerns and benefits of a market-based approach, how the existing legislation covers the risks, and proposes mitigating measures and tools for National Regulatory Agencies and SO to fully overcome them.

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  • Making better use of the grids thanks to the contribution of existing and future connected flexible consumers is an efficient approach to tackle urgently the congestion challenge. The Flexible Demand Management Industry that smartEn represents can empower grid users, i.e. grid connected buildings, industries and electric vehicles, to play an active role in supporting an efficient and smart operation of grids. However, grids must be incentivised to use the flexibility of connected consumers, as already prescribed by EU laws. To support this effort, this paper: Sets out six strategic recommendations for the smart operation of grids which should guide the efficient delivery of the EU Grids Action Plan. Lays the groundwork for a dedicated EU Strategy on Grid Congestion which the new Commission should develop to deliver the European Green Deal by 2030. Such a strategy should foster harmonised approaches to tackle grid congestion issues across the EU, without waiting for lengthy network reinforcement, by harnessing the potential of connected, flexible consumers.

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