Germany introduces competitive system for balancing fluctuations in the electricity grid

The German Federal Network Agency (BNetzA) has approved a concept by transmission system operators (TSOs) to introduce a new system on the market for control reserve to ensure that fluctuations in supply and demand can be balanced flexibly and cost effectively. Jochen Homann, president of BNetzA, called the new system "a milestone for intensifying competition on the market for control reserve“. This will be done by separating the market for capacity reserve and control energy, thus opening the control reserve market to more energy suppliers. The system's predecessor, the so-called mixed-price system, had been criticised for leading to more extreme grid situations and price speculations. In July, a court annulled it as a result of a lawsuit by virtual power plant Next Kraftwerke and other market players.  

Activating control energy is comparatively expensive and traders on the energy market try to avoid it by forecasting supply and demand as precisely as possible. Under the mixed-price system, however, activating control power at times was found to be less costly than buying or selling power through regular markets.