Renewable curtailment compensation costs in Germany decrease 22% in 2025
Clean Energy Wire / Der Spiegel
Compensation costs for the curtailment of renewable energy fell by around 22 percent to 435 million euros in 2025, compared to the previous year (€554 million in 2024), showed a response from the German economy ministry to a question by Left Party parliamentarian Dietmar Bartsch, seen by CLEW.
A lack of grid capacity means that network operators have to carry out grid stabilisation measures to secure supply. These so-called redispatch measures involve intentionally shutting down electricity production in areas of oversupply, and ramping up supply elsewhere – with compensation payments granted to suppliers who cannot feed their electricity into the grid, and balancing payments given to producers needed to close the supply gap.
Curtailment compensation paid to renewable energy suppliers is thus only a part of the overall grid congestion management costs. These amounted to 2.9 billion euros in 2024, the final year for which data is available. Grid bottlenecks meant that 3.5 percent of Germany's renewable electricity could not reach end consumers in 2024. In the first three quarters of 2025, grid management costs reached almost 2.2 billion euros, according to grid agency BNetzA.
These costs are largely passed on to end consumers in the form of grid fees, paid through electricity bills.
“The government is responsible for the highest electricity prices in Europe – yet at the same time, electricity is being wasted,” Bartsch told newspaper Der Spiegel. “This absurdity, which is being borne by consumers, must come to an end.”
Germany’s economy ministry is working on a law reform to better align renewable power projects with the grid’s capacity to transport the electricity they produce. The draft proposed scaling back grid connection priority for new projects, limiting curtailment compensation payments for new projects in areas experiencing grid bottlenecks, and partially allowing grid operators to charge renewable investors for grid upgrades.
The renewables industry warned that the changes, especially the proposal to forgo compensation payments for curtailments, could impact the financial viability of many projects, making it much more difficult to assess their risk profile – and ultimately risk slowing down the energy transition.
The BNetzA has previously said that building wind turbines relatively far away from energy consumption centres contributed to the high need for re-dispatch measures, as long-distance power transmission lines are among the most overburdened parts of the power grid.