Improving Congestion Management - How to Facilitate the Integration of Renewable Generation in Germany

Abstract

In this paper we analyze the German congestion management regime and assess future congestion management costs given a higher share of intermittent renewable generation. In this context, cost-based re-dispatching of power plants and technical flexibility through topology optimization are considered as market-based and technical congestion management methods. To replicate the current market regime in Germany a two-step procedure is chosen consisting of a transactional spot market model and a congestion management model. The results show that currently congestion can mainly be managed by optimizing the network topology. However, congestion management costs tend to increase significantly in future years even if proposed network extensions are taken into account due to higher wind generation and proposed power plant investments, both located mainly in northern Germany. The phase-out of German nuclear power plants additionally impacts congestion management costs. We conclude that there is a need for improving the current congestion management regime.

Keywords: electricity, congestion management, network modeling, Germany

JEL Classification: L94, L51, D61