Grid control cooperation

Federal Network Agency orders grid control cooperation for German grid

Kurth: "Hundreds of millions in cost savings anticipated"

Year of issue 2010
Date of issue 2010.03.16

The Federal Network Agency has today ordered the nationwide introduction of grid control cooperation by 31 May 2010 at the latest. This decision obliges the four transmission system operators to work together more closely in balancing the German grid.

"Due to this decision by the Federal Network Agency, we expect permanent savings worth hundreds of millions related to the annual costs. These savings will not just benefit the grid operators and electricity suppliers. The consumers could also benefit from them in the form of decreasing electricity prices," said Matthias Kurth, President of the Federal Network Agency.

One of the main tasks of the transmission system operators is to balance the permanent imbalance in the capacity generated and consumed. Each TSO handles this task for his own control area autonomously. Until now the separate balancing of the four control areas resulted at times in contradirectional use of balancing power, the inefficient use of reserves energy. While one control area used negative balancing power to balance excess supply, another control area needed positive balancing power at the same time to balance shortfall supply. The use of balancing power is expensive because it requires power plant capacity to be held in reserve for use at any time.

The grid control cooperation now ordered prevents contradirectional nonharmonised use of balancing energy completely. The imbalances of the individual control areas are netted so that only the residual balance has to be evened out by means of balancing energy. Interconnection between grid balancing operators can also reduce the level of balancing power that has to be held in reserve.

"In addition grid control cooperation leads to a consolidation of the currently fragmented sub-markets for balancing power. This promises increased competition between the providers of balancing power and thus further cost savings," Kurth added.

Transportnetz AG and transpower stromübertragungs gmbh have already been practising grid control cooperation for their control areas since last year. The proceedings now concluded served to decide whether interconnection between grid balancing operators should apply to all four control areas across Germany. One alternative was a suggestion by the fourth transmission system operator, Amprion GmbH, to balance the four transmission systems by means of a socalled central regulator as a central authority. It turned out that both concepts are on a par regarding major performance features.

"The determining factor for our decision was that the nationwide introduction of grid control cooperation can be implemented quickly. In light of the enormous amount of savings that can be achieved in the short term, amounting to approximately 16 million Euros per month, any delay in the utilisation of this potential is not justifiable," said Kurth.

However, this does not exclude the possibility of further steps in the future towards an even closer co-operation of the transmission system operators. "The current step can be achieved in the short term, but certainly does not have to be the last one. One day it could prove to be the precursor of a further integration of the networks, for example a central regulator or a homogenous control area. A future, equitable extension of such an interconnection towards neighbouring European states is also conceivable. In this context all integration efforts could be steps towards the creation of homogenous European network structures," Kurth said.

The decision is available on the website of the Federal Network Agency.

Press release - Grid control coopeation for German Grid