Electricity trading brings supply and demand together on the European internal market. Electricity is transported through the power grid from electricity generating plants to consumers. To avoid damage, each individual power line has a certain maximum transportation capacity that cannot be exceeded.

Various parameters must be observed so that capacity can be transmitted safely throughout the power grid. Current and voltage are two such parameters whose limit levels must be complied with. Current carrying capacity (also referred to as ampacity) is the maximum current where there is no warming beyond allowed operating temperatures. Exceeding the ampacity of grid operating resources such as cables is also referred to as electricity-related network congestion.

Another important parameter for safe network operation is voltage. Voltage must be maintained within a certain range or voltage band, depending on the network level. Network voltage that is too high can damage grid operating resources. Network voltage that is too low also has a negative impact on network operation such as negatively affecting the available transmission capacity. Because energy can no longer be transmitted when the voltage band is too high or too low, the result is voltage-related network congestion.

To prevent grid and system security hazards, the Energy Industry Act requires Transmission system operators (TSOs) and distribution system operators (DSOs) to intervene whenever necessary and avert potential network congestion. The TSOs and DSOs must plan and implement adjustments to current and voltage throughout the grid by choosing the overall most cost effective solution.

The TSOs and DSOs are able to conduct flow calculations using trading data, reported electricity demand and plant dispatch planning. They use the flow calculations to forecast where network congestion may occur so that whenever congestion is imminent in the transmission network or the distribution network, they can instruct individual generating facilities to adjust their generation. Simply put, plants on one side of network congestion have to curtail their generation while plants on the other side of network congestion have to increase their generation. Thus there is no change to the volume of generation, but rather to the distribution of the energy. This dispatch intervention measure is called "redispatching". An essential part of this measure is the targeted curtailing and firing up of individual power stations. These adjustments avert the congestion and the grid can continue to be operated securely. Furthermore, there is also something called the grid reserve, which has power stations on standby that can be used at short notice to feed in additional electricity.

Reactive power is another option for avoiding voltage-related network congestion. Its sole purpose is to help create and dissipate electric and magnetic fields in an alternating current system. Reactive power is used by network operators, for example, for voltage-related redispatching.

Because electricity from renewables has a statutory priority dispatch, the Bundesnetzagentur has specified a "minimum criteria" for its curtailment. If the curtailment of conventional generation is suitable and available for resolving network congestion, network operators may only resort to curtailment of renewable energy if doing so is more effective by a factor of 10. For the curtailment of CHP electricity generation from "highly efficient" CHP installations (CHP electricity) the factor is five. For practical implementation, the minimum factors are translated into "imputed" curtailment prices that the network operators must apply when choosing the overall most cost effective solution.

If a facility is used for redispatching, the effects are balanced physically, economically and financially. Financially the plant operators are positioned as if the network operators never intervened. Physically balancing electricity volumes at the same time avoids imbalances in the system and in the balancing groups affected. Thus the redispatching intervention by network operators is essentially market-neutral. Electricity trading can proceed uninterrupted in spite of occasional congestion.

In addition to traditional redispatching measures, the TSOs also implement countertrading. Here network operators buy or sell electricity on the intraday market at short notice and thus prevent congestion.

The costs for countertrading and other measures to increase network security can be found on SMARD. The data is delivered before the last working day of the following month.
Further information on the costs of maintaining system security is also available in the monitoring report, which is jointly published each year by the Bundesnetzagentur and the Bundeskartellamt. The Bundesnetzagentur also regularly publishes reports on congestion management.

Expansion of the electricity grid is necessary to avoid network congestion in the long term, which is one reason why the TSOs regularly identify the need for grid expansion. The scenario framework is drafted and submitted to the Bundesnetzagentur for this purpose. It describes likely developments in the German energy landscape over the coming years and serves as a basis for the network development plan. Further information about grid expansion is provided here.