"Utilize Instead of Curtailing" – How Consumers in Northern Germany Can Access Affordable Electricity!

With the new legal regulation "Utilize Instead of Curtailing" (§13k EnWG), the German government aims to address the problem of grid bottlenecks and the associated costly curtailment of renewable energy (RE) plants. In addition to more efficiently integrating RE generation potentials into the overall system, the regulation also offers significant advantages for energy-intensive companies and project developers: certain electricity consumers in northern German states can significantly save on electricity costs under the new regulation—potential savings of an average of 13 cents/kWh are possible, which can amount to savings of over 70% compared to purchasing electricity on the spot market. The new mechanism will begin on October 1.

Do you have a company with high electricity costs or operate multiple energy-intensive plants in the northern German states?

We would be happy to assess whether you can obtain affordable electricity under §13k EnWG, determine which technology and operating concept is suitable, and which economic considerations are relevant for you! Additionally, we can assist with registration, contract completion, and the technical and regulatory implementation.

Congestion Management: 11 TWh of Renewable Generation Curtailed, €3.1 Billion in Costs

Every year, large amounts of renewable generation potential remain unused. In 2023, around 11 TWh of electricity from renewable energy plants (mainly onshore and offshore wind) had to be curtailed, resulting in compensation payments of around €600 million. The total cost for grid congestion management in 2023 amounted to €3.1 billion. The reason: the expansion of the power grids is not progressing quickly enough, leading to more frequent grid overloads as renewable energy capacity increases. In such cases, the transmission system operator (TSO) responsible for the control area must mitigate the risk or disruption through congestion management measures. One such measure is the curtailment or reduction of electricity feed-in from RE plants. This means that electricity that is actually available and urgently needed for decarbonization cannot be used. Moreover, since the operators of curtailed plants are entitled to compensation, this leads to significant economic costs.

13k to Provide Relief, Certain Consumers to Benefit

The new §13k EnWG, starting on October 1, 2024, aims to make normally curtailed electricity available for use. This regulation addresses two issues: reducing costs associated with congestion management measures and providing otherwise unused RE electricity to certain consumers, such as electrolyzers, electricity storage systems, and various Power-to-Heat (PtH) plants, at a low cost. Since products generated with 13k electricity, such as green hydrogen and green heat, can be credited towards specific RE sector targets and thus marketed, the regulation also offers good marketing opportunities for operators of PtH plants and electrolyzers, while fundamentally reducing CO2 emissions.

This regulation is part of a reform of the Energy Industry Act (EnWG) that was passed by the Bundestag on November 10, 2023. The primary goal is to optimally utilize renewable energy generation potential. The TSOs first defined "relief regions" in the spring of this year. These are geographically well-defined areas at the county level where curtailments have occurred frequently in the past. A total of 38 counties within the TenneT and 50Hertz control areas are included, spanning the following states: Schleswig-Holstein, Bremen, Hamburg, Lower Saxony, Mecklenburg-Western Pomerania, Brandenburg, and Saxony-Anhalt.

Übersicht der Landkreise und Städte in den Entlastungsregionen: 

Entlastungsregion	Landkreis / (kreisfreie) Stadt	Bundesland
T1	Emsland (Regelzone TenneT)	Niedersachsen
	Leer	Niedersachsen
T2	Ammerland	Niedersachsen
	Aurich	Niedersachsen
	Cloppenburg	Niedersachsen
	Emden	Niedersachsen
	Friesland	Niedersachsen
	Oldenburg (Stadt)	Niedersachsen
	Wilhelmshaven	Niedersachsen
	Wittmund	Niedersachsen
T3	Bremerhaven	Bremen
	Cuxhaven	Niedersachsen
	Delmenhorst	Niedersachsen
	Oldenburg (Landkreis)	Niedersachsen
	Osterholz	Niedersachsen
	Wesermarsch	Niedersachsen
T4	Rotenburg (Wümme)	Niedersachsen
	Stade	Niedersachsen
T5	Dithmarschen (Regelzone TenneT)	Schleswig-Holstein
	Nordfriesland	Schleswig-Holstein
T6	Neumünster	Schleswig-Holstein
	Rendsburg_Eckernförde	Schleswig-Holstein
	Schleswig-Flensburg	Schleswig-Holstein
	Segeberg	Schleswig-Holstein
H1	Hamburg	Hamburg
H2	Ostprignitz-Ruppin	Brandenburg
	Prignitz	Brandenburg
	Uckermark	Brandenburg
	Ludwigslust-Parchim	Mecklenburg-Vorpommern
	Mecklenburgische Seenplatte	Mecklenburg-Vorpommern
	Nordwestmecklenburg	Mecklenburg-Vorpommern
	Rostock (Stadt)	Mecklenburg-Vorpommern
	Rostock (Landkreis)	Mecklenburg-Vorpommern
	Schwerin	Mecklenburg-Vorpommern
	Vorpommern-Greifswald	Mecklenburg-Vorpommern
	Vorpommern-Rügen	Mecklenburg-Vorpommern
	Altmarkkreis Salzwedel	Sachsen-Anhalt
	Stendal	Sachsen-Anhalt

 

How Does It Work?

§13k EnWG stipulates that the otherwise curtailed electricity within these relief regions will be allocated to certain electricity consumers, known as controllable loads, through a competitive process. The Federal Network Agency (BNetzA) has defined the criteria for which consumers qualify as controllable loads (see the "Who Can Participate?" section). However, the TSOs estimate that initially, there may not be enough eligible electricity consumers in the relief regions. Therefore, a two-year pilot phase will begin on October 1, where curtailed electricity will be allocated based on reported availability. Participants must first procure the allocated electricity themselves and can subsequently have most of the costs reimbursed.

Who Can Participate?

Eligible participants are so-called relief facilities (also known as controllable loads), which are facilities that can contribute to relieving the electricity grid through their consumption behavior and are located within the designated relief regions. The BNetzA has further defined the eligible electricity consumers this summer. Eligible facilities include electricity-based heat generators that can replace fossil fuel heat generators, grid-connected electricity storage systems, heat pumps, and electrolyzers. Specific requirements, such as a minimum number of annual operating hours, also apply to these facility types.

How to Participate?

Operators of relief facilities can apply for prequalification with their respective TSO since early September. During this process, it will be checked whether the facilities meet the participation requirements and whether the operational data exchange between the facility and the TSO works correctly. After successful prequalification, a framework agreement between the operator and the TSO is concluded. The facility can then participate in the allocation process for regulatory energy volumes starting from the first of the following month.

Potential Savings – An Example

The reimbursement and compensation of costs initially borne by participants for procuring electricity consists of two components:

• Financial reimbursement of electricity procurement costs, where the reimbursement amount is based on the spot market prices of the "Day Ahead" market, with participants bearing a small co-payment per MWh (13k price).
• Compensation for variable and fixed electricity ancillary costs up to a specified price cap.

The remuneration framework set by the TSOs must serve the legally defined purpose of reducing the costs of congestion management.

For example, if an operator of a 110 kW heat pump hypothetically made part of its capacity available for 13k curtailed electricity volumes (100 hours) in February, they could have saved an average of 13 cents per kWh compared to regular electricity procurement through Day-Ahead spot market prices. This corresponds to 76% of the electricity price otherwise payable in February. Furthermore, the products generated by facilities eligible to participate in §13k EnWG, such as heat and hydrogen, are recognized as green under the Guarantees of Origin Act and the Delegated Regulation of RED II or the 37th BImSchV, offering good marketing options for facility operators.

 

For example, if an operator of a 110 kW heat pump hypothetically made part of its capacity available for 13k curtailed electricity volumes (100 hours) in February, they could have saved an average of 13 cents per kWh compared to regular electricity procurement through Day-Ahead spot market prices. This corresponds to 76% of the electricity price otherwise payable in February. Furthermore, the products generated by facilities eligible to participate in §13k EnWG, such as heat and hydrogen, are recognized as green under the Guarantees of Origin Act and the Delegated Regulation of RED II or the 37th BImSchV, offering good marketing options for facility operators.

How We Can Assist You

If you are interested in obtaining affordable RE electricity under §13k, we can support you in the following steps:

• Assessment of whether your facility meets the participation requirements
• Development of a technology and operation concept
• Calculation of suitable business cases
• Assistance with registration and contract completion
• Regulatory support for necessary modifications or new constructions
• Technical implementation support

For an initial consultation, our consultants are available to you.

Your Contacts:

Benita Stalmann
Consultant cruh21
stalmann@cruh21.com

Cäcilia Gätsch
Consultant cruh21
gaetsch@cruh21.com

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Sources:

(1) SMARD | Grid Congestion Management in 2023.

(2) SMARD | Grid Congestion Management in 2023.

(3) See the TSO Implementation Concept, online at: TSO Implementation Concept (netztransparenz.de).

(4) See the BNetzA's determination of additionality criteria, online at: Determination of Additionality Criteria 13k_EnWG (bundesnetzagentur.de).