In Europe, there is a heated debate about how to manage grid congestions in the electricity network.

The regulated approach currently ruled by the German regulator BNetzA and applied by German TSOs has been questioned by different stakeholders for quite some time, as the general European attitude is “pro market” and European electricity legislation generally supports market-based solutions.

While the key arguments against market-based redispatch focus on the potential for inefficient outcomes of such market designs, it is worthwhile to reflect on the traditional understanding of the energy sector and the management of energy production and electricity demand.

This will also add the relevant context for understanding the long and complicated process of developing demand side flexibility as a resource and paving the way for such flexibility in e.g. balancing and congestion management at both transmission and distribution level.

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