Market-based redispatch

Commissioned by BMWi

Lion Hirth, Ingmar Schlecht

With Consentec, Connect, Ecofys, Fh ISI and SUER

2018

Triggered by the EU Commission’s proposal to make market-based redispatch obligatory, we assessed the competitive procurement of redispatch and local flexibility markets in a large study for the economics ministry, leading a consortium with Consentec, Connect, Ecofys, Fraunhofer ISI, and SUER. While voluntary participation would integrate loads that cost-based redispatch cannot reach, we identified two fundamental problems: strategic inc-dec bidding and locational market power. In grid simulations for 2030, strategic bidding inflates redispatch volumes to 300–700% of the cost-based level – so we recommended keeping cost-based redispatch. This report was originally published in German.