FAQ

What is the aim of the instrument?

If the grid capacity is not sufficient to transport the renewable electricity generation, the grid operators must curtail RE plants ("classic" redispatch measure). The "use instead of curtail" instrument creates incentives to activate additional electricity consumption in regions with a surplus of renewable energy (relief regions) in order to counteract emerging grid bottlenecks. The aim of "use instead of curtail" is to curtail less electricity from renewable energies due to grid bottlenecks:

How is this aim to be achieved?

The transmission system operators carry out a forecast of the hourly curtailment electricity volumes for relief regions on the morning of the previous day. Partial quantities of this forecast are allocated to additional connectible consumers or electricity storage facilities, whose load increase contributes to reducing the forecast grid congestion. Participants benefit from lower electricity costs for the allocated curtailment electricity volumes (see category "Benefits of participation" below).

When does the instrument start? What does the "trial phase" consist of?

The instrument will start on October 1^st, 2024 with a two-year trial phase. During this phase, the forecast curtailment electricity volumes will be allocated using a simplified flat-rate procedure. The TSO implementation concept of 01/04/2024 and the contract documents of 01/08/2024 describe the modalities of this trial phase.

From October 2026, the flat-rate allocation procedure will be replaced by a competitive tendering process. The TSO implementation concept and the contract documents will be adapted accordingly in advance.

What are "relief regions" and what do they look like?

The relief regions are geographical areas in which additional connectible loads can effectively reduce the RES curtailment caused by congestion. The TSOs have designated eight relief regions for the trial phase:

The exact definition (list of districts) of the relief regions can be found in the TSO implementation concept.

Curtailment electricity volumes are forecast in each region and allocated to the participating connectible loads in the same region.

The relief regions will be adjusted by the TSOs after the trial phase at the earliest in order to reflect the grid and RE expansion. The TSOs published a non-binding outlook on the development of the relief regions after 2026 in August 2024.

How often are allocations of curtailment electricity volumes to be expected?

This varies greatly in the respective relief regions: We expect between 700 and 2,100 activation hours per year, depending on the region. Under the TSO parameters, we publish the expected activation hours for each region for the coming period.

The activation hours show a strong seasonality: we expect about 80% of the activations to take place in the period between October and March.

The activations tend to be "long": around half of the "use instead of curtail" allocation windows last 4 hours or longer.

How does the instrument differ from redispatch?

Redispatch involves the grid operators requesting an adjustment to the feed-in from generation plants and storage facilities on the evening before and during the intraday period in order to eliminate grid bottlenecks. "Use instead of curtail" measures differ in the following aspects, among others:

• in advance: additional consumption is instructed in the morning of the previous day in order to reduce emerging bottlenecks. This reduces the need for redispatch measures later on.
• load-based: "Use instead of curtail" enables consumers to participate in the reduction of RES curtailment. These are excluded from the current redispatch process.
• not mandatory and not cost-based: in contrast to redispatch, participation in the "use instead of curtail" instrument is voluntary. The allocation of curtailment electricity volumes is not financially neutral and can lead to profits for the participant.

What is "additional electricity consumption"? Which technologies can participate?

The Federal Network Agency defined the additionality criteria in a determination on 28/06/2024 and differentiates between the possible technologies that can participate on the basis of three segments:

• Segment 1: "Substitution of fossil heat generation"
• Segment 2: "Grid-connected electricity storage"
• Segment 3: "Electrolysers and large heat pumps"

Each segment is subject to its own criteria, which the system operator must fulfill. The exact criteria can be found in the BNetzA definition of additionality criteria. These criteria are checked by the TSOs as part of a prequalification process.

Can existing systems participate or does the system have to be built from scratch?

Installations from segment 3 "Electrolysers and large heat pumps" must have been installed after 29/12/2023.

This restriction does not apply to segments 1 "Substitution of fossil heat generation" and 2 "Grid-connected electricity storage". Existing installations may also participate in these segments.

Do geographical criteria apply?

Yes, participation is linked to the geographical location of the system. The facility must be located within a congestion relief region defined by the TSO (postal address of the market location within the congestion relief region). The exact relief regions can be found in the question "What are relief regions and what do they look like?" above.

Are small facilities also allowed to participate?

Yes, small facilities in the distribution grid may participate, without restriction to the voltage level or the size of the individual facilities. However, small systems (< 100 kW) must be aggregated in a pool. The net nominal capacity of a pool must be at least 100 kW.

Is a separate meter necessary?

The consumption of curtailment electricity volumes must take place at each relief facility via a separate market location, which is used exclusively to balance the "use instead of curtail" facilities. The participant confirms this as part of the prequalification process by providing a corresponding metering concept.

My facility is only available seasonally. Can I still take part?

Yes, you report the seasonal availability to your connecting TSO during prequalification and report a "use instead of curtail" potential of 0 MW throughout the period of unavailability (see question "What are the key process steps?" below).

What special criteria apply to installations in segment 1 "Substitution of fossil heat generation"?

For each facility in segment 1 "Substitution of fossil heat generation", consumption of electricity volumes outside the allocation of curtailment electricity volumes is generally not permitted. However, there are exceptions to this:

• monthly consumption of up to 2% of full capacity operation
• consumption in on- and off-ramps (these must be reported in the prequalification)
• provision of control energy

In addition, all power-to-heat systems that feed into the same heating grid and meet the additionality criteria must participate in the "use instead of curtailment" instrument.

What special criteria apply to systems in segment 2 "grid-connected electricity storage"?

"Grid-connected electricity storage systems" must be metered and balanced separately from other consumption/generation (separate market location).

For these systems, consumption of electricity volumes outside the allocation of curtailment electricity volumes is generally not permitted. However, there are exceptions to this:

• monthly consumption of up to 2% of full capacity operation
• provision of control energy
• consumption required for the provision of balancing capacity (e.g. reaching the necessary state of charge)

In addition, electricity storage systems are prohibited from generating electricity in forecast congestion time windows. These time windows are published on Netztransparenz.de at 10 a.m. the day before. However, an exception is made for the provision of primary control energy (FCR).

In summary, the following restrictions apply to participating electricity storage systems:

What special criteria apply to systems from segment 3 "Electrolysers and large heat pumps"?

Systems from segment 3 "Electrolysers and large heat pumps" must have been installed after 29/12/2023.

The operation of these systems is not restricted.

Is it possible to provide balancing capacity using "use instead of curtail" facilities?

In principle, yes, but not at the same time: the provision of balancing capacity is only possible in the time windows in which no curtailment electricity volume is allocated to the system. Further requirements apply to electricity storage systems (see above question "What special criteria apply to systems from segment 2 "grid-connected electricity storage systems"?).

This means that, in conjunction with the notification of the "use instead of curtail" potential at 7 a.m. on the previous day (see question "What are the key steps and what does the data exchange look like?" below), the participant must independently assess on the previous day whether it will market its capacity on the balancing market or offer it as part of "use instead of curtail".

What are the key process steps?

Which data formats and channels are used?

The ERRP data exchange processes of the SO-GL are used. These are typically used today for data exchange (master data, planning data and non-usability messages) between generation plants and TSOs.

The corresponding implementation instructions are published on netztranspranz.de.

Implementation rules

This is a

• cyclical data exchange process that mainly takes place from 2 days before the fulfillment date until the fulfillment date,
• an xml data format (e.g. for time series) is used,
• which are exchanged between the system operator (EIV) and the TSO via SFTP.
  
  

Where is data on the curtailment electricity volumes & generation prohibition windows published?

The reported curtailment electricity volumes, the sum of the allocated curtailment electricity volumes and the periods for a generation prohibition for segment 2 relief facilities are published on netztransparenz.de

Use instead of curtail

The data will also be made available via an API interface.

Does the TSO supply the volumes or do I have to do it myself?

There is no balance sheet compensation for the curtailment electricity volumes by the TSOs. Each participant procures the allocated curtailment electricity volumes independently. The participant is free to decide how to do this, e.g. through the exchange, OTC or PPA.

How does billing work in practice and what data is required?

The individual contracts are billed in accordance with the framework agreement on the basis of, for example, the confirmed curtailment electricity volumes or metering values.

What happens if the allocated quantity is not procured / consumed?

In the event that the participant does not consume the allocated and confirmed curtailment electricity volume by the fulfilment time, a penalty will be imposed in accordance with the framework agreement.

I operate an electricity storage system and cannot store the allocated quantities in full due to limited capacities. What happens in this case?

After allocation of the curtailment quantities, the participant confirms its actual realizable consumption by updating the ERRP data at 12 noon on the previous day. This forms the basis for the following process steps.

How is "use instead of curtail" activation remunerated?

In the case of an allocation of curtailment electricity volumes, the electricity costs are reduced. This is done by financially reimbursing the difference between the day-ahead market price and a fixed "13k price" as well as (possibly limited) compensation for ancillary electricity costs. The reference for the remuneration is the allocated and metered consumption volume.

Details on remuneration can be found in the remuneration framework as part of the Contract documentation.

What is the "13k price"?

The "13k price" is the price to be paid by the participants for the consumption of curtailment electricity volumes and reflects the financial deductible of the loads per MWh. The 13k price is set by the TSOs in the trial phase two months before the start of the respective period and published as part of the TSO parameters. For the start of the instrument (Q4 2024), this price is 40.35 €/MWh.

The methodology for determining the 13k price can be found in the TSO implementation concept.

What happens if the day-ahead price is lower than the 13k price?

In this case, no financial reimbursement is paid to the participant. The participant also does not have to pay anything back.

Are ancillary electricity costs such as grid charges compensated?

Yes, this includes grid fees, levies and electricity tax. Both variable and fixed costs are compensated. However, this compensation is limited in order to ensure that "use instead of curtail" reduces the TSOs' congestion management costs.

The exact modalities of the compensation of ancillary electricity costs are described in the remuneration framework as part of the contract documents.

The TSOs have published a template for calculating ancillary electricity cost compensation to provide assistance.

Is it possible to offset the fixed ancillary electricity costs for seasonally available facilities?

In principle, yes. If there are enough "use instead of curtail" activation hours over the period despite the seasonal availability, (possibly partial) compensation of the power component of the grid usage fees is possible. Please use our calculation template to estimate the possible compensation.

Is the allocated curtailment electricity considered green?

When curtailment electricity volumes are allocated, the participant is not sent any guarantees of origin for electricity from renewable energies in accordance with Section 42 EnWG. In certain cases, however, the products produced with the allocated curtailed quantities can be labeled as green:

• Hydrogen produced using "use instead of curtail" electricity is considered green in accordance with § 9 of the Ordinance on the crediting of electricity-based fuels.
• In future, certificates of origin for heat will be issued for heat produced from "use instead of curtail" electricity ( § 16 of the Gas-Heating-Cooling Certificates of Origin Register Ordinance).

What data is required for billing?

The following data is used for billing:

• The individual ancillary electricity costs: These are recorded in advance as part of the coordination of ancillary electricity cost compensation.
• The data from the operational process (in particular the allocated and confirmed curtailment electricity volumes).
• The metered values: By signing the framework agreement, the participant grants the TSO consent to use the metered values transmitted to it in accordance with the Metering Point Operation Act for billing and control purposes.

How do I include an facility in the "Use instead of curtail" instrument?

The system must first be prequalified. To do this, submit a prequalification application to the connecting TSO:

• 50Hertz: 13k@50hertz.com
• Tennet: 13k@tennet.eu

While the application is being reviewed by the TSO, the necessary interfaces for operational data exchange are created and tested.

After successful prequalification, a framework agreement is concluded between the participant and the TSO and the system can participate in the allocation procedure for curtailment electricity volumes on the first day of the following month.

What must the prequalification application contain?

The PQ application must contain the following elements:

• Attachment 1: Participant data sheet
• Attachment 2: Data sheet relief facility
• Attachment 3: ANB certificate (for systems in the distribution grid)
• Attachment 4: Application form

The necessary contents are described in detail in the prequalification conditions (PQ conditions).

Which consumption ban applies to existing systems and new systems that substitute fossil heat generation, as well as grid-connected storage systems?

The implementation of the legal requirements and the specifications of the Federal Network Agency (BNetzA) on the consumption ban is an essential part of the prequalification for existing systems and new systems that substitute fossil heat generation, as well as grid-connected storage systems.

An example is as follows:

* Exceptions to the consumption ban:

• Monthly consumption up to 2% of full load operation
• For existing systems and new systems that substitute fossil heat generation: Consumption in start-up and shut-down ramps (these must be reported in the prequalification)
• Provision of balancing energy
• For grid-connected storage systems: consumption required to provide balancing power (e.g. reaching the necessary state of charge)