{"id":6448,"date":"2026-07-20T15:08:50","date_gmt":"2026-07-20T14:08:50","guid":{"rendered":"https:\/\/neon.energy\/?page_id=6448"},"modified":"2026-07-20T15:29:01","modified_gmt":"2026-07-20T14:29:01","slug":"congestion-management","status":"publish","type":"page","link":"https:\/\/neon.energy\/en\/congestion-management\/","title":{"rendered":"Congestion Management & System Operation"},"content":{"rendered":"

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Congestion Management & System Operation<\/h2>\n

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Redispatch costs running into the billions, growing congestion, and the debate over nodal pricing, bidding zones, and market-based redispatch shape congestion management today. At the same time, system operation is becoming ever more challenging amid increasingly complex congestion, while grid expansion fails to keep pace with renewables.<\/p>\n

We advise transmission system operators, ministries, and ENTSO-E on congestion management, grid planning, and system operation \u2014 combining quantitative models, load flow analysis, and regulatory expertise. Recent work includes a congestion management review for ENTSO-E, grid-friendly batteries, and flexible demand in redispatch.<\/p>\n

Lion Hirth is our lead on this topic.<\/p>\n

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\"Prof.<\/p>\n

Prof. Dr. Lion Hirth
hirth@neon.energy<\/a>
+49 157 55 199 715<\/a><\/p>\n

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Reports<\/a><\/h3>\n

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\"Regional<\/a>
Enercity
2026<\/span><\/p>\n

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\"Using<\/a>
Agora Energiewende
2023<\/span><\/p>\n

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\"Dispatch<\/a>
Elia \/ 50Hertz
2021<\/span><\/p>\n

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\"Market-based<\/a>
BMWi
2018<\/span><\/p>\n

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\"Nodal<\/a>
BMWi
2018<\/span><\/p>\n

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Executive Education Courses<\/a><\/h3>\n

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The Economics of Power Grids (EN)<\/strong> A comprehensive introduction to the technology, economics, operation, and regulation of electricity grids: from locational pricing and redispatch to network charges and dynamic grid fees. Designed for anyone who plans, operates, regulates, or uses electricity grids, from network operators to flexibility providers.<\/p>\n

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>> More details<\/a><\/p>\n

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Project References<\/a><\/h3>\n

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Congestion management review (ENTSO-E).<\/strong> With the rise of wind and solar energy, batteries, and electrification, grid congestion is a growing challenge for many TSOs. ENTSO-E\u2019s report provides a comprehensive summary and evaluation of solutions for congestion management and system operation. We reviewed and discussed the study with TSO representatives from 20 European countries. 2025.<\/p>\n

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DataFlex (TSOs).<\/strong> Germany manages grid congestion through mandatory, cost-compensated redispatch, but fair compensation for flexible demand is hard to determine. Market-based redispatch is an alternative but invites baseline manipulation and inc-dec gaming. With Consentec, we help two German TSOs refine the auction and compensation rules and prepare deployment. 2025\u201326.<\/p>\n

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Regional wholesale prices (Enercity).<\/strong> Few energy policy questions are debated so fiercely as the split of the German bidding zone: the wholesale market is blind to grid congestion, leading to inefficient dispatch, costly redispatch, and distorted cross-border trade. For the utility Enercity, we delivered a study on the pros and cons of uniform, zonal, and nodal pricing. 2025. Report<\/a>.<\/p>\n

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Synchronizing renewables with grids (dena).<\/strong> Germany\u2019s rapid renewable expansion is driving up network costs. For the German Energy Agency dena, with Consentec, we design and evaluate policy options internalizing these costs and support the government\u2019s goal of synchronizing renewable deployment with grid expansion without slowing the energy transition. 2025\u201326.<\/p>\n

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Locational signals (BMWE).<\/strong> Locational signals are essential to integrate the growing number of flexible consumers efficiently and to limit rising grid investment. They can come from spatially differentiated wholesale markets, grid tariffs, or investment mechanisms such as the EEG and a capacity market. For the German government, we develop and evaluate such instruments with Consentec. Ongoing.<\/p>\n

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Electricity grid planning (BMWE).<\/strong> With structural congestion and planned grid investments of some \u20ac600 billion, grid financing ranks high on Germany\u2019s energy policy agenda. This large project, led by Consentec, supports the German government on network expansion planning; we advise on grid financing, cross-border cost sharing (CBCA), and network charge reforms. Ongoing.<\/p>\n

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PKNS (BMWK).<\/strong> The \u201cPlatform Climate-Neutral Power System\u201d is Germany\u2019s principal stakeholder forum for electricity market design. With our partners Guidehouse, Consentec, Fraunhofer ISI, r2b, and \u00d6ko-Institut, we provided scientific guidance to the economics ministry. Neon led the work package on locational signals, covering a bidding zone split and dynamic grid fees. 2023\u201324. Website<\/a>.<\/p>\n

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Using instead of curtailing (Agora Energiewende).<\/strong> We supported Agora Energiewende, Germany\u2019s leading energy think tank, on electricity market design, in particular regional dynamic network charges, developing a proposal for \u201cusing rather than curtailing\u201d surplus wind power. 2022. Report<\/a>.<\/p>\n

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Congestion Management Games (TenneT).<\/strong> Local flexibility markets are prone to strategic bidding. For TSO TenneT, jointly with Takon and ZEW, we assessed such markets game-theoretically, formally identifying optimal increase-decrease bidding strategies and mitigation measures. 2021\u201324. Paper<\/a>.<\/p>\n

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Nodal pricing model (TSO).<\/strong> Nodal pricing reflects transmission constraints in locational prices, which requires detailed network modeling. For a European TSO, in a d-fine-led project, we developed a GAMS-based load flow model covering all of Europe to simulate locational marginal prices. 2021\u201322.<\/p>\n

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Dispatch Hubs (Elia \/ 50Hertz).<\/strong> Grid congestion is widespread in Europe, but splitting bidding zones is politically deadlocked, so Belgian TSO Elia proposed \u201cdispatch hubs,\u201d small flexible zones within existing ones. For Elia and 50Hertz, we assessed eight options to compensate parties in a hub and recommended cost-based payments, independent of bidding behavior, to limit gaming. 2020\u201322. Report<\/a>.<\/p>\n

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>> All project references<\/a><\/p>\n

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Academic Publications<\/a><\/h3>\n

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Ehrhart et al. (2026): Congestion management games in electricity markets<\/a>
Ehrhart et al. (2025): Analysis of a capacity-based redispatch mechanism<\/a>
Eicke & Schittekatte (2022): Critical assessment of arguments against nodal prices<\/a><\/p>\n

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