Uniper demands appropriate compensation for re-dispatching operations by Franken power plant

Uniper has filed suit against TenneT at the Bayreuth Regional Court. In the suit, Uniper is demanding to be appropriately compensated for re-dispatching operations of the Franken gas-fired power plant near Nuremberg on behalf of TenneT in 2013 and 2014. Uniper believes that the compensation arrangements for intervening in power plant operations to stabilize the electricity grid (“re-dispatching”) should have been revised according to the rulings issued by the Higher Regional Court of Dusseldorf. On 28 April 2015, the Higher Regional Court of Dusseldorf ruled that the conditions laid down by the Federal Network Agency have led to an unreasonably low remuneration. Using the Franken power plant as a precedent, Uniper is asking the court to clarify what constitutes appropriate compensation for re-dispatching. The outcome of the case would thus have an impact on other power plants subject to re-dispatching.

In its April 28, 2015, decision, the Higher Regional Court had determined that re- dispatching operations of a power plant were equivalent to an alternative for a grid asset because the intervention eliminates transmission network congestion. Such congestion could be remedied by expanding the transmission network. Regulated transmission network charges, on the other hand, are based on the premise that all costs must be reimbursed. It is therefore appropriate to also reimburse the prorated fixed costs of a power plant used for re-dispatching. The payments made by TenneT in 2013 and 2014 do not constitute this full reimbursement, even though the power plant was re-dispatched for grid-stabilization purposes to a substantial extent.

Uniper has also chosen to file suit because the majority of the new provisions in the draft electricity-market legislation either disregard the reimbursement principles established by the Higher Regional Court or remain based on structurally insufficient compensation. The draft legislation further provides that its new provisions should apply retrospectively, which would largely circumvent the Higher Regional Court’s ruling.

Transmission system operators have increasingly resorted to re-dispatching measures in order to maintain electricity supply in emergencies. In 2015, they occurred virtually every day. At some 10 terawatt-hours, the amount of electricity re-dispatched in 2015 actually exceeded the amount re-dispatched in the two previous years combined (2013: 4.6 terawatt-hours, 2014: 5.2 terawatt-hours).

The Franken power plant is located in the Gebersdorf district of Nuremberg and comprises the generating units 1 and 2. The net installed generating capacity is 383 megawatts (Unit 1) and 440 megawatts (Unit 2). The predominant fuel used is natural gas, but the units can also be fueled with oil. Uniper Kraftwerke GmbH is the sole owner of both generating units.