A mandatory bidding contract is an agreement between a grid operator and a company with flexible capacity. With such a contract, the participant is obliged to always place a redispatch bid on a connected trading platform when a congestion situation is announced. Participation is therefore not optional: unlike ‘normal’ redispatch, the participant is required to submit a bid.
The bids may involve temporarily reducing consumption, limiting feed-in, or increasing demand or generation. In return, the company receives compensation, both for the availability of flexibility and for actual activation.
Participating in a mandatory bidding contract offers security and predictability. Businesses know in advance under which conditions they provide flexible capacity and what compensation they will receive. The combination of a fixed availability fee and additional activation payments makes this product financially attractive. In addition, participation helps reduce stress on the electricity grid, creating room for more connections. This way, the contract delivers benefits not only to the company itself, but also to society as a whole.
A mandatory bidding contract is suitable for large users with a contracted capacity of at least 100 kW. Companies that can adjust their production or consumption at short notice – for example by shifting processes or smartly controlling installations – benefit the most. Often, these are parties already working with a Congestion Service Provider (CSP), or who act as CSP themselves. For businesses in areas where grid capacity is under pressure, a mandatory bidding contract offers a valuable opportunity to monetize flexibility.
Redispatch with mandatory bidding can be an attractive way to deploy flexible capacity. Whether this fits your business depends on financial considerations and how flexibly you can manage your production. Below we outline the main benefits and points of attention.
Let GOPACS guide you through the registration process and the necessary steps.
Select a Congestion Service Provider to place bids, manage control, and handle settlement.
Ensure reliable (near) real-time measurement and control, for example via an EMS or telemetry.
Submit a buy/sell bid via a connected trading platform, specifying volume, price, and time window.
When activated, follow the instruction (increase/decrease consumption or generation) and log the delivered flexibility.
After verification of the delivered MWh, payment follows according to your bid via the market or CSP settlement.
Join mandatory bidding and earn by using your flexibility smartly. Benefit from attractive compensations while contributing to a reliable electricity grid.
A cold storage facility signs a mandatory bid contract. They agree to make at least 1 MW of flexibility available during congestion hours. The facility receives a fixed availability fee in return.
When the grid operator expects a congestion issue, the cold storage facility is required to place a bid via its CSP on one of the connected trading platforms, for example: “1 MW reduced consumption available between 17:00 and 19:00.”
The bid is selected. The cold storage facility automatically reduces its cooling machines by 1 MW via the EMS. The grid operator verifies through metering data that the effect occurs at the bottleneck.
After verification, the cold storage facility receives both the availability fee and the agreed activation payment. This way, the company earns from its flexibility while also supporting grid stability.
A congestion situation occurs when, at a specific moment, the electricity grid needs to transport more power than is technically safe. There is temporarily insufficient transport capacity, and the grid reaches its local limit.
A flexibility bid is a proposal from a Congestion Service Provider (CSP) to temporarily make flexible capacity available via redispatch on the congestion market, helping to prevent or resolve grid congestion. A flex offer follows a market announcement and consists of several standard components.
A counter bid is the order placed outside the congestion area to maintain the national balance on the electricity grid. Together, the bid and counter bid (buy and sell) resolve a congestion situation without creating imbalance. The counter bid is an essential part of the redispatch process.
A market announcement is a request for CSPs to submit a redispatch or flex offer on one of the connected trading platforms. These bids are submitted as buy and sell orders, both inside and outside the congestion area.
On the congestion market, trading platforms are digital marketplaces where market parties trade flexible capacity via redispatch to help resolve grid congestion. These platforms facilitate electricity trading and enable participants to submit bids to increase or decrease their energy production or consumption, depending on the needs of the grid. This allows them to manage risks and capture value from market opportunities.
Flexibility is delivered at fixed, pre-agreed moments. This provides certainty and yields a fixed availability fee.
With every market request you are obliged to place a flex-bid. The income depends on market prices.
You offer flexibility whenever it suits you. Successful bids generate a fee per activated megawatt hour.
