Legal protection in the grid reserve – part 2

We have already dealt with the legal protection options in the tendering process for the grid reserve some time ago. Now the Federal Administrative Court (BVwG) has also addressed this issue and affirms the party status of the power plant operator whose bid was selected by the control area manager (APG) in the regulatory authority’s selection approval procedure.

Grid reserve

Section 23b of the Electricity Industry and Organization Act 2010 (ElWOG 2010, as amended by Federal Law Gazette I 2021/17) regulates the procurement of the gid reserve. This refers to the provision of additional generation capacity or reducible consumption capacity, which can be called upon in the event of a bottleneck.

These regulations raise several legal questions: Among other things, the legal protection of grid reserve providers (plant operators) in the two-stage grid tendering procedure is of interest. In the blog post “Legal protection in the grid reserve,” published shortly after this regulation came into force in 2021, the legal protection options for plant operators were discussed against this background. Among other things, the party status of plant operators in the regulatory authority’s selection approval procedure, which is part of the two-stage grid reserve tendering procedure, was examined and, based on closer considerations, affirmed – there is no explicit legal provision regulating the status of parties in this procedure.

Decision

In a recent decision, the Federal Administrative Court dealt with the party status of plant operators in the regulatory authority’s selection approval procedure and confirmed the view expressed in the blog post that certain plant operators have party status in this procedure.

This decision is based on the following facts:

The operator of a power plant had submitted a bid in the grid reserve procurement procedure. This bid (along with other bids) was proposed for approval by the control area manager, but was not approved by the regulatory authority. The approval notice was only sent to the control area manager.

The power plant operator then applied to the regulatory authority to be granted party status, to be served with the approval notice and to have access to the files. The regulatory authority rejected these applications on the grounds that the operator did not have party status in the regulatory authority’s selection approval procedure.

The complainant then lodged an appeal against the regulatory authority’s decision with the BVwG. The BVwG overturned the decision, ruling that the regulatory authority had wrongfully denied party status and the associated rights.

Specifically, the BVwG justified the party status of the plant operator (included in the control area manager’s proposal) essentially by stating that section 23b ElWOG 2010 establishes the plant operator’s legal interest in the matter and thus, in conjunction with section 8 AVG, grants it party status in the regulatory authority’s selection approval procedure. The BVwG derived this legal interest in particular from the legal consequences of the selection approval decision. The sovereign selection approval procedure, which is embedded in the private-sector procurement process, has the effect that a plant operator (included in the control area manager’s proposal) can only be awarded the contract if the regulatory authority approves the proposed selection submitted by the control area manager. If, however, the regulatory authority refuses to approve its bid because, for example – as in the present case – it does not meet the legal requirements in the opinion of the regulatory authority, a generation plant operator can no longer obtain the conclusion of a grid reserve contract. The plant operator therefore has a legal interest in the matter.

The regulatory authority will now decide on the requested granting of party status, notification of the approval decision and access to the case files in the further course of the proceedings, taking into account the legal opinion of the BVwG.

Result

The Federal Administrative Court affirms the party status of the power plant operator whose bid was selected by the control area manager in the regulatory authority’s selection approval procedure. It thus followed the view expressed in the 2021 blog post “Legal protection in the grid reserve.” This strengthens the legal position of plant operators in the grid reserve procedure.

Disclaimer

This article is for general information only and does not replace legal advice. Haslinger / Nagele Rechtsanwälte GmbH assumes no liability for the content and correctness of this article.

 

12. May 2025

 

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