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Power trading and Congestion Management in Europe

General background

The single European electricity market has grown closer in recent years: Since the end of the 1990s, electricity has increasingly been traded across borders. However, the transmission capacity at the cross-border hubs with European neighbours is limited due to the way the system has historically developed. In many places, the desired transmission capacity exceeds the actually available transmission capacity, causing bottlenecks.

Congestion management seeks to prevent such bottlenecks, with auctions being one of the key instruments used in most European countries today: Cross-border transmission capacity is being auctioned, which requires that all companies start from the same baseline criteria and conditions. Basically, there are two different types of auctions: explicit and implicit auctions. In explicit auctions, only a right to the use of transfer capacity (transfer right) is auctioned. The corresponding cross-border energy transaction the transfer right is to be used for, must be concluded separately by the trader via the electricity exchanges or off-market (“over the counter” (OTC)). In the case of an implicit auction, a binding energy delivery is always linked to the transfer right (market coupling).

Legal framework of congestion management

In accordance with § 15 of the German Electricity Grid Access Ordinance (StromNZV) and pursuant to Regulation (EC) No 714/2009 on conditions for access to the network for cross-border exchanges in electricity, transmission system operators are obliged to allocate the available line capacities through market-oriented and transparent procedures without discrimination in case of congestion, insofar as such congestion cannot be prevented by means of grid- and market-related measures within economically reasonable boundaries. Moreover, the regulatory framework given by Regulation (EC) No 714/2009 provides for creation of harmonized network codes and guidelines which amongst others also shall cover rules for congestion management.

With entry into force of Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (Guideline on Capacity Allocation and Congestion Management; “CACM”) on 14.08.2015, in addition to Regulation (EC) No 714/2009 harmonized minimum requirements for a uniform capacity allocation in the day-ahead and intraday timeframes as well as framework conditions and processes for further development of an efficient system of capacity calculation and allocation as well as congestion management (e.g. redispatch). Regulation (EU) 2016/1719 of 26 September 2016 establishing a guideline on forward capacity allocation (Guideline on Forward Capacity Allocation; “FCA”) entered into force on 17.10.2016 supplementing Guideline CACM with regulations covering the long-term timeframes. The provisions of these two EU regulations are to be implemented according to the respective deadlines.

Further Information

On the following pages, you will find information on the existing international transmission lines that currently connect the transmission network of 50Hertz to the transmission networks of other countries. Here you can inform about the latest developments of the projects for expansion and reconstruction of these so-called interconnectors. Furthermore, we publish up-to-date data on revision planning and failures, which affect the transmission capacities of the interconnectors.

In order to ensure the efficient use and safe operation of the transmission network of 50Hertz as part of the European network, the cross-border transmission capacities available for international electricity trading are determined according to a method approved by the German National Regulatory Authority (Bundesnetzagentur) and made available to the market by way of a transparent and non-discriminatory allocation process.
One of the objectives of the EU's third energy package is the development of an integrated European electricity market. For this purpose, 50Hertz closely cooperates with the other European transmission network operators in various projects that are described below.