Congestion management of cross-border electricity transmission

A key target for the liberalisation of the electricity sector in Europe is the creation of the Internal Electricity Market (IEM). The rules applied to managing the utilisation of existing cross-border electricity transmission capacity are of particular importance for the efficiency of the IEM. A variety of congestion management methods have been established at different European borders, some of which allow for relatively efficient market outcomes while others result in inefficient outcomes.Frontier Economics and Consentec undertook a study for the European Commission to develop recommendations as to the optimal design of cross-border congestion management for the IEM. The study assessed possible methods for congestion management against criteria of: absence of discrimination, compliance with market principles, maximisation of economic efficiency and ease of implementation. The final report for the study can be found here.