ACER warns about network congestions in EU

In early July, the EU EU Agency for the Cooperation of Energy Regulators (ACER) announced that the EU's electricity network is increasingly burdened and called on transmission system operators to urgently fulfill their obligation to make at least 70% of transmission capacity available for cross-border electricity trade by the end of 2025.

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The European Parliament and the Commission were informed of this requirement in April. In its 2024 Market Monitoring Report on cross-zonal electricity trading capacities, ACER reminds that it had already warned the European Parliament and the Commission in April this year that much is at stake if these minimum requirements are not met.

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The ACER report states that the EU's electricity network is increasingly congested. Corrective measures, such as re-dispatching, increased by 14.5 % in 2023. The costs of managing this congestion in 2023 amounted to 4 billion euros, and some operators in highly interconnected areas of the EU made available an average of between 30 and 50 % of the physical capacity of certain network elements in 2023, which is far from the necessary 70 %, according to ACER.

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Meeting the 70 % requirement requires a unified approach – the actions (or inactions) of each member state affect others and ultimately EU consumers. Delays in this lead the EU away from the goal of integrating the electricity market. The implementation of coordinated congestion management processes, investments in the network, and improvement of bidding zone configurations are required. ACER calls on member states and transmission system operators to swiftly implement the three tools envisaged by EU rules to meet the minimum requirement of 70 %:

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-????????? Operators need to rapidly implement coordinated processes to first calculate capacity and then manage congestion. Currently, network congestion is mostly assessed at the national level. The operators need to optimize and coordinate network congestion management. Moving towards a more regional approach will ensure that member states causing loop flows bear their costs, making more capacity available.

-????????? Operators need to undertake targeted network development, focusing on the most congested areas of the network.

-????????? Improving the configuration of bidding zones: it is advised that if they consistently fail to meet the 70 % requirement, they better align the bidding zone boundaries with the locations where structural network congestion occurs.

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The Joint Research Centre of the European Commission in its report expects that network congestion will significantly worsen in the coming years, even in an optimistic network development scenario. Their results suggest that uncoordinated implementation will greatly increase the need for re-dispatching – adjusting producers' schedules after the market decides to achieve a physically feasible dispatch, as networks will become increasingly constrained and incapable of fully transmitting all available renewable electricity. This could reduce up to 310 TWh of renewable generation due to network constraints by 2040 in a “business as usual” network expansion scenario.

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