Where does Germany’s €245 million grid congestion income go?
Germany’s €245,292,704 in grid congestion income is completely used by the German transmission system operators (TSOs) for two regulatory purposes mandated by European law :
Reducing Network Fees: A portion of the revenues is used to lower the network tariffs or fees charged to grid users .
Investing in Grid Upgrades: The other portion is reinvested directly into the physical electricity grids to maintain or expand the capacities of international interconnectors .
Under European Union Regulation (EC) No 1228/2003, these revenues must be strictly allocated to these two uses or to guaranteeing the actual availability of allocated grid capacity . The German transmission system operators confirmed that they fully utilized the collected income for these purposes and intend to do the same with the revenues earned in the following period .
How do cross-border power bottlenecks affect your electricity bills?
Cross-border power bottlenecks occur when there is limited capacity to transport electricity between Germany and its neighboring countries . To manage these bottlenecks, grid operators sell off the limited transmission capacity to the highest bidders through market-based auctions , generating what is known as congestion income .
For an ordinary electricity consumer, these bottlenecks and the resulting auction revenues affect your electricity bill in two direct ways:
Lowering Your Network Fees: By European law, a primary approved use of this auction income is to offset or reduce network fees . When grid operators receive this congestion income, it must be officially factored in to lower or modify the network tariffs that are normally passed down directly onto consumers’ bills .
Funding Grid Upgrades Without Extra Charges: Instead of charging consumers extra to fund grid expansions, operators must reinvest these auction revenues directly into maintaining or increasing the capacity of the physical grid connections . This helps relieve the physical bottlenecks over time and guarantees the reliability of the grid .
In short, the auction system turns the costly issue of grid bottlenecks into a substantial source of revenue—totaling €245,292,704 in this reporting period —which is legally mandated to be returned to the system to suppress your network fees and fund grid upgrades .
Which international borders cause the most electricity bottlenecks for Germany?
According to the report, Germany experiences electricity transmission bottlenecks (capacity constraints) at almost all of its international borders, with the exception of its border with Austria, where no capacity constraints exist .
To manage these bottlenecks, transmission system operators auction off the limited capacity, and the resulting auction revenues (congestion income) directly reflect which borders suffer from the most severe bottlenecks .
Based on these revenues, the international borders causing the most significant bottlenecks for Germany are:
Germany – France (DE-FR): This border represents the most severe bottleneck, generating the single highest share of congestion income at nearly €78 million .
Germany – Netherlands (DE-NL): The second largest bottleneck, producing just over €51 million in congestion revenues .
Germany – Denmark (DE-DK): A major bottleneck area generating approximately €46 million .
Germany – Switzerland (DE-CH): Resulting in just over €31 million in collected congestion revenues .
Germany – Czech Republic (DE-CZ): Causing moderate bottlenecks that generated around €24 million .
Germany – Poland (DE-PL): The smallest bottleneck among the constrained borders, bringing in around €15 million .
How did electricity bottlenecks generate over 245 million euros for Germany?
Germany’s €245,292,704 in congestion income was generated because physical capacity constraints—or bottlenecks—exist at Germany’s borders with the Netherlands, France, Switzerland, the Czech Republic, Poland, and Denmark .
To manage these bottlenecks under European Union regulations, the German transmission system operators (TSOs) must allocate the limited transmission capacity in a transparent, non-discriminatory, and market-based manner . This is accomplished primarily through explicit daily, monthly, and annual auctions .
In an explicit auction, the available transmission capacity is separated from normal electricity trading and sold off beforehand . The auction offices accept the bids of participants who are willing to pay the highest price for this limited cross-border capacity, and this bid establishes the price for that specific auction .
By collecting these auction payments from the constrained borders between July 1 of the preceding year and June 30 of the current year, the German TSOs accumulated the final aggregated congestion income of €245,292,704 .
Why is Germany legally forced to spend congestion revenues on grid upgrades?
Under European Union rules, specifically Article 6 (6) of Regulation (EC) No 1228/2003, any revenues earned from allocating cross-border transmission capacities are legally restricted and cannot be spent freely . The regulation mandates that these congestion revenues must be used exclusively for one or more of the following specified purposes :
Guaranteed Capacity: Guaranteeing the actual availability of the allocated transmission capacity .
Grid Upgrades: Funding network investments to maintain or increase cross-border interconnection capacities .
Network Tariff Modifications: Serving as income that is taken into account when approving or modifying the methodology for calculating network fees .
The German transmission system operators comply with this law by dedicating their entire €245,292,704 in congestion revenues specifically to reducing network fees and investing directly in grid upgrades .
Which European border has absolutely no electricity transmission capacity limits?
The European border with absolutely no electricity transmission capacity limits is the border between Germany and Austria.
While Germany has physical capacity bottlenecks requiring active congestion management and capacity auctions at almost all of its other international borders (including those with France, the Netherlands, Denmark, Switzerland, Poland, and the Czech Republic), the interconnectors to Austria have no capacity constraints, meaning electricity can flow freely without any limitation.
Source institutions：Bundesnetzagentur
This content is for reading and understanding research reports. It does not constitute investment advice or trading signals.
Read in App
Read global research reports on mobile.
This content is for research reading and does not constitute investment advice.