How much money did German grid operators make from border congestion?
Between July 1, 2013, and June 30, 2014, German transmission system operators collected a total of €194,413,370 in revenues from managing cross-border electricity grid congestion .
Will these multi-million euro revenues help lower your electricity bills?
Yes, these revenues can help lower your electricity bills, but only under specific conditions.
By law, grid operators must first prioritize spending this money on guaranteeing grid availability or investing in new cross-border network infrastructure . However, if the money cannot be efficiently used for those physical grid improvements, it can be repurposed to lower network tariffs (the fees included in consumer electricity bills) . This redirection requires strict regulatory approval from authorities like the Bundesnetzagentur, and the grid operators have indicated that they used or plan to use a portion of these revenues to help lower network fees for consumers .
Which country borders had the biggest electricity grid bottlenecks?
Germany experiences capacity bottlenecks at its borders with the Netherlands, France, Switzerland, Denmark, the Czech Republic, and Poland .
The severity of these bottlenecks is directly reflected in the congestion revenues generated at each border, with the largest bottlenecks occurring at :
Germany – Netherlands (DE-NL): This border represents the biggest bottleneck, yielding the highest congestion income of approximately €80 million .
Germany – France (DE-FR): This is the second-largest bottleneck, producing around €55 million .
Germany – Denmark (DE-DK) and Germany – Switzerland (DE-CH): Both of these borders faced notable bottlenecks, each generating about €24 million .
By contrast, the borders with the Czech Republic (DE-CZ) and Poland (DE-PL) had the smallest bottlenecks, with both generating less than €10 million in congestion revenues .
Why can’t grid operators spend congestion revenues as pure profit?
Grid operators cannot treat cross-border congestion revenues as pure profit because European law strictly dictates how this money must be spent . Under Article 16 (6) of Regulation (EC) No 714/2009, these revenues are legally ring-fenced and must be used for specific public network purposes :
Guaranteeing grid availability: Ensuring that the transmission capacity already allocated to market participants remains actually available .
Expanding grid capacity: Maintaining or increasing interconnection capacities through network investments, particularly in building new interconnectors .
If these primary infrastructure investments are not possible or cannot be done efficiently, any remaining funds cannot be kept as profit . Instead, they must be used to lower consumer network tariffs (the fees included in electricity bills), subject to approval by the regulatory authorities of the concerned Member States . In Germany, the Bundesnetzagentur directly oversees this application procedure to guarantee that all congestion revenues are used in strict compliance with these legal rules rather than being retained as company profit .
How does implicit auctioning link electricity trading with transmission capacity?
In standard explicit auctions, transmission capacity is sold off beforehand, meaning the physical grid capacity is kept entirely separate from actual electricity trading .
Implicit auctioning directly links these two elements by jointly allocating both the electricity (the commodity) and the cross-border transmission capacity in a single process . Under this market coupling system, when electricity is bought or sold across borders, the grid capacity required to transport it is automatically secured at the same time, rather than requiring traders to purchase the transmission rights separately beforehand .
Which European borders create the most profitable power grid bottlenecks?
Based on the report, the European borders with Germany that create the most profitable power grid bottlenecks—as measured by the congestion revenues they generate—are:
Germany – Netherlands (DE-NL): This is the most profitable bottleneck by a significant margin, generating approximately €80 million in congestion income .
Germany – France (DE-FR): This represents the second-most profitable bottleneck, yielding approximately €55 million .
Germany – Denmark (DE-DK) and Germany – Switzerland (DE-CH): Both of these borders have moderate bottlenecks, generating approximately €25 million and €24 million respectively .
By comparison, the bottlenecks at the borders with the Czech Republic (DE-CZ) and Poland (DE-PL) are far less profitable, generating only about €6 million and €3 million respectively .
Source institutions：Bundesnetzagentur
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