Will this massive grid revenue lower my electricity bill?
It is possible, but not guaranteed. Under European regulations, the primary requirement is that transmission system operators (TSOs) must first use these congestion revenues for two main grid-related purposes :
Guaranteeing the actual availability of the allocated cross-border grid capacity .
Maintaining or increasing interconnection capacities through physical network investments, such as building new interconnectors .
However, if the revenues cannot be efficiently used for those physical grid improvements, there is an alternative option . Subject to the approval of regulatory authorities (such as the Bundesnetzagentur), the leftover funds can be taken into account when calculating or fixing network tariffs .
The TSOs have indicated that they have used or will use the collected revenues either for direct grid investments or to lower consumer network fees . The Bundesnetzagentur oversees this application and approval process to ensure that any money used to lower network tariffs (which directly affect consumer electricity bills) complies with regulatory rules .
Where does the €198 million in grid congestion income go?
The €198.5 million in grid congestion income collected by German transmission system operators (TSOs) must be used for specific, legally mandated purposes under European grid regulations .
By law, the money is primarily designated for two main options :
Ensuring grid reliability: Guaranteeing that the cross-border electricity capacity auctioned to the market remains actually available .
Expanding the grid: Maintaining or increasing physical transmission capacities through network investments, such as building new interconnectors .
If the money cannot be efficiently spent on those physical grid upgrades, it can be redirected with the approval of regulatory authorities . In this scenario, the funds are used as income to lower the network tariffs that consumers pay on their electricity bills .
The grid operators have indicated that they are using or will use this congestion revenue either for direct grid investments or to lower network fees . To guarantee proper usage, the regulatory agency (Bundesnetzagentur) requires TSOs to go through an official application and approval process whenever they propose using the funds to lower these network fees .
Which national border generates the most money for our grid?
The national border that generates the most money for Germany’s grid is the border with the Netherlands .
According to the report’s data, congestion management at the German-Dutch border generated 72,698,259.0 € in revenue between July 1, 2014, and June 30, 2015 . This represents the single largest source of grid congestion income for German transmission system operators, followed closely by the border with France, which generated 67,064,052.2 € .
How do virtual electricity markets solve physical bottlenecks at national borders?
Virtual electricity markets manage and resolve physical cross-border bottlenecks by using market-based, transparent, and non-discriminatory auctioning systems to allocate limited transmission capacity . They do this through two main virtual mechanisms:
Explicit Auctions: Used for daily, monthly, and annual products, these auctions sell off transmission capacity beforehand, completely separated from actual electricity trading . Participants bid for the physical transmission space, and the capacity is awarded to the highest bidder . The highest bid establishes the price for that capacity .
Implicit Auctions (Market Coupling): Used for the day-ahead market, this regime jointly allocates both the physical cross-border capacity and the electricity itself (the commodity) in a single transaction . In regions like Central West Europe, this is optimized through Flow-Based Market Coupling, which applies integrated principles to calculate day-ahead capacity, manage bottlenecks, and divide the resulting congestion revenues .
Who actually gets to spend Germany’s massive international congestion revenues?
The entities that actually collect and spend Germany’s international congestion revenues are the country’s four transmission system operators (TSOs). These grid companies are responsible for operating and maintaining the high-voltage electricity transmission networks that connect Germany to its neighbors.
The four operators listed in the report are:
TenneT TSO GmbH (operating at the borders with the Netherlands, Denmark, and the Czech Republic)
Amprion GmbH (operating at the borders with France and Switzerland)
TransnetBW GmbH (operating at the borders with France and Switzerland)
50Hertz Transmission GmbH (operating at the borders with Poland and the Czech Republic)
While these TSOs are the ones who receive and physically spend the funds, they do not have free rein over the money. They must spend it under the strict oversight and approval of the national regulatory authority, the Bundesnetzagentur (Federal Network Agency), to ensure all expenditures comply with European legal requirements for grid maintenance, expansion, or tariff reduction.
Why does Flow-Based Market Coupling change how countries share grid income?
Flow-Based Market Coupling changes how countries share grid income by introducing a new principle for dividing day-ahead congestion rents (revenues) and related UIOSI (Use It Or Sell It) expenditures .
Traditionally, implicit auctioning systems jointly allocate both the physical cross-border capacity and the electricity commodity itself . The transition to Flow-Based Market Coupling in Central West Europe establishes a redesigned, integrated framework for calculating and distributing these day-ahead congestion revenues and their associated operational costs among the participating national grid operators .
Source institutions：Bundesnetzagentur
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