Cross-Border Electricity Congestion Management

Detailed Explanation With Case Laws

1. Introduction

Cross-Border Electricity Congestion Management means the legal and technical system used to manage situations where the demand for electricity transmission between two or more countries is greater than the available network capacity.

For example:

Country A → Interconnector → Country B

If the interconnector can safely carry only a limited amount of electricity, the transmission capacity must be allocated according to legal and market rules.

The main objectives are to maintain network security, efficient electricity trading, non-discrimination and proper use of cross-border capacity.

2. Meaning of Congestion

Congestion occurs when electricity flows requested by market participants cannot all be accommodated because transmission infrastructure has limited capacity.

For example:

Available capacity = 1,000 MW

Requested cross-border flows = 1,400 MW

The network has a 400 MW capacity constraint.

The legal system must determine how this limited capacity is allocated.

3. EU Legal Framework

The main EU framework includes Regulation (EU) 2019/943 on the internal market for electricity and Regulation (EU) 2015/1222, known as the Capacity Allocation and Congestion Management (CACM) Regulation.

Article 16 of Regulation 2019/943 requires congestion to be addressed through non-discriminatory, market-based solutions that provide efficient economic signals. TSOs must also consider the effects of operational measures on neighbouring control areas and coordinate with affected TSOs. (Eur-Lex)

4. Cross-Zonal Capacity

Cross-zonal capacity is the transmission capacity available for electricity exchange between bidding zones.

The basic process is:

Calculate available network capacity

↓

Allocate capacity

↓

Electricity market clearing

↓

Physical electricity flow

The capacity calculation must consider the physical characteristics of interconnected networks.

5. Flow-Based Capacity Calculation

Modern European electricity markets increasingly use a flow-based approach.

Instead of looking only at individual borders, the system considers how electricity transactions affect several network elements.

One important concept is the Power Transfer Distribution Factor (PTDF).

It helps estimate how a change in electricity trading affects particular network elements.

This approach is particularly important in highly interconnected regions because electricity does not always follow the commercial contract path.

6. Market-Based Congestion Management

EU law generally favours market-based methods.

This means that available cross-border capacity is allocated through market mechanisms rather than simply being distributed according to national preferences.

Market coupling allows electricity markets in different countries to operate together.

For example:

Country A low electricity price

↓

Electricity flows toward

↓

Country B higher electricity price

until available transmission capacity or other market constraints are reached.

This can improve the efficient use of interconnected networks.

7. Redispatching and Countertrading

Congestion can also be managed after market results are calculated.

Redispatching

The TSO changes the output of selected generators or other resources to relieve congestion.

Countertrading

The system operator carries out additional transactions to reduce problematic flows.

These measures can be costly, so EU law contains rules concerning their coordination and cost sharing.

In 2024, the General Court examined the methodology for sharing the costs of redispatching and countertrading in the Core region. (curia)

8. Minimum Cross-Border Capacity

Regulation 2019/943 establishes minimum requirements concerning the amount of capacity that should be made available for cross-zonal trade.

The legislation requires TSOs to work toward minimum cross-zonal capacity levels and provides mechanisms for addressing structural congestion. (Eur-Lex)

This is important because a Member State should not solve its internal network problems simply by unnecessarily reducing capacity available for cross-border trade.

9. Case Law: BNetzA and Germany v ACER

In Cases T-600/23 and T-612/23, BNetzA and Germany v ACER, the General Court examined common methodologies for calculating day-ahead and intraday cross-zonal capacity in the European Core region.

The Court's judgment of 1 October 2025 partially annulled the ACER decision concerning the methodology. The case dealt with issues including internal critical network elements, flow-based capacity calculation and the interpretation of Regulations 2015/1222 and 2019/943. (InfoCuria)

Relevance

The case demonstrates that congestion-management methodologies must remain within the powers and requirements established by EU legislation.

10. Case Law: CRE v ACER

In Case T-446/21, Commission de régulation de l'énergie (CRE) v ACER, the General Court examined the methodology for sharing costs associated with redispatching and countertrading in the Core region.

The case also concerned the determination of the threshold for legitimate loop flows under Article 16(13) of Regulation 2019/943. (InfoCuria)

Relevance

The case shows that congestion management involves not only technical decisions but also legally controlled rules concerning cost allocation and network capacity.

11. Case Law: Polskie Sieci Elektroenergetyczne v ACER

In Case C-281/23 P and related proceedings, the Court of Justice considered European balancing platforms and the use of cross-zonal capacity for exchanging balancing energy.

The judgment of 23 October 2025 concerned the legal framework for mFRR and aFRR balancing platforms and the functions necessary for their operation. (Eur-Lex)

Relevance

The case shows that congestion and cross-border capacity management are connected not only with normal electricity trading but also with balancing and system security.

12. Role of Transmission System Operators

TSOs have an important role in congestion management.

They are responsible for:

calculating available capacity;

monitoring network security;

coordinating with neighbouring TSOs;

managing congestion;

applying remedial actions;

providing relevant data; and

maintaining reliable electricity flows.

However, TSOs must exercise these functions within the applicable EU and national legal framework.

13. Loop Flows

Loop flows occur when electricity generated in one area flows through neighbouring networks because electricity follows physical network characteristics rather than only contractual paths.

They can contribute to congestion on internal network elements.

EU law therefore contains rules addressing internal congestion and the relationship between internal network constraints and cross-border capacity.

14. Importance for Renewable Energy

Cross-border congestion management is increasingly important because renewable generation is geographically uneven.

For example:

High wind generation in Country A

↓

Large electricity export

↓

Interconnector becomes constrained

↓

Congestion-management measures required.

Efficient congestion management allows renewable electricity to reach consumers while maintaining network security.

15. Conclusion

Cross-Border Electricity Congestion Management provides the legal and technical framework for dealing with limited transmission capacity between interconnected electricity markets.

The main mechanisms include:

cross-zonal capacity calculation;

market coupling;

flow-based capacity allocation;

redispatching;

countertrading;

coordinated TSO action; and

balancing mechanisms.

EU Regulation 2019/943 requires congestion to be addressed through non-discriminatory, market-based solutions and establishes important rules concerning cross-zonal capacity. (Eur-Lex)

The cases BNetzA and Germany v ACER, CRE v ACER, and Polskie Sieci Elektroenergetyczne v ACER demonstrate the growing legal importance of ACER decisions, capacity calculation, congestion costs, balancing and cross-border coordination. (Court of Justice of the European Union)

Overall, effective congestion management seeks to balance efficient cross-border electricity trade with network security. It is therefore a central part of modern electricity-market law and the integration of increasingly interconnected and renewable-based energy systems.