The EU Agency for the Cooperation of Energy Regulators (ACER) found a halving of gas contractual congestion in the EU transmission networks according to its 8th specialised report on the subject published today. Contractual congestion happens when some network users were not able to obtain the capacity product of their choice and had to rely on congestion-mitigating measures to access the gas market. It may signal a reduction in market efficiency. Transmission System Operators, for instance, can apply a number of congestion management procedures (‘CMPs’) to improve market efficiency.
In 2020, auction premia, which occur when demand for capacity in the auction exceeds the offer and result in higher prices, dropped by 70% compared to 2019. Congestion was detected at 19 entry and exit sides across Europe, which is around 5% of all Interconnection Points (‘IPs’) in the EU and a halving compared to 2020. The Report further finds that the Oversubscription mechanism, where TSOs sell more capacity than what is technically available, buying back some capacity in the event all capacity is effectively used (as do airlines when a flight is overbooked), remains the most used CMP in 2020 despite a decrease of about 25%; the decrease is partly compensated by an increased use of Firm Day-Ahead Use-It-Or-Lose-It and Surrender measures.
The report has suggestions for further research on congestion in the EU gas markets.
