The single European electricity market is constantly developing.  Electricity has been traded across national borders increasingly since the end of the nineties.  The flows of electricity here primarily follow the different price levels in Europe. However, the transmission capacities at the interconnectors between the individual European neighbours are limited. The consequence is that today, the demand for transmission capacities for cross-border trading exceeds the available capacity of the lines at many locations by far, resulting in cross-border congestions. If all requests were permitted, then overloads would inevitably be the consequence. The security of the grid could no longer be guaranteed.

Different measures are necessary: transpower invests in the construction of new power lines as well as in the further development of the existing allocation procedure in order to improve the situation in the long term and permanently.  New lines, however, must pass through complex and time-consuming approval procedures. Therefore, it is necessary to allocate the scarce transmission capacities to the traders for reliable grid operation. Methods have been developed to cope with this task, which are grouped under the term Congestion Management.

Today, available capacities are mostly allocated by means of auctions. Auctions are transparent, market-oriented and free of discrimination and hence meet all the requirements of the European regulation. The transmission system operators (TSO) have setup bilateral or multilateral auction offices to carry out joint and coordinated auctions. They take over the operating side of handling congestion management.

transpower belongs to four of the seven European regional markets (Northern Europe, Central Eastern Europe, Central Western Europe und Central South Europe) in which the harmonisation of a common single European electricity market is being pushed ahead for the time being. As the only German transmission system operator (TSO), transpower is involved in four regional markets and hence has taken a central key role.