Empirical analysis of the Congestion Revenue Cycle in Europe's electricity grid

Abstract

Abstract-In the light of the ongoing electricity market integration in Europe, the debate has turned to a more regional approach of network access. Among other things, this leads to new questions with regard to the handling of congestion revenues. This paper explores the importance of a comprehensive view at the Congestion Revenue Cycle, consisting of the three stages revenue generation, revenue distribution and revenue usage. The relationship between available capacity and congestion revenue is examined and the effect of several revenue distribution keys is empirically investigated. The findings show that a revenue distribution must consider revenue generation and revenue usage to achieve sustainable results.

EU Electricity Trade Law

“…300 However, the physical characteristics of electricity are not relevant as far as the classification of electricity is concerned. 301 Although the supply of electricity is governed by provisions applicable to sale of goods, they can only be applied with some modifications. (a) According to the mainstream view, the core obligation of the supplier is to enable the extraction of electricity by the buyer.…”

“…300 See already Mahler F (1931). 301 See Bydlinski F (1972), p. 35: "Einen extremeren Standpunkt formuliert in der € osterreichischen Literatur MAHLER, der es aus physikalischen Gründen schlechtweg für unm€ oglich erklärt, die Energie mit der Sache gleichzustellen. Soweit er darüber hinaus Rechtsausführungen macht, sind diese erstaunlich".…”

“…300 According to judgment of the CJEU in Bronner, there are such exceptional circumstances where: (1) the service in itself is "indispensable" to carrying on the other party's business because there is "no actual or potential substitute in existence" for the requested service; (2) the refusal to provide the service would be "likely to eliminate all competition" in the market on the part of the person requesting the service; and (3) the refusal would be "incapable of being objectively justified". 301 In effect, the test laid down 294 Verizon v. Trinko, 540 U. S 300, 307 (1919)).…”

“…296 298 For economic arguments restricting the duty to deal, see Bergman MA (2000. 299 301 Ibid, paras 40- 41. by the CJEU in Bronner prohibits the monopolisation of the market in a way that resembles §2 of the Sherman Act after Trinko but has a broader scope. Because the test is an objective one, it is not necessary to consider intent in the EU.…”

“…492 The Delivery Margin is used for gas contracts rather than electricity contracts. 493 Cross-Margining, Collateral Groups The use of cross-margining or collateral groups depends on the exchange.…”