Nordic congestion's arrangement as a model for Europe? Physical constraints vs. economic incentives

Regulating Networks in the New Economy

“…Market mechanisms for allocating scarcity may be preferred. These market mechanisms are based on auctions including or excluding secondary access rights and strict rules on usage (such as "use it or lose it" rules) (Ehrenmann & Smeers, 2005;Glachant, & Pignon, 2006).…”

Congestion management in the deregulated electricity market: An assessment of locational pricing, redispatch and regulation

“…The above described non-transparency provides network operators with the possibility to exploit flow-capacity estimation in their own benefit, see, e.g., [9]. Naturally, TSOs tend to minimize the chance of network overloading by choosing security margins as large as possible, whereas prosumers demand maximum transmission capacity, i.e., minimum margins, to optimize social welfare.…”

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

“…Fig. 7 shows the 2007 distribution of load flows within UCTE 16 . A.b relative grid-usage: Congestion revenue is distributed according to the relative usage of transfer capacities.…”

“…And even if an agreement is eventually found, such projects all too often can't be accomplished due to local resistance from the political-environmental side. Previously collected congestion revenues may thus get blocked for years and don't flow back to loads who had to pay it initially, which may bring TSOs under suspicion of withholding congestion revenues [16], [17]. Also, the pressure to re-invest congestion revenues (no matter how) could lead to inefficient investment decisions.…”