The EU Agency for the Cooperation of Energy Regulators (ACER) publishes today its 9^th Report on the Contractual Congestion in the EU gas markets. The report found that contractual congestion in the EU gas transmission networks in 2021 remained low, but that competition for transmission capacity increased in the fourth quarter of the year.

Why contractual congestions should be monitored?

Contractual congestions are relevant as they signal a reduction in market efficiency: while some network users are not able to obtain the transmission capacity product of their choice (and need to rely on congestion-mitigating measures to access the gas market), others who contracted capacity may not use it.

What are the report’s main findings?

• In 2021, congestion was detected at 18 entry and exit points across Europe - around 5% of all Interconnection Points (IPs) in the EU.
• To address market inefficiencies and improve the use of transmission network, congestion-relieving and mitigating measures were applied: oversubscription (where more capacity is marketed than is technically available), remained the most used congestion management procedure (CMP) in the EU gas markets. 
• Competition for transmission capacity increased in the fourth quarter of 2021: demand for capacity at some locations exceeded the available capacity, leading to a rising number of auctions clearing with a premium. If the same level of competition persists in 2022, a rise of contractual congestion may be observed.

ACER further observes that multiple auctions in the first and second quarters of 2022 have closed with premia and some auctions were terminated without any capacity having been allocated.

Read more about ACER’s findings.