Redispatch and congestion management : future-proofing the European power market : executive summary

In early 2024, the European Commission has proposed a climate target of 90% emissions reduction by 2040. The associated scenarios are relying heavily on the deployment of variable renewables, such as wind and solar PV. Deployment that focuses on resource-rich areas - where wind and solar potentials are strongest - increases the risk that transmission grid infrastructure could be insufficient to transport the energy to demand centres, which are often outside the main area of renewable deployment. This condition may lead to a state in which the wholesale market produces inefficient dispatch decisions that are not aligned with the physical reality in the grid. The main instrument in the European legislation to address this issue is the Bidding Zone Review (BZR), which aims at redrawing bidding zone borders to take structural grid congestion into consideration at the border of each zone. The current BZR kicked off in 2019, with ACER proposing alternative bidding zone configurations in August 2022. Currently, European TSOs investigate the proposed configurations, with final results being expected in December 2024.