As more renewables enter the system, some areas produce more electricity than what the grid can handle, while others struggle to meet demand. Host Georgia Knapp once again invited gridX Energy Market Expert Irene Guerra Gil to unpack how this growing mismatch is leading to congestion and why it's one of the biggest challenges in Europe’s energy transition.
Congestion not only affects where electricity flows, it also impacts how it is priced. Irene breaks down how grid bottlenecks lead to regional price spreads, distort market signals and require costly interventions from system operators.
To manage overloaded grid sections, TSOs rely on redispatching and adjusting power plant output to redirect electricity flows. Learn how redispatching works, why it’s becoming more frequent, and the high costs it creates for energy systems.
There’s one key factor that energy markets often ignore: location. Irene explains how current price signals fall short in reflecting local grid conditions and why better locational pricing could help guide investment and reduce congestion.
Europe is working to modernize its market design. In this episode, we break down proposed reforms aimed at tackling congestion through improved price signals and local flexibility. Irene also explains how tools like batteries, flexible demand and smart energy management can offer grid relief in real time.
"Automation, AI and digitalization are transforming balancing markets just like everything else. AI forecasting helps TSOs, DSOs and generators anticipate what’s coming into the grid. Virtual power plants now aggregate assets and predict consumption thanks to these tools. None of this was possible before."
"Balancing responsibilities between TSOs and DSOs need to be carefully coordinated. TSOs manage the national grid, DSOs operate locally. And their actions can easily cancel each other out if there’s no transparency. Local FlexMarkets are emerging, but without alignment, congestion issues could shift rather than be solved."
"The common myth about balancing markets is that everyone can participate and that it’s easy. People often don’t realize the work behind the pre-qualification processes or how difficult it can actually be to join these markets."
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