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Anticipating interconnector congestion in Europe: A framework for understanding physical and market flows
Comparing a physical flow to a market capacity gives a misleading picture of interconnector congestion. This whitepaper explains why the grid and the market are two separate realities, and introduces a framework for reading each cross-border signal on its own terms, border by border.
Julien Lavalley
When an interconnector reaches its limit, prices on either side of the border diverge. Anticipating that moment matters to anyone trading cross-border spreads. The signals available are easy to misread, though.
On the border between France and Germany, the physical net flow and the total scheduled commercial flow differed by more than 1 GW in 46% of hours in 2026. In 12% of hours, they pointed in opposite directions.
This whitepaper shares what we learned while building interconnector signals for European borders. It covers:
Physical vs market flows: why a trade scheduled from France to Germany can physically flow through Belgium and the Netherlands.
Physical capacity: why it is clear-cut for HVDC links but rarely a single number for AC borders.
Market capacity: how the CNTC and flow-based methodologies allocate cross-border capacity, and what NTC, ATC, CNEC, PTDF, RAM, Shadow ATC and MaxBex actually measure.
A framework for interpreting interconnector signals: four quadrants that sort every signal by reality (physical or market) and measure (capacity or flow).
Border by border: how methodologies vary across capacity calculation regions and interconnection types.
Key takeaway: physical congestion and market congestion are separate events, and one can happen without the other. Each signal needs to be read within its own reality.
Whitepaper
