Empirical Analysis of the Congestion Revenue Cycle in the European Electricity Market

In the light of the ongoing electricity market integration in Europe, the debate has turned to a more regional approach of network access. Among other things, this leads to new questions with regard to the handling of congestion revenues. This paper explores the importance of a comprehensive view at the Congestion Revenue Cycle, consisting of the three stages revenue generation, revenue distribution and revenue usage. The relationship between available capacity and congestion revenue is examined and the effect of several revenue distribution keys is empirically investigated. The findings show that a revenue distribution must consider revenue generation and revenue usage to achieve sustainable results.