Close Navigation
.

Transmission Congestion

Trading Term

Transmission congestion occurs when the physical capacity of the transmission network is insufficient to deliver the cheapest available generation to where demand is located, forcing the dispatch of more expensive local generation instead. The resulting cost differences appear as locational differences in wholesale prices across a grid. Congestion is one reason grid operators care not only about how much generation to commit but where, and it is part of why forecast accuracy at the level of individual load centers matters more than a regional average would suggest.

Energy expenditure implications of next-day temperature forecasts

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.