Definition: Reduced Congestion Cost
Reduced Congestion Cost
Transmission congestion is a phenomenon that occurs in electric power markets. It happens when scheduled market transactions (generation and load) result in power flow over a transmission element that exceeds the available capacity for that element. Since grid operators must ensure that physical overloads do not occur, they will dispatch generation so as to prevent them. The functions that provide this benefit provide lower cost energy, decrease loading on system elements, shift load to off-peak, or allow the grid operator to manage the flow of electricity around constrained interfaces (i.e. dynamic line capability or power flow control).