Southeast Europe has traditionally tackled grid congestion by adding physical infrastructure, including new transmission lines, transformers or interconnectors. Rising electricity demand and rapid renewable deployment increase the need for stronger networks. However, major grid projects can take years to develop, permit and construct, while equipment supply chains remain under pressure.
ACER’s 2026 analysis highlights a greater focus on using existing networks more efficiently and deploying grid-enhancing technologies alongside conventional investment. The emphasis reflects constraints that can slow new build timelines and affect delivery of new capacity.
Using existing transmission limits more flexibly
Dynamic line rating is one example of how operational data can change available transfer capability. Transmission lines are often run using conservative seasonal limits even though thermal capacity varies with ambient temperature, wind conditions and solar heating.
Sensors and analytical models can assess real-time operating capability and increase permitted loading when conditions allow. ACER estimates that capacity gains of more than 50% can be possible in certain circumstances.
Those gains do not imply a permanent increase in line size, because available capacity depends on weather, location and operating conditions. Dynamic line rating can still unlock additional transfer capability during many hours without waiting years for a new transmission corridor.
Other grid-enhancing options can deliver similar effects within existing rights of way. Advanced conductors can raise transfer capability, while topology optimisation can adjust network configurations to manage electricity flows more efficiently.
Operational coordination and cross-border capacity calculation
Improved outage coordination can prevent simultaneous maintenance on critical corridors. Curative remedial actions can also allow TSOs to operate closer to network limits while retaining the ability to respond after a contingency.
Flow-based capacity calculation is another tool mentioned for making more of the physical network available for cross-border market coupling. The approach is linked to converting engineering information into additional market capacity.
Distribution-level flexibility behind local constraints
At distribution level, local flexibility is presented as a parallel mechanism for addressing constrained equipment. A transformer may face constraints for only a few hours during a winter evening or a summer tourism peak.
Instead of reinforcing an entire feeder immediately, a DSO could procure flexibility from batteries, EV fleets, industrial facilities or commercial buildings located behind the constraint. The value of such flexibility depends on geography and whether it sits on the correct side of a network bottleneck.
Flexibility markets therefore introduce a locational dimension to distribution-system economics. A megawatt located on the wrong side of a bottleneck may have limited value for solving the constraint.
Regulatory treatment and investment trade-offs
The expanding role of grid-enhancing technologies affects traditional approaches to network investment. Regulatory frameworks have historically favoured capital expenditure because utilities earn regulated returns on physical infrastructure.
Flexibility contracts, automation and software may be classified as operating expenditure even when they deliver lower total system cost. If regulators do not account for that difference, network operators have incentives to continue building physical assets.
A modern investment framework should compare the full economic cost of traditional reinforcement with alternatives such as dynamic line ratings, contracted flexibility, automation and advanced network operation. This framing is presented as necessary for evaluating different ways to relieve congestion.
Implications for renewable and industrial connections
The shift also has implications for renewable and industrial developers as grid connection capacity becomes increasingly scarce. Flexible connection agreements could allow projects to connect sooner if they accept limited restrictions during congestion periods.
A data centre could temporarily reduce non-essential loads, an EV depot could delay charging, and a battery could absorb local surplus generation. These arrangements are described as creating a middle ground between full firm access and rejection of a connection application.
The mechanism is also linked to assigning direct economic value to flexibility at the location where the network needs it most during constrained periods.
Effects on regional wholesale prices
Better utilisation of existing transmission infrastructure could reduce price separation between Southeast Europe and Central Europe during periods of network stress. It cannot eliminate structural bottlenecks, but it can affect how scarcity shows up in market outcomes.
ACER’s assessment that limited cross-border capacity contributed to higher price spikes in 2024 illustrates the link between network constraints and wholesale-market outcomes. Additional available capacity can reduce scarcity rents and change congestion revenues.
The impact extends to generator economics on either side of a transmission constraint. Grid-enhancing technologies are therefore described as influencing trading strategies, renewable capture prices, industrial electricity costs and the bankability of new energy projects.
A transmission corridor gaining several hundred megawatts of usable capacity can materially change cross-border price spreads without constructing additional towers. Market participants are expected to monitor operational grid technology deployment alongside new interconnectors and major transmission projects.
A layered future network model
Southeast Europe is still expected to require substantial investment in new electricity infrastructure. Dynamic line rating cannot address every bottleneck, while local flexibility cannot replace reinforcement where electricity demand grows permanently.
The future model is described as layered: building where capacity is structurally required, optimising existing infrastructure where operating limits are conservative, and procuring flexibility where constraints are temporary .
The most important transformation is described as institutional rather than technological . TSOs and DSOs are expected to become buyers of technology and flexibility services rather than relying primarily on physical infrastructure investment.
Regulators would need to recognise solutions delivering value through avoided congestion, improved asset utilisation and deferred capital expenditure. Customers including batteries, EV fleets and industrial facilities would increasingly be part of network planning rather than treated only as sources of demand or generation.
