The EU energy agency ACER reported a success on November 4, 2026: The number of extreme price peaks for control energy above 7,500 euros or below minus 7,500 euros per megawatt hour has fallen by 95 percent compared to 2024. But while the authority is highlighting this development, the costs of intervening in the European power grid are rising massively. The so-called redispatch costs alone, which arise from shutting down and starting up power plants to eliminate network bottlenecks, increased by 41 percent to 5.22 billion euros in 2025. Because the European network operators had to redirect 32 percent more electricity generation than in the previous year. The EU is celebrating a decline in extreme price peaks, while the actual costs of dealing with network bottlenecks continue to rise.
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New trading rules reduce extreme price spikes for balancing energy
The European trading platform PICASSO is designed to offset short-term fluctuations between electricity generation and consumption. For instance, if a power plant goes offline, grid operators can procure additional electricity from neighboring countries. Thanks to unified trading rules and a new price calculation method, exceptional price surges have been significantly reduced. Furthermore, an increasing number of European grid operators are participating in this system.
However, this widely publicized success story only accounts for prices exceeding an exceptionally high threshold. Even prices as high as 5,000 or 6,000 euros per megawatt-hour fall outside this scope. Two incidents in October 2026 demonstrate that such spikes still occur: erroneous bids from Slovenia and Hungary caused prices to temporarily climb to over 6,850 euros and 5,000 euros, respectively. While these isolated cases do not indicate a general rise in prices, they do highlight the limited significance of the “95 percent” figure.
Costs for grid interventions are rising faster than the volumes of electricity affected
While extreme price spikes are becoming less frequent, grid operators are increasingly required to have electricity generated at different locations. According to ACER, the volume of these so-called “redispatch” measures rose from 46 terawatt-hours in 2024 to 60.8 terawatt-hours in 2025—an increase of 32 percent. At the same time, the associated costs climbed from 3.70 billion to 5.22 billion euros, a rise of 41 percent. Consequently, expenditures have grown at a faster rate than the volumes of electricity involved.
The primary reason for this is the limited transmission capacity of the power grids. For instance, when wind farms in the north generate large quantities of electricity, the power lines are not always able to transport that energy to where it is consumed. As a result, grid operators must curtail (scale down) certain facilities while ramping up other power plants in more suitable locations. This generates additional costs, even though, in principle, sufficient electricity could be produced. The situation becomes particularly problematic when grid bottlenecks necessitate increasingly extensive interventions.
Grid bottlenecks in Europe now incur costs of 5.4 billion euros
The total financial burden resulting from grid bottlenecks is even higher. According to ACER, the cost of managing these bottlenecks across Europe rose from 4.3 billion euros in 2024 to 5.4 billion euros in 2025—an increase of approximately 26 percent within a single year. This trend is also highlighted in recent reports by the Romanian energy portal InvesTenergy and the international news service MLex.
Another issue is the inadequate interconnection of national electricity markets. Under European regulations, at least 70 percent of relevant transmission capacity should be made available for cross-border electricity trading. However, many grid operators still fail to fully meet this requirement. As a result, it is not always possible to take advantage of cheaper electricity offers from neighboring countries. At the same time, price disparities between individual European electricity markets are widening.
Balancing energy becomes more efficient – but electricity consumers won’t necessarily benefit
The joint procurement of balancing energy certainly yields savings. ACER estimates the economic benefit of European balancing energy markets for 2025 at more than one billion euros. However, this does not automatically translate into a corresponding reduction in overall electricity grid costs. This is because balancing energy and “redispatch” serve different purposes: while balancing energy compensates for short-term fluctuations, redispatch addresses the risk of individual power lines becoming overloaded.
For households and businesses, what ultimately matters is the total cost burden, as the recognized expenditures of grid operators are passed on to electricity bills via grid charges. Therefore, the improvement in extreme price spikes reported by ACER is not, in itself, proof that electricity will become cheaper. The crucial factor would be whether the total costs for balancing energy and grid operations are also decreasing—a point that the “95 percent” metric fails to demonstrate. The EU can claim a technical success, even as the management of grid bottlenecks continues to incur billions in additional costs.
Author: Blackout News
Sources: ACER (04.11.26) – Montelnews (04.11.26)– Investenergy (04.11.26) – MLex (04.11.26)