De Joode, J.; H.M. de Jong and L.J. de Vries: Congestion management in meshed gas networks: can the electricity market serve as an example?, Proceedings of the IAEE Annual International Energy Conference 2006 (Potsdam, Germany, 7-10 June 2006), IAEE, 2006, pp 1-17
As gas networks grow and become increasingly interconnected, a need for more sophisticated congestion management methods is emerging. This paper explores the applicability of congestion management methods that are used for electricity to natural gas transmission networks. We argue that current congestion management is inadequate and leads to suboptimal outcomes. We propose that market-based congestion management methods such as locational marginal pricing (LMP) or auctioning result in Pareto-optimal outcomes. Auctioning is easier to implement than LMP while reaching similar efficiency levels. With respect to the Dutch gas transmission network, auctioning of interconnector capacity with Germany as opposed to the current first come, first served regime results in an increase in Dutch consumer welfare.