Since electricity needs to be transported over networks, non-discriminatory access to the networks and cross-border trade over interconnections between control areas is a vital precondition for establishing a competitive Internal Energy Market in the EU. As interconnection capacity is often scarce and it is not always feasible to accommodate the physical flows resulting from commercial transactions, the functioning of electricity markets is strongly dependent on how interconnection capacity is allocated and how congestion in the networks is managed.

Although Regulation (EC) No 1228/2003 (First Regulation) and the annexed Congestion Management Guidelines 770/2006/EC (First CM Guidelines) contributed significantly to improved Capacity Allocation and Congestion Management, the integration of national markets by means of efficient and effective use of interconnection capacity has not been fully achieved.

The 3rd Package defines a new European regulatory framework with Framework Guidelines and related codes to address certain topic areas for the integration of EU electricity and gas markets, enabling cross-border trade and competition to develop across EU energy markets. In this context, the Agency has, in accordance with Article 6 (2) of Regulation (EC) No. 714/2009, to submit to the Commission Framework Guidelines on Capacity Allocation and Congestion Management by 31 July 2011.