PC_2024_E_01 - Public consultation on amending the electricity price coupling algorithm methodology

What is it about?

On 24 November 2023, ACER received a proposal from all Nominated Electricity Market Operators (NEMOs) for amending the methodology for the price coupling algorithm and the continuous trading matching algorithm.

What is the methodology about?

The methodology sets the regulatory framework for the algorithms used for matching bids from market participants for day-ahead and/or balancing capacity and allocating cross-zonal capacities more efficiently in the European day-ahead and intraday electricity markets. The European day-ahead electricity market is based on an implicit auction, whereas the intraday market currently relies only on continuous trading. However, intraday auctions are expected to be introduced in 2024.

Thanks to a coordinated calculation of prices and flows, which is referred to as market coupling, available cross-zonal capacity is used more efficiently and price differences are reduced.

The current methodology was approved by ACER in July 2018 and amended in January 2020.

Update as of 13 February: the public consultation's original deadline of 15 February has been extended to 20 February. 

Amending the methodology, in particular the day-ahead coupling algorithm, is needed to enable “co-optimisation”. By allocating cross-zonal capacity where its market value is the highest (either to the day-ahead market or to the balancing capacity markets), co-optimisation facilitates the integration of the balancing capacity markets and allows for a more efficient use of cross-zonal capacity.

With this consultation, ACER aims to seek inputs on:

• further research and development activities on the remaining elements needed to enable the implementation of co-optimisation;

• the design of bids and specific market products that would allow the interactions between day-ahead market and balancing capacity markets to be captured; and

• the expected benefits of co-optimisation compared to the current market design.

Privacy statement.

Consultation's questions.

NEMOs' proposal:

• Explanatory note

• Algorithm methodology (clean) (tracked changes)

• Annex 1 - Common set of requirements for day-ahead (clean) 

• Annex 2 - Common set of requirements for intraday (clean) (tracked changes)

• Annex 3 - Algorithm monitoring methodology for day-ahead (clean) (tracked changes)

• Appendix 1 - List of NEMOs and TSOs

On 1 February 2024, ACER is organising a workshop (for technical experts) to present the main elements of its public consultation and answer any clarification questions from stakeholders on the content of the consultation.

ACER initially planned to decide on the matter by 24 May 2024, but will now decide by early autumn 2024 to incorporate stakeholders' views on the findings of the consultancy study.

Update as of 24 September: with its Decision 11-2024, ACER adopted the amended methodology.