ACER Consults On Amending The Electricity Price Coupling Algorithm Methodology

Today ACER opens its public consultation on amending the electricity price coupling algorithm methodology. The consultation runs from 18 January until 15 February 2024.

What is the methodology about?

On 24 November 2023, ACER received a proposal from all Nominated Electricity Market Operators (NEMOs) to amend the methodology for the price coupling algorithm and the continuous trading matching algorithm. 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 effectively in the European day-ahead and intraday electricity markets.

Why we are consulting?

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 electricity capacity.

With this consultation, ACER is seeking input 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.

What are the next steps?

On 1 February 2024, ACER will host a public 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. Register here for the event.

ACER expects to reach a decision by 24 May 2024.