Development of methodologies related to market coupling
Designation of Nominated Electricity Market Operators
What is it about?
Each Member State needs to ensure that at least one NEMO is designated to perform the single day-ahead and single intraday coupling. Each NEMO designated in the territory of one Member State has the right to provide its services in other Member States ('passporting').
Member States can refuse the trading services by a NEMO designated in another Member State only in exceptional and specific cases (Article 4(6)). The Member States have also the right to revoke the designation of a NEMO, in case it fails to comply with the criteria set in Article 6 of the CACM Regulation.
Legal basis: Article 4, 5 and 6 of the CACM Regulation
Current status: Access the list of currently designated NEMOs and where they provide services.
Market Coupling Operation plan
What is it about?
The Market Coupling Operation (MCO) plan sets out how all NEMOs jointly establish and perform the market coupling operator functions which include:
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developing and maintaining the algorithms, systems and procedures for single day-ahead and single intraday coupling;
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processing input data on cross-zonal capacity and allocation constraints provided by coordinated capacity calculators;
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operating the price coupling and continuous trading algorithms; and
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validating and sending single day-ahead and intraday coupling results to NEMOs.
The plan also covers the governance principles for performing the market coupling operator functions.
Legal basis: Article 7(3) of the CACM Regulation
Responsibility: all NEMOs
Current status: The MCO Plan was approved by all regulatory authorities in July 2017.
Implementation: The MCO Plan is implemented once all bidding zone borders in the internal energy market are participating in the single day-ahead coupling and single intraday coupling.
Read more on the latest approved MCO plan.
Documentation on the approval process of this methodology.
Single day-ahead and intraday coupling algorithms
What is it about?
The methodology establishes the requirements for the algorithms used in the day-ahead (price coupling algorithm) and intraday coupling (continuous trading matching algorithm and intraday auction algorithm), along with the criteria to fulfil them. The algorithms need to be scalable, repeatable and aim for maximum economic surplus. The methodology also ensures that any developments enable:
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efficient and timely implementation of the single European electricity market; and
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a close monitoring of the development and operations.
Legal basis: Article 37 of the CACM Regulation
Responsibility: all NEMOs
Current status: The algorithm methodology was approved by ACER in July 2018 and amended in January 2020. Another amendment to include co-optimisation is currently pending ACER’s approval and it is expected to be adopted in May 2024.
Implementation: The methodology has been largely implemented. Implementation of certain functionalities is still pending.
Read more on the latest approved algorithm methodology.
Documentation on the approval process of this methodology.
Single day-ahead and intraday coupling products
What is it about?
The terms and conditions list all products that can be used in the day-ahead and intraday coupling and splits them into two categories: mandatory and optional.
Legal basis: Article 40 (day-ahead) and Article 53 (intraday) of the CACM Regulation
Responsibility: all NEMOs
Current status: The terms and conditions were approved by all regulatory authorities in 2018 and their amendment were approved by ACER in January 2020.
Implementation: The terms and conditions are implemented.
Read more on the latest approved products terms and conditions.
Documentation on the approval process of this methodology.
Minimum and maximum prices
What is it about?
The terms and conditions set out the harmonised maximum and minimum clearing prices to be applied in the market coupling. They are subject to the application of an automatic adjustment mechanism. This mechanism ensures that an increment to the original maximum price is added if the clearing prices in the day-ahead or intraday coupling nearly reach its maximum limit.
Legal basis: Article 41 (day-ahead) and Article 54 (intraday) of the CACM Regulation
Responsibility: all NEMOs
Current status: The terms and conditions on minimum and maximum prices were approved by ACER in November 2017.
Implementation: The terms and conditions are implemented.
Read more on the latest approved terms and conditions on minimum and maximum prices.
Documentation on the approval process of this methodology.
Back-up methodology
What is it about?
All NEMOs are responsible for establishing, together with the relevant TSOs, the backup procedures for national or regional market operation in case no results are available from the market coupling operation functions.
The methodology ensures a back-up in operating the MCO functions, in case the responsible NEMO is unable to do so. This methodology takes into account the fallback methodology under the CACM Regulation.
Legal basis: Article 36 of the CACM Regulation
Responsibility: all NEMOs (in cooperation with all TSOs)
Current status: The back-up methodology was approved by all regulatory authorities in March 2019.
Implementation: The methodology is implemented.
Read more on the latest approved back-up methodology.
Documentation on the approval process of this methodology.
Intraday cross-zonal gate opening and closure time
What is it about?
The terms and conditions determine the intraday cross-zonal gate opening (point in time when cross-zonal capacity between bidding zones is released) and closure time (where cross-zonal capacity allocation is no longer permitted).
The intraday cross-zonal gate opening time has been set to 15:00 market time day-ahead.
The intraday cross-zonal gate closure time has been set to 60 minutes before the start of the relevant intraday market time unit on a bidding zone border.
Legal basis: Article 59 of the CACM Regulation
Responsibility: all TSOs
Current status: The terms and conditions were approved by ACER in April 2018.
Implementation: The terms and conditions are implemented in all capacity calculation regions.
Documentation on the approval process of this methodology.
Intraday capacity pricing
What is it about?
The pricing mechanism for cross-zonal capacity in the intraday timeframe should be based on intraday auctions. These auctions are part of the single intraday coupling and complement continuous trading, where the available cross-zonal capacity is allocated at a zero price on a first come first serve basis.
The methodology ensures cross-zonal capacity is not allocated to the intraday auctions and the continuous trading at the same time.
Legal basis: Article 55 of the CACM Regulation
Responsibility: all TSOs
Current status: The methodology was approved by ACER in January 2019.
Implementation: The methodology is implemented through the amendments of the algorithm methodology, which introduces intraday auctions as the tool for pricing intraday capacity. The algorithm methodology sets out the implementation of the intraday auctions to the beginning of 2023.
Read more on the latest approved methodology for pricing intraday cross-zonal capacity.
Documentation on the approval process of this methodology.
Day-ahead firmness deadline
What is it about?
The day-ahead firmness deadline methodology defines the deadline after which cross-zonal capacity for the day-ahead allocation becomes firm. The day-ahead firmness deadline is set to 60 minutes before the day-ahead market gate closure time.
Legal basis: Article 69 of the CACM Regulation
Responsibility: all TSOs
Current status: The methodology was approved by all regulatory authorities in July 2017.
Implementation: The methodology is implemented.
Read more on the latest approved day-ahead firmness deadline methodology.
Documentation on the approval process of this methodology.
Complementary regional auctions
What is it about?
These provisions allow for the implementation of complementary regional intraday auctions within or between bidding zones in addition to the single intraday coupling solution if they do not have an adverse impact on the single intraday coupling. TSOs and NEMOs need to establish the methodology to be approved by the relevant regulatory authorities. Their application shall be reviewed at least every two years.
Legal basis: Article 63 of the CACM Regulation
Responsibility: relevant NEMOs and TSOs
Current status: The complementary regional intraday auctions were approved for the bidding zone border between Spain and Portugal and Italy North and Italy-Greece biding zone borders.
Implementation: The complementary regional intraday auctions are partially implemented (see above).
Read more on the latest approved methodologies for complementary regional intraday auctions.
Fallback procedures
What is it about?
The fallback procedures ensure efficient, transparent and non-discriminatory capacity allocation in case the single day-ahead coupling process is unable to produce results. Different regions have different fallback solutions in place.
Legal basis: Article 44 of the CACM Regulation
Responsibility: all TSOs in each capacity calculation region
Current status: The fallback procedures were approved in all regions. Some regions also approved amendments.
Implementation: The fallback procedures are implemented in all regions.
Documentation on the approval processes of the fallback methodologies.
Calculation of scheduled exchanges
What is it about?
Scheduled exchanges are electricity transfers scheduled between geographic areas for each market time unit and for a given direction. The scheduled exchanges between bidding zones, scheduling areas and NEMO trading hubs are calculated by using the net positions and clearing prices of bidding zones (as outputs of the day-ahead and intraday algorithms)
Legal basis: Article 43 (day-ahead) and Article 56 (intraday) of the CACM Regulation
Responsibility: all TSOs
Current status: The methodology for the day-ahead timeframe was approved by all regulatory authorities in March 2019. The methodology for the intraday timeframe was approved by all regulatory authorities in June 2019.
Implementation: The scheduled exchange methodologies are implemented.
Read more on the latest approved scheduled exchange methodologies.
Documentation on the approval process of these methodologies.
Congestion income distribution
What is it about?
The congestion income distribution methodology establishes the rules for collecting and distributing the congestion income on the bidding zone borders within capacity calculation regions from the day-ahead market and for distributing it among the TSOs having interconnectors on that border.
Legal basis: Article 73 of the CACM Regulation
Responsibility: all TSOs
Current status: The latest amendments to the methodology were approved by ACER in 2022.
Implementation: The implementation is linked to the implementation of the capacity calculation methodology within their respective capacity calculation region, so different regions have different implementation timelines.
Read more on the latest approved congestion income distribution methodology.