European internal energy market

The European transmission system operators (TSOs) work closely together also to achieve the ambitious goal of the EU to create a European internal electricity market. As one of four German transmission system operators, 50Hertz is involved in several projects and initiatives, not least due to the central location of its grid area. The pan-European activities are coordinated by the European Network of Transmission System Operators for Electricity (ENTSO-E) in which 50Hertz is also active.

International transmission lines connect the transmission network of 50Hertz to the transmission grids of other countries. You can learn more about international interconnectors in operation and the latest developments of the projects for expansion and reconstruction here.

In order to ensure the efficient use and safe operation of the transmission system of 50Hertz as part of the European interconnected grid, the cross-border transmission capacities available for international electricity trading are determined according to the methodologies, that have been approved jointly by the respectively relevant national regulatory authorities (including the German regulatory authority Bundesnetzagentur) and made available to the market by way of a transparent and non-discriminatory capacity allocation process.

Legal basis for the international congestion management and the development of the EU internal electricity market is the Regulation (EU) 2019/943 on the internal electricity market of the EU's fourth energy package, which supplements the EU regulations of the third energy package that are currently being implemented.

Implementation of EU Regulations under the EU's Third Energy Package

Within the implementation of the two EU regulations CACM (Regulation (EU) 2015/1222) and FCA (Regulation (EU) 2016/1719), 50Hertz, together with the other European transmission system operators, intensively works on further development of the coordinated calculation and allocation of cross-border transfer capacities. In particular in the short-term timeframes (day-ahead and intraday), basic objective is the introduction of a flow-based capacity calculation and allocation procedure (Flow Based Market Coupling). In justified cases, it may be deviated from this approach in particular regions.

Objective of EU Regulation CACM is the coordination and harmonisation of the capacity calculation as well as allocation of capacity for the cross-border day-ahead and intraday markets. The Regulation also sets out requirements for TSOs regarding cooperation at regional level, at pan-European level and beyond bidding zone borders.

The capacity calculation should be coordinated at least at regional level in order to ensure a reliable capacity calculation and to ensure that optimum capacity is made available to the market. Therefore, a first step towards the implementation of EU Regulation CACM is the definition of the regions where such coordination is necessary. According to Article 2 of Regulation (EU) 2015/1222, these regions are defined as "Capacity Calculation Regions (CCR)" meaning "the geographical area in which a coordinated capacity calculation is applied". The CCRs have been defined on 17/11/2016 by the Agency for the Cooperation of Energy Regulatory Authorities (ACER) and published under this link.

You can find more detailed information on the activities in the individual CCRs on the corresponding websites of the European Network of Transmission System Operators for Electricity (ENTSO-E) under CCRs. 50Hertz is assigned to the CCR Core and the CCR Hansa.

Further methods resulting from the implementation of the two EU regulations CACM and FCA possibly requiring the approval of the Federal Network Agency that are to be published pursuant to Article 9 (14) CACM and Article 4 (13) FCA respectively can be found on the information platform of the four German TSOs under the heading "EU Network Codes" or on the websites of ENTSO-E to the respective EU regulations CACM and FCA.

Day-Ahead Market Coupling

To achieve the European Commission's goal of creating a European internal electricity market, the European Commission has introduced an integrated Price Coupling across Europe for day-ahead electricity trading – this is called the Single Day Ahead Coupling (SDAC).

Intraday Market Coupling

In order to create a European internal electricity intraday market, power exchanges and transmission system operators from twelve countries have launched an initiative called “XBID Market Project”. The purpose of the XBID Market Project is to enable continuous cross-border trade and to increase the efficiency of intraday trading in general through a single cross-border intraday market in Europe. The XBIB project is currently developing into the Single Intraday Coupling (SIDC).

Network Codes

The European Commission has undertaken to create an European electricity market for all of Europe. Prerequisite for efficient settlement of the growing electricity trade between EU member states is the establishment of binding rules for the entire EU. As a result of the third energy package of the EU and for the further elaboration of Regulation (EC) No 714/2009 on conditions for access to the network for cross-border electricity exchanges, these EU-wide rules have been implemented as so-called ‘Network Codes’ (also called guidelines). The Network Codes were issued by the European Commission as EU Regulations and are therefore legally binding requirements. The objective of the Network Codes is to create technical prerequisites for an efficient and open Euopean internal electricity market.

When it comes to the development of an integrated European internal electricity market 50Hertz closely cooperates with other European TSOs in various projects.

Concerning the implementation of the three Market Network Codes, 50Hertz is active in both the ‘Core’ and ‘Hansa’ Capacity Calculation Regions (CCR) and contributes to the projects IGCC, ‘PICASSO’ and ‘MARI’ for harmonisation of balancing processes across Europe.

Information on Core Flow-Based Market Coupling project

The parties of the project for flow-based market coupling in the capacity calculation region Core (Core FB MC) are currently in transition from internal to external parallel run. In the course of this, capacity and market data from technically representative days have been published on the associated project website at www.jao.eu since 16 November 2020.

In the next step, the external parallel run will be fully launched - probably in March 2021. The power exchanges and transmission system operators will then publish new data on the abovementioned project website on a daily basis. The external parallel run will continue until the project goes live in February 2022.

Other project milestones include the testing of SDAC procedures from September to October 2021 and the SDAC member testing from October till November 2021.

About the Day-Ahead Flow-Based Market Coupling project in the Core CCR

The Core Flow-Based Market Coupling (Core FB MC) project promotes the development and implementation of a flow-based day-ahead market coupling across the whole Core capacity calculation region (Core CCR) in the framework of the Single Day-Ahead Coupling (SDAC). The Core CCR consists of the bidding zone borders between the following EU Member States’ bidding zones: Austria, Belgium, Croatia, the Czech Republic, France, Germany, Hungary, Luxemburg, the Netherlands, Poland, Romania, Slovakia and Slovenia.

Core_FB MC_Announcement of progress of testing & Go Live date_January 2022.pdf

Core_Market_Communication_FB DA MC Go Live update_November 2021.pdf

Information_Invitation to Parallel Run workshop and update on the project roadmap

Information_Kickoff Core FB MC project

Information on 4M Market Coupling project

What is the main purpose of the project?

The aim of the Interim Coupling Project is to implement NTC-based day-ahead market coupling of the MRC area and 4MMC area via the respective Bidding Zone Borders: DE-CZ, DE-PL, PL-CZ, PL-SK, CZ-AT, AT-HU, and thereby creating the European Single Day-Ahead Market (SDAC). By the introduction of implicit allocation on the abovementioned Bidding Zone Borders, the two regions MRC and 4MMC merging into SDAC will be applying a single day-ahead allocation process.

The project is to be understood as an interim step towards the implementation of Flow-Based Market Coupling (FBMC) in the Core Region.

Find out more on the 4M MC project in the information material and press releases below:

Press_Release_Announcement_Go-live_ICP_June 2021.pdf

Joint press release_Interim Coupling_updated planning_May 2021.pdf

SDAC-ICP_webinar_joint_compiled_final_21 April 2021.pdf

Communication note_Registration_ICP webinar_April 2021.pdf

Communication note_Interim Coupling_Webinar_March 2021.pdf

Joint Press Release_Interim Coupling_Updated test planning_March 2021.pdf

Press Release_Interim Coupling_Start of testing_February 2021.pdf

Press Release_Interim Coupling_Project Status_November 2020.pdf

Press Release_Interim Coupling_Project Status_September 2020.pdf

4M MC_Information paper_March 2020.pdf

Press Release_Start of Implementation Phase.pdf

Press Release_Finalisation of High-Level Market Design.pdf

Market Coupling

Market coupling is the process for day-ahead or intraday coupling of bidding zones of one or several Nominated Electricity Market Operators (NEMOs), that are usually power exchanges, into a homogeneous market area. During market coupling, the offers submitted by the market participants to their relevant NEMO are netted by a standard IT-system considering the transmission capacities available between the bidding zones for the corresponding period. As a result, a convergence, or ideally a harmonisation of the electricity prices in the coupled bidding zones as well as an efficient use of the transmission capacities between the coupled bidding zones is achieved.

In case several NEMOs are active in a bidding zone, the processes and interfaces between the various NEMOs and the transmission system operator(s) in this bidding zone must be arranged separately in order to integrate this bidding zone into a market coupling. This is done via a "Multiple NEMO Arrangement" (MNA), which is to be developed jointly by the relevant NEMOs and the TSO(s) in accordance with the CACM Regulation. Further information on the MNA concluded for the bidding zone DE/LU can be found here (available in German only).

Current Status: Single Intraday Coupling

50Hertz is part of the Multi-Regional Coupling (MRC), a joint project of transmission system operators and power exchanges, which pursues the Europe-wide introduction of an integrated price coupling for the day-ahead market (“Single Day Ahead Coupling/SDAC”).

Next to this, a European cross-border intraday market coupling is currently being set up (Single Intraday coupling/SDIC) based on the XBID (cross-border intraday) project. This European project is set up in several regional sub-projects (Local Implementation Project). 50Hertz' borders to Eastern Europe are connected to the Single Intraday Market Coupling since November 2019.

Day-ahead and intraday

Day-ahead: in the context of electricity trading, day-ahead means the trade of electricity for the next day using the available transmission capacities. Electricity can be traded for individual or all 24 hours of the following day at any given time on any given day.

Intraday: this means the trading of electricity to be supplied on the day itself. In principle, this trading can take place both continuously and at different trading times, in each case using the available transmission capacity. Electricity can still be traded until shortly before the time of delivery.

CONTACT

Cornelius Heck

Head of System Operation Concepts and Analyses

Tel:

+49 30 5150-0
E-Mail:
info@50hertz.com