On Monday 27 May, the EU Agency for the Cooperation of Energy Regulators (ACER) published a study on the benefits of implementing co-optimisation in the ‘day-ahead’ coupling algorithm compared with the current design of the electricity market.
The study, commissioned in October 2023, supports the decision to modify the methodology of both the ‘price coupling’ algorithm and the ‘continuous trading matching’ algorithm.
ACER believes that the ‘day-ahead’ coupling algorithm needs to be modified to allow co-optimised allocation of cross-zonal capacity for balancing capacity exchange or reserve sharing.
The study also examines the benefits that can be achieved under an intermediate market design known as market-based allocation of cross-zonal capacity, which is already in use in the Nordic countries.
The main findings of the study point to potential annual savings for the EU of €1.3 billion through co-optimisation compared to the current market design, while the move to a market-based allocation process is expected to bring annual benefits of around €160 million.
Co-optimisation also improves system efficiency by accurately optimising fixed and variable costs, resulting in a better allocation of resources.
ACER has opened a public consultation for stakeholders to react to the results of the study until 19 June. The results of the consultation will guide the changes to the methodology, which will be finalised by early autumn.
To see the ACER publication: https://aeur.eu/f/ce5 (Original version in French by Pauline Denys)