Core Flow-Based Market Coupling (Core FB MC)

The Core Flow-Based Market Coupling project, aiming at developing and implementing the daily operation of a Flow-Based (FB) day-ahead market coupling across the whole Core capacity calculation region (Core CCR) in the framework of the single day-ahead coupling (SDAC) has successfully gone live on 08/06/2022 for delivery day 09/06/2022.

This successful go-live is the result of the close cooperation between all involved NEMOs, TSOs and regulatory authorities.

In this context, as part of the Core FB MC project, also market coupling between Croatia and Hungary has been implemented, marking another major achievement in the completion of the European target model.

Furthermore, also a completely new interconnector and electricity border was implemented on the border of Slovenia and Hungary, which is now already part of Core Flow-based allocation and has gone live commercially at the beginning of July.

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.

Flow-Based Capacity Calculation Method

Flow-Based approach stands for a capacity calculation method in which the physical limits of the network are based on available margins on critical network elements (branches) and power transfer distribution factors which are defined for every critical branch and every bidding zone within Core CCR. These factors describe how a change in the net position (import or export) of each bidding zone changes the power flow at each critical branch. The computational algorithm then searches for the most optimal energy exchanges between bidding zones. In comparison with the current Net Transmission Capacity (NTC) method the FB method further improves economic welfare. The FB method is based on a more sophisticated manner by taking into account multiple parameters and optimization conditions and therefore better reflects realistic network conditions.

Flow-Based capacity calculation method is required by the Commission Regulation 2015/1222 establishing a guideline on capacity allocation and congestion management (Article 20) also called as CACM Regulation and represents the important part of the European target model.


History of the project

In May 2015 the transmission system operators in CWE region (including Belgium, France, Netherlands and German-Austrian- Luxembourgish bidding zone) successfully implemented the FB method.

In June 2016 the Core CCR was created based on the ACER decision 06/2016 on the electricity transmission system operators’ (TSO) proposal for the determination of capacity calculation regions.

In September 2017 Flow-Based Capacity Calculation Methodology developed jointly by all Core CCR TSOs was submitted to regulatory authorities (NRAs) for adoption based on the Article 20 of CACM regulation. In April 2018 the methodology was returned with a request for amendment. Two months later the TSOs resubmitted the methodology. Eventually, the NRAs did not reach a unanimous decision. The methodology was escalated to ACER and in the final form published in February 2019.

Several important milestones had to be reached before the Core Flow-Based Market Coupling go-live.

  • Finalization of the Market Design for Implementation - Document containing the description of the entire normal business process for coupling day-ahead markets including issues such as shipping arrangements, congestion income collection and aggregation, IT infrastructure and data communication, and so on
  • Procedures design – drafts of the normal, back-up, fallback and rollback procedures
  • Simulation and validation – tests performed in the test environment of the computational algorithm
  • External parallel run – real time testing by comparing the results of the current NTC calculation method and the FB method for a minimum period of six months
  • External implementation - design, development and implementation of local IT systems of individual project parties
  • Final market coupling testing – a lot of tests performed before go-live

In June 2022, the Core FB MC project has announced its successful go-live.

Parties currently directly involved in the Core FB MC project are listed in the following table and the links to the website of each party can be found below: