ACER adopts a decision on the methodology to establish market coupling algorithms

The methodology covers the rules for development and maintenance of the price coupling algorithm for the day ahead timeframe and the continuous trading matching algorithm for intraday timeframe. It covers also the requirements that both algorithms must fulfil. The methodology was originally developed by all NEMOs and submitted for approval to regulatory authorities. The case was later referred to the Agency. The Agency introduced many amendments to the proposal in order to improve its legal clarity, but also to impose more concrete and legally enforceable requirements on NEMOs with regard to their obligations to develop the algorithms and with regard to the underlying rules for monitoring and changing the algorithms.

In January 2018, the Agency became competent to decide on the amended proposal from all NEMOs on the price coupling algorithm and the continuous trading matching algorithm. In May 2018, the Agency consulted all interested stakeholders on this issue.

All NEMOs submitted an amended proposal for the price coupling algorithm and the continuous trading matching algorithm methodology to all regulatory authorities, but they were not satisfied with the overall quality of the proposal and some proposed concepts and for this reason they referred it to the Agency for a decision.

The Agency amended the methodology in several instances where the methodology was not in line with the CACM Regulation, where it insufficiently described the requirements and functionalities of the algorithms or where it was not clear or sufficient with regard to monitoring, transparency and managing changes to the algorithms.

The most notable amendments to the methodology are related to:

• The improvements of the definitions and terms used;
• The clarification of the management of the algorithm performance with regard to the products and requirements;
• The introduction of explicit and shorter deadlines for the development of the algorithms;
• The clarification of the concepts of maximising economic welfare, scalability and repeatability of the algorithms;
• The transparency and monitoring of the performance of the algorithms by setting procedures, which require the NEMOs to publish various reports and information and to keep the algorithm performance within the required standards;
• The change management and decision-making processes to better reflect the cooperation of NEMOs with TSOs.

For more information, please see the Decision.