Ljubljana, 27 May 2024
ACER published today a consultancy study on the expected social welfare benefits of implementing co-optimisation in the day-ahead coupling algorithm as compared to the current electricity market design.
The study was commissioned in October 2023 to support the ongoing decision-making process on the amendment of the methodology for the price coupling algorithm and the continuous trading matching algorithm.
What is co-optimisation and why is it important?
Co-optimisation is the simultaneous allocation of cross-zonal capacity for both day-ahead energy and balancing capacity markets. This method ensures that capacity is allocated where it has the highest market value and thereby enables an efficient integration of balancing capacity markets.
What are the key findings of the study?
- Day-ahead energy and balancing capacity markets are strongly interdependent as they rely on the same generating units to operate.
- Co-optimisation could save the EU about €1.3 billion annually compared to the current market design, while market-based allocation is expected to provide annual benefits of around €160 million.
- The benefits of co-optimisation rise by 15% in a design where market participants are not required to forecast the day-ahead energy market outcome when bidding for balancing capacity.
Get involved!
ACER opens today a public consultation to collect stakeholders’ insights on the study’s findings. You have until 19 June 2024 to submit your views.
Register for ACER’s webinar on 10 June 2024 to learn about the main findings of the study.
The consultation and webinar outcomes will inform ACER’s decision-making on the proposed amendments to the methodology, which is scheduled to be finalised by early autumn 2024.