The Core Flow-Based Market Coupling project aims to develop and implement 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). In accordance with ACER Decision 06/2016, the Core CCR consists of bidding zone borders between the following EU Member States: Austria, Belgium, Croatia, the Czech Republic, France, Germany, Hungary, Luxemburg, the Netherlands, Poland, Romania, Slovakia and Slovenia.

Flow-Based Capacity Calculation Method

The Flow-Based approach represents 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 the 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. Compared to the current Net Transmission Capacity (NTC) method, the FB method further improves economic welfare and is more sophisticated, as it takes into account multiple parameters and optimization conditions and therefore better reflects actual network conditions.

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

History of the project

In May 2015, transmission system operators in the 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 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 Article 20 of the 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 was finally published in February 2019.

In April 2019, parties involved in the project successfully finalized the Market Design for Implementation, a document containing a 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.

There are several important milestones to be reached before the Core Flow-Based Market Coupling goes live:

• 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 period of six months,
• external implementation – design, development and implementation of local IT systems of individual project parties,
• final market coupling testing – various tests performed before go-live.

According to the up-to-date roadmap, the project parties expect to go live in Q2 2022.
Information on the project can also be found on the official section of the project, which is part of the JAO website here.
Recording of a webinar Introduction to Core Flow-based Market Coupling which took place on 22nd November 2021 can be found here.