Energy Business Motion

Intraday auction market

1. History of the project

After the approval of the Third Energy Package, and with the higher percentages of the renewable electricity production, the introduction of Intraday Market Coupling became more urgent. To decrease the balancing energy consumption it is important to provide solutions for traders to trade electricity as close to real time as possible. In June 2014, six power exchanges (APX, BELPEX, EPEX SPOT, GME, Nord Pool, OMIE) agreed to establish the Intraday Market Coupling to which relevant TSOs joined later. This cooperation became known as XBID (Cross Border Intraday). After the approval of the MCO Plan (Market Coupling Operator Plan), the XBID project was recognized as the European target model of the Single Intraday Coupling (SIDC). According to the model, all NEMOs need to take part in this cooperation. SIDC has been expanded in several phases, referred to as “waves”. HUPX- joined to SIDC in November 2019 during 2nd wave.

An integrated intraday electricity market is promoting effective competition and pricing, increases liquidity and enables a more efficient utilisation of the generation resources across Europe. Being balanced on the network closer to delivery time is beneficial for market participants and for the power systems by reducing the need of reserves and associated balance energy costs eventually paid by end consumers.

Pricing the intraday capacity, i.e. Intraday Auction (IDA) is part of the Single Intraday Market Coupling (SIDC) and it completes the SIDC market which is currently based on continuous trading method.

The main goal of IDA project is the implementation of IDA in the EU as well as in Hungary, which is required by Article 55 of Commission Regulation (EU) 2015/1222 CACM under “Intra-day capacity pricing”. The aim of the methodology is to price the scarce of cross-border capacities, which cannot be realized in continuous trading. It also further strengthens the competitiveness of EU electricity markets concerning the electricity producing, trading and supply (CACM Regulation 3 (a)), taking into account the importance of creating a level playing field for market participants in intra-day markets. Effective competition can be achieved by creating a single cross-zonal intraday auction market.

2. Design

The IDAs shall be organized as implicit auctions where collected orders shall be matched and cross-zonal capacity shall be allocated simultaneously for different bidding zones. IDAs shall take into account all valid orders submitted for the respective auctions and determine a clearing price for the relevant bidding zones based on matched orders.

Cross-zonal capacities cannot be allocated simultaneously on IDA and during continuous trading. Therefore cross-zonal capacity allocation within the continuous SIDC shall be suspended for a limited period during which the cross-zonal capacities shall not be allocated through the continuous SIDC.

3 IDA shall be held:

  • One IDA shall be held on the day D-1 for all MTUs of the delivery day D, i.e. from the first auction MTU starting at 00:00 until the end of the delivery day D, with a deadline for bid submission at 15:00 market time D-1.
  • One IDA shall be held on the day D-1 for all MTUs of the delivery day D, i.e. from the first auction MTU starting at 00:00 until the end of the delivery day D, with a deadline for bid submission at 22:00 market time D-1.
  • One IDA shall be held on the delivery day D for all remaining MTUs of the delivery day D, i.e. from the first auction MTU starting at 12:00 until the end of the delivery day D, with a deadline for bid submission at 10:00 market time D.

Trading will be available only on 15 min Market Time Unit (MTU) on HUPX IDA market, however there will be some bidding zones which will remain in 30 or 60 min MTU.

In order to allow orders from different bidding zones to match each other, a Cross Product Matching (CPM) solution will be implemented in the European auction matching algorithm (Euphemia) – enabling for example 60min contracts in PL to match with (sets of four) 15min contracts in HU.

A new interface named IDA Central Interface Point (IDA CIP) is developed to establish connection between the auction algorithm and the continuous trading algorithm.

XBID is used as source of network constraints data for IDA and to validate the IDA results in terms of capacity meet the network constraints. Network data are provided via NEMOs to EUPHEMIA (auction algorithm). IDA results are submitted to XBID to update the information about Already Allocated Capacity in XBID and to reflect in relevant CMM files the existence of capacity reserved for IDA results.

The cross-zonal capacity allocation of the SIDC Continuous markets will be halted between all SIDC bidding zones during two time laps of 20min before, and 20min after, the gate closure time of each intraday auction (subject to final confirmation of timings after operational tests). During this time, the cross border capacity displayed in the M7 Hub-to-Hub matrix will be set automatically to 0. All active orders submitted before the cross-zonal capacity allocation halt period will remain active on M7 screen under their “_XB” contract name, unless they have been hibernated or cancelled by the trading member during this market coupling halt period. During IDA halt local intraday market will be available.

For IDA1 the available capacities will be the remaining capacities from DAM due to lack of time between the auctions. For IDA2 and IDA3 intraday capacities will be recalculated.

In normal conditions, the Final Market Results will be published 20 minutes after the Orderbook Gate Closure Time. No Second Auction procedure will be performed.

In case one of NEMOs has issue, IDA for HUPX (and for most of the NEMOs) will be stopped. Local continuous market will be available until capacities are released. No partial coupling in the region is possible only for OMIE, GME and HENEX.

API option will be available for Market Participants on IDA market from go-live date.

Among the expected benefits of the IDA project, in addition to fulfilling the legal requirements, is the more efficient allocation of the limited cross-border capacities, as well as there will be more opportunities for market participants for intraday cross-border trading. IDA will bring additional balancing opportunities for market participants, closer to delivery and with finer contracts granularity.