Making Market History: Multi Regional Coupling Decouples

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Making Market History: Multi Regional Coupling Decouples


Friday 7 June witnessed a major pan-European power market event when Multi Regional Coupling, or MRC, decoupled for the first time.

MRC, which is managed by exchanges EPEX SPOT and NordPool, is a project for pan-European Day-Ahead Coupling which currently covers 19 countries and represents over 85% of Europe’s electricity consumption. Since its introduction five years ago, MRC (formerly NWE), had operated successfully using the EUPHEMIA algorithm to schedule cross-border flows.

Under MRC, market players do not actually receive allocations of cross-border capacity themselves, but instead bid for energy on their local exchange. These exchanges then use the available cross-border transmission capacity to minimise the price difference between its local area and those adjacent to it. This theoretically maximises Europe-wide social welfare.

At 10:39 local time on 7 June, EPEX SPOT experienced a technical issue with its ETS auction system: a corrupt order was somehow entered by a market participant, locking the system up. After restarting the system, the same corrupt order was again unintentionally introduced. This led to several further crashes and delayed the whole EPEX SPOT order book submission beyond the crucial 11:40 deadline. In line with Price Coupling of Regions procedure, EPEX SPOT declared partial market decoupling at 11:49, but because of the pan-European reach of EPEX SPOT it almost felt like total decoupling. The following markets were decoupled from MRC;

  • France to: Belgium, Germany and Spain;
  • Germany to: Austria, Denmark, France, the Netherlands and Sweden;
  • Great Britain to: Belgium, France, SEM and the Netherlands;
  • Great Britain’s two hubs;
  • Italy to: Austria and France;
  • The Netherlands to Belgium, Germany, Great Britain and Norway
  • Slovenia to Austria
  • Spain to France
  • Sweden to Germany

At this point interconnector operators were supposed to make capacity available explicitly to participants through hastily prepared auctions. IFA (GB-FR) did this in the day-ahead market, Britned (GB-NL) made it available intraday, but EWIC and Moyle have lacked this capability since I-SEM go-live in October last year and did not.

EPEX SPOT deployed a fix to ensure the local auctions could be run, but this led to a subsequent issue with the calculation and publication of erroneous market results on the EPEX SPOT website which were cancelled and recalculated. The erroneous market results caused swings in prices:

  • Belgian Day-Ahead prices went negative (see Graph 1.); and
  • The GB auction split into two difference clearing prices, one on NordPool and one on EPEX which were wildly different (Graph 2).

Belgium Day-Ahead Market Power Prices

Graph 1: Belgium Day-Ahead Market Power Prices


In the Single Electricity Market fall-back processes kicked in. The local Day-Ahead Market was employed, but as Ireland was decoupled from the GB auction the capacity available on the East West interconnector and the Moyle interconnector was not used by the EUPHEMIA algorithm. This capacity later appeared in the intraday auctions.

We are told that the Joint Steering Committee is looking into these events.


GB Auction Price Splitting

Graph 2: GB Auction Price Splitting