Day-ahead market coupling

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Client

Consortium of European Power Exchanges.

Project

Design, development and industrialization of a Day-Ahead market coupling algorithm.

Context

The European power sector is undergoing major transformation. Under the impulse of the European Commission and the network operators (TSOs), the formerly national Power Exchanges are regrouping their activities in market coupling initiatives.

One such initiative was the Trilateral Market Coupling (TLC) involving Belgium, France and the Netherlands.

The TLC coupling mechanism was based on an algorithm that relied on the topographically linear structure of the network between those countries. However, the Power exchanges wanted to add Germany to the coupling, which is connected to both France and the Netherlands. This created a loop that the TLC algorithm was unable to handle.

Moreover, the TSOs wanted to use a new way of modeling the network, called flow-based calculation, which is closer to the physical reality of the exchanges. The TLC algorithm could not cope with this new model.

This type of application features demanding requirements:

  • High performance: first valid solution within seconds
  • Non-discrimination: neither between countries nor participants
  • Reproducibility: solutions must be unique and reproducible across runs
  • Future-proof: extensibility to new markets, products and network constraints
  • Robustness: running every day of the year

Solution

COSMOS fulfills all these requirements thanks to a generic approach strongly rooted in optimization theory:

  • High performance is achieved by leveraging our extensive knowledge of the problem into powerful search techniques
  • Non-discrimination is justified by the maximization of a widely agreed criterion: social welfare
  • Reproducibility is guaranteed by the complete determinism of the algorithm
  • Support of new requirements has been demonstrated by the successful integration of new products and network constraints
  • Robustness is enhanced by a dedicated hotline service

 

Benefits

Since 9th November 2010, COSMOS has delivered the benefits of market coupling (better economic efficiency, higher capacity utilization, lower volatility) to an area that already covers 40% of the European power load, without any incident so far.
COSMOS has also helped our clients establish their leadership through innovation. This has been demonstrated with the recent selection of COSMOS as the launch pad for the future pan-European coupling.

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