20 years of power market integration in Europe: Similarities and Differences with the US markets

How did European markets move from separate energy auctions and cross-border capacity allocation toward coordinated market coupling?This chapter traces that evolution, and the limitations that prompted each successive step.

Europe did not move directly to a common market. Coordination developed progressively: capacity was first allocated separately from energy; implicit allocation later combined the two; and flow-based coupling introduced a richer representation of shared network constraints in the market-clearing process.

The chapter compares this zonal, centrally coupled model with independently cleared nodal markets in North America. It sets out how market structure, the information shared between operators, and the representation of network constraints affect the coordination choices available at a market seam.

This is the third chapter in a four-part series. The final chapter turns to the mechanics of capacity calculation and market coupling: how EUPHEMIA uses network information to allocate commercial exchanges, and how these mechanisms compare with the conditions at North American seams.