Blog

The Single Day-Ahead Coupling area split its hourly units into 15-minute intervals for electricity trading. The change, affecting most European markets, is aimed at enhancing the integration of renewables by making flexibility and balancing more efficient.

After delays and intensive testing, the European wholesale electricity market switched to a 15-minute market time unit (MTU) from hourly blocks within the Single Day-Ahead Coupling (SDAC) mechanism. The transition was implemented across all bidding zones and bidding zone borders, according to the All NEMOs Committee, gathering nominated electricity market operators.

Thirty transmission system operators were involved in the move, aimed at creating an integrated pan-European cross-zonal day-ahead electricity market. Only Great Britain, Switzerland, the Western Balkans, Turkey and Cyprus, the European Union’s only non-interconnected member state, are outside of the SDAC region.

The first trading sessions were held at power exchanges yesterday, for delivery today. So far there were no indications of glitches with the quarter-hourly products.

A more than a year-long testing campaign for the 15-minute MTU solution included the validation of local, regional and cross-border functionalities, verification of connectivity between parties and confirmation of overall system readiness, the Market Coupling Steering Committee, MCSC, said last month.

Also of note, Cyprus launched its electricity exchange yesterday, with day-ahead, forward and balancing markets. In spot trading, the interval is 30 minutes.

Benefits from trading blocks with shorter intervals

The European Union is pushing the electricity market to improve efficiency by matching production and consumption more accurately. With the rising shares of solar and wind power in the energy mix, the frequency and intensity of fluctuations from weather changes are growing as well.

As the energy transition and digitalization progress, market time units could get shorter and shorter

The 15-minute interval captures the changes better than the one-hour block, reducing balancing needs and costs and freeing up capacity. As the energy transition and digitalization progress, market time units could get shorter and shorter. Importantly, it implies an exponential rise in computing power.

Wind and clouds aren’t very predictable, so unmatched production forecasts cause imbalances. It can burden the intraday market, where they are corrected. Shorter intervals lower the deviations.

Opportunity for battery storage deployment

With 15-minute products, more short-term fluctuations will already be captured in the day-ahead auction, Vattenfall said in a comment.

“Generation and demand can now be mapped much more precisely. We can submit more accurate forecasts, market renewables more effectively, deploy batteries and pumped storage more efficiently, and significantly increase system flexibility,” the company’s Head of Short-Term Asset Optimization Jörg Seidel pointed out.

Consumers could also benefit, according to the Swedish energy producer and supplier. More precise price signals open new savings potential through dynamic tariffs and smart meters, enabling households to use electricity when it is cheapest, it explained. It could make heat pumps, photovoltaic systems, batteries, and electric vehicle charging more efficient and affordable.

“Flexibility is becoming the currency of the energy transition,” Seidel stressed.

Nevertheless, nothing changes for small consumers including households until they get an electricity meter that can track quarter-hourly blocks.

With higher fluctuations in shorter intervals, opportunities arise for operators of battery energy storage systems (BESS) and other storage and balancing technologies, which stabilizes the electricity system. The switch to the 15-minute MTU is mostly beneficial for aggregators as well, reducing their exposure to penalties for failing to meet forecasted levels of production.