Europe coupled 15 countries' power auctions into one day-ahead price algorithm

For decades each European country ran its own day-ahead power auction and sold cross-border capacity separately. That split decision-making meant power often could not flow to where it was worth most, and interconnection capacity was used inefficiently.

Seven power exchanges built the Price Coupling of Regions (PCR) solution, and on 4 February 2014 the North-Western Europe and South-Western Europe projects switched on together. Four exchanges and thirteen TSOs began computing prices and net transfers in a single run of the Euphemia algorithm.

The coupled region stretched from France to Finland and covered about 75 percent of European electricity demand — more than 2,000 TWh — using what the exchanges call implicit allocation: interconnector capacity is allocated inside the auction, not sold separately beforehand.

Because one calculation sees all order books and all available transmission capacity, the market itself decides which countries export and import, and prices converge when capacity allows — the foundation of the EU's single day-ahead market.