Price Coupling of Regions (PCR) is a project standardizing IT solutions for the European day-ahead electricity market through developing a common trading algorithm - EUPHEMIA (acronym for Pan-European Hybrid Electricity Market Integration Algorithm) as well as the communication and data exchange system – PCR Matcher and Broker (PMB), used to calculate electricity prices in Europe. It aims to develop a uniform solution for price coupling, including the capacity of the respective network components, on a day-ahead basis. This is key to achieving the overarching EU objective to create a harmonised European electricity market. The PCR algorithm is now used virtually throughout the EU. The initiative was launched in 2009 and the PCR parties signed the Cooperation Agreement and the Co-Ownership Agreement in June 2012.
TGE and PCR
TGE has been the co-owner of the PCR project since October 2015. In November 2017, TGE obtained all the necessary acceptance certificates to become an exchange operator and coordinator under the PCR model. Thereby, the Exchange has enjoyed the right to actively participate in regional market projects and implementation of EU electricity market mechanisms.
How does PCR work?
The PCR is based on three fundamental principles: a common algorithm, reliability of operation and individual responsibility of each power exchange.
1. The common algorithm enables the determination of day-ahead electricity prices and net position of the bidding area in a fair and transparent manner across Europe. The algorithm has been developed taking into account the specificity of different electricity markets in Europe and the limitations of the electricity grid. It ensures optimised welfare growth and improved transparency.
2. The PCR process is based on decentralised data exchange, allowing its reliable and flexible operation.
3. The “PCR Matcher and Broker” service enables the exchange of anonymous orders and information about network congestion between power exchanges in order to calculate prices in the bidding zone and other reference prices and net positions of all included bidding zones.
The project is currently being operated by eight power exchanges: EPEX SPOT, GME, HenEx, EMCO, OMIE, OPCOM, OTE and TGE. The PCR mechanism is used in the following countries: Austria, Belgium, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Sweden and the United Kingdom (2019 data). The PCR project is open to further European power exchanges that wish to join.
Downloadable materials:
Intraday Market on the XBID Platform
The European Electricity Market on the XBID Platform was launched in June 2018. According to Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management, NEMOs and transmission network operators from the EU countries and Norway developed the MCO Plan, according to which, following the approval by all the European regulators, the XBID (Cross-Border Intraday) project was recognised as the intraday market coupling vehicle in the Member States and Norway.
XBID is a trading facility (central system) developed by Deutsche Boerse AG for the cross-border intraday market which communicates with local trading systems operating within Local Implementation Projects (LIP).
TGE and XBID
TGE has been involved in the project from the very beginning, even though it did not participate operationally in the launch of the XBID system in June 2018. Officially, the Exchange has been taking part in the project since the accession to the market agreements in June and July 2018. The Exchange also cooperates with stakeholders from neighbouring markets under the Local Implementation Projects – LIP 16 and LIP 15, which will ensure technical capabilities for TGE to join the XBID market in the second half of 2019.
In order to implement LIP 15 and LIP 16, it is necessary to implement local LTS software to ensure interoperability with the XBID system. In March 2019, TGE and Deutsche Boerse AG signed an agreement for the access to an application enabling the conclusion of transactions on the intraday electricity market according to the XBID model.
The XBID solution is based on a joint trading system provided with a Shared Order Book (SOB), Capacity Management Module (CMM) and Shipping Module (SM). XBID enables the matching of market participant’s orders under a continuous trading system with the orders placed in the same way by market participants in any other zone covered by the project, as long as transmission capacity is available. Ultimately, the integrated intraday market model will enable both explicit allocation (auction system) and continuous trading under an implicit allocation system.
Downloadable materials:
Single Intraday Coupling (XBID) Information Package (pdf).
Single Intraday Coupling (SIDC) (pdf).
Single Intraday Coupling (SIDC): Q&A (pdf).
Public Description of the Continuous Trading Matching Algorithm (pdf).