What Is Volume Allocation?
Volume Allocation is a backup service used when a NEMO in the CORE MNA region becomes decoupled from Single Day-Ahead Coupling (SDAC), the main European market coupling (Partial Decoupling in a CORE MNA area - further information can be found in the SDAC Fallback Manual. Its purpose is to ensure just one consistent electricity price in a Bidding Zone.
Why Is It Important?
In normal conditions, European electricity markets use SDAC to align prices across countries. If CORE MNA region decouples due to technical or market issues, this alignment breaks, and prices could vary by zone. Volume Allocation prevents this by applying SDAC prices and maintaining fairness for all customers.
How It Works?
- Activated when a NEMO in the CORE MNA region is decoupled (Partial Decoupling).
- Uses SDAC Day-ahead prices as fixed input and enables Buy and Sell Volume Allocation requests to be executed at these known SDAC prices.
- The allocation is based on customers’ existing, updated or new Volume Allocation requests.
- Volumes are distributed according to these orders.
- If a bidding zone has an imbalance in Buy and Sell volumes in an MTU, it is curtailed because cross-border flows are not available (no price risk, but volume risk).
What It Means for Customers
- Customers get the same SDAC-based price during disruptions if volume match.
- Customers' existing curve orders are applied automatically as Volume Allocation requests unless customers choose to update or cancel them.
- New Volume Allocation Requests can be entered.
- Any curtailment follows clear rules, for example: 100MW Buy and 50 MW Sell leads to the fact that only 50MW will be executed, meaning curtailment of 50% on the Buy side.