The European day-ahead market (SDAC) is making the long-awaited move to 15-minute market time unit (MTU) on the trading day of September 30, 2025, for the delivery of electricity on October 1, 2025. This move allows the harmonization with other markets such as intra-day continuous (SIDC) and intra-day auctions (SIDC/IDA), which already moved to 15-minute time-resolution in June 2024, and balancing markets with a 15-minute imbalance settlement period (ISP). Altogether, this ensures that renewables with fluctuating production within an hour can be better integrated into the market.
The introduction of 15-minute MTU does not mean that other time resolutions will disappear in all bidding zones. Instead, different time-resolutions can co-exist and are coupled by Euphemia, the market coupling mechanism in SDAC. This means that in a bidding zone, there can be 15-minute, 30-minute, and 60-minute time resolutions in parallel, and Euphemia ensures that there is no possibility for arbitrage between time periods. The same applies for cross-zonal interconnectors: Euphemia supports multiple time resolutions. Figure 1 below shows which time resolutions will be offered by which NEMO in which bidding zone. As can be seen, all bidding zones (with the exception of Ireland and Northern Ireland) will switch to 15-minute MTU, and in most bidding zones, multiple time resolutions will be available to market participants. These changes expand the number of periods managed by Euphemia from 24 hourly periods to a total of 168 periods, now including 48 half-hourly and 96 quarter-hourly periods. But not only does the number of time periods increases, but the same applies to the number of orders placed by market participants. All this leads to a tremendous increase in complexity, which has been tackled by N-SIDE in the Euphemia Lab. In the next sections, we will see how the market rules have been adapted to address the matching of orders across time resolutions.
When allowing multiple time-resolutions in a bidding zone in parallel (for instance, 15-minute, 30-minute, and 60-minute), the prices have to be set in an optimal way that avoids arbitrage between time resolution. Therefore, buying 10 MW at hourly time-resolution and selling 10 MW at the half-hourly child-periods should not result in any profit or loss. The constraint for coupling the periods is the average rule. The average rule stipulates that the price at a parent period should be the average price of the child periods at market time unit.
Example of average rule:
The example provided below shows a single bidding zone permitting bids at 30-minute (top) and 60-minute (bottom) time resolutions. It is assumed that all bids submitted at the 30-minute interval represent supply, which exhibits greater fluctuation within an hour, whereas all bids at the 60-minute interval constitute demand. In the first half-hour, 200 MW are offered at a price of 120 EUR/MWh (order S1), in the second half-hour, 400 MW are offered at a price of 50 EUR/MWh (order S2), and in the hour, 300 MW are requested at a price of 100 EUR/MWh (order D1).
Figure 3 - slide deck, N-SIDE, Sep 05, 2025, internal document.
If we want to optimally match supply and demand, we have to accept 200 MW of each of the offers. Market rules require that a period order that is partially accepted sets the market clearing price (MCP) in its period; if the market clearing price is not equal to the order price, the order should be either fully accepted or fully rejected, but not partially accepted. Thus, we know that the MCP in the second half-hour is 50 EUR/MWh and the hourly MCP is 100 EUR/MWh. The average rule now enforces that the MCP in the first half-hour is 150 EUR/MWh.
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Average rule: 100 EUR/MWh = ½ (MCP(HH1) + 50 EUR/MWh) |
We can also test that this indeed avoids arbitrage and balances the monetary payments.
Order D1 pays 200 MWh * 100 EUR/MWh = 20,000 EUR. Order D1 and D2 receive 100 MWh * 150 EUR/MWh + 100 MWh * 50 EUR/MWh = 20,000 EUR.
Hence, there exists neither missing nor extra money leftover at the clearing house which is perfectly balanced.
While block orders and complex orders could be subject to paradoxical rejection already in the past, the same did not apply to curves. Paradoxical rejection refers to a situation where an order that is in-the-money (a supply order with a price below MCP or a demand order with a price above MCP) is either completely rejected or accepted only partially. With the introduction of multiple time resolutions in a single bidding zone, this can also occur to period orders which are not defined at the MTU of the bidding zone (e.g., 60-minute orders in a 15-minute bidding zone). However, this is limited to special situations related to price capping when the MCP falls outside of the admissible price range, and has to be capped to match the price bound. The current admissible price range in SDAC is [-500; 4000]€/MWh.
Example of paradoxical rejection of curves:
Let us assume the same example from above, with the price of the hourly demand changed from 100 EUR/MWh to 3500 EUR/MWh. The average rule then implies that the price in the first half-hour MCP(HH1) = 6950 EUR/MWh since 3500 = ½ (50 + 6950). This price is above the price cap of 4000 EUR/MWh, and we thus have to reduce the MCP in the first half-hour to 4000 EUR/MWh. However, reducing the price would violate the average rule and allow arbitrage between time resolutions. To fix this, we have to reapply the average, starting from the finest time resolution, which leads to an hourly market price of 2025 EUR/MWh as 2025 = ½ (50 + 4000). Note that the hourly demand is not setting the price as required in the example above. The hourly demand is partially paradoxically rejected as it is in-the-money but is not fully accepted.
Such paradoxical rejection of curves can only happen at coarser time-resolutions, but never at curves at the MTU of the bidding zone: these curves at coarser time resolutions act in a way like blocks as they couple multiple periods. It can be shown that this is something that cannot be avoided, as it is impossible to have price caps, financial balance, and all curves being neither paradoxically accepted nor rejected at the same time.
The implementation of 15-minute represents a significant milestone in the evolution of SDAC, requiring considerable R&D efforts focused on improving performance and refining market design over the past year. These efforts have been undertaken by N-SIDE within the Euphemia Lab. Also, the time window for the Euphemia computations has been increased from 17’ to 30-minute to maintain the incredible robustness of the European day-ahead market.
Introducing 15-minute MTU in SDAC allows market participants to better express sub-hourly fluctuations, which is increasingly important due to the rise of renewable energy. This change will also enable SDAC to operate at the same time-resolution as other markets, like intraday. While a significant amount of work by NEMOs, TSOs, and N-SIDE was needed to implement the required changes, Euphemia, the market coupling mechanism in SDAC, is ready for 15-minute MTU in SDAC, a change that Euphemia performed last year for the European intraday auctions (SIDC/IDA).