EUPHEMIA (price coupling algorithm)
EUPHEMIA is the common price-coupling algorithm used by SDAC to clear the European day-ahead electricity market. It takes bids, offers, network capacities and constraints from NEMOs and TSOs, maximises social welfare and returns clearing prices, matched trades, scheduled exchanges and net positions for each bidding zone.
EUPHEMIA, the Pan-European Hybrid Electricity Market Integration Algorithm, is the common price-coupling algorithm used by SDAC to clear the European day-ahead electricity market. It takes bids, offers, network capacities and constraints from NEMOs and TSOs, maximises social welfare and returns clearing prices, matched trades, scheduled exchanges and net positions for each bidding zone.
What it optimises
The algorithm models the European day-ahead auction as a combinatorial optimisation problem. It must respect order types, price limits, network constraints and available cross-zonal capacity while maximising consumer surplus, producer surplus and congestion rent. That is why two zones with different bids can clear at the same price when interconnection is available, and split when the relevant border saturates.
Why it matters to Volton readers
Whenever an Estonian consumer sees tomorrow’s Nord Pool price, they are seeing an EUPHEMIA output. The algorithm does not forecast prices; it clears submitted orders under the capacity constraints supplied by TSOs. Forecasting tools, battery dispatch and retail price optimisation all sit downstream of that result.