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European power market glossary

Every entry here is one we had to look up ourselves, get wrong, or explain to somebody. Where we have measured something, the number is in the entry rather than a definition of the definition.

Figures come from our own measurements on ENTSO-E and ČEPS data, stated with the period they were measured over.
Jump to
  1. The markets, in the order they happen
  2. Reserves and balancing
  3. Prices and why they behave oddly
  4. Zones, codes and paperwork
  5. Getting the data

The markets, in the order they happen

Electricity is traded several times over before it is delivered, and each round is a separate market with its own rules. Confusing them is the most common mistake in this field.

Day-ahead market

The main auction. Bids for every hour or quarter hour of tomorrow are collected until 12:00 CET, cleared at once across most of Europe, and published around 12:45–13:00. This single auction sets the reference price everyone else quotes. Roughly 80–90 % of European volume clears here. See today's prices for 38 zones.

SDAC — Single Day-Ahead Coupling

The mechanism that clears all those national day-ahead auctions together rather than one by one, allocating cross-border capacity in the same step. It is why prices in connected zones are identical whenever the interconnector between them has spare capacity — and diverge the moment it does not.

Intraday market and XBID

Continuous trading after the day-ahead auction, right up to shortly before delivery. XBID (Cross-Border Intraday) is the shared European order book: a buyer in one country matches a seller in another as long as capacity remains. Unlike the auction, there is no single price — every trade has its own.

Gate closure

The moment trading for a delivery period stops. Continuous intraday usually closes 5 minutes before delivery within a bidding zone and 60 minutes before at borders. A common and expensive mistake is to assume the local gate closure is the one that binds.

Balancing market

What happens after gate closure. The TSO buys or sells the difference between what was scheduled and what physically happened, using the reserves below. This is where the extremes live.

Reserves and balancing

FCR, aFRR, mFRR, RR

Four layers of reserve, each slower and cheaper than the one before. FCR stops a frequency deviation within 30 seconds. aFRR restores frequency automatically, fully within 5 minutes. mFRR is dispatched manually within 12.5 minutes to relieve aFRR. RR replaces the rest on a 30-minute horizon.

aFRR is not an emergency measure. In the Czech control area during August 2026 it was activated upward in 76.3 % of quarter hours and downward in 71.1 % — often both within the same quarter hour. The full numbers are on our aFRR and mFRR page.

PICASSO and MARI

The European platforms that clear balancing energy across borders: PICASSO for aFRR on a four-second cycle, MARI for mFRR as a quarter-hourly auction. The practical consequence is that your local activation price is set by the marginal bid across a coupled area, not by your own TSO.

Imbalance price

What a balance responsible party pays or receives for the difference between schedule and reality. Measured on 92 018 Czech quarter hours: median 103.6 EUR/MWh, but the range runs from −14 879 to +12 406, and a quarter of all quarter hours settle at exactly zero. Negative and above-500 prices are 18.6 % of quarter hours but 35.9 % of the total magnitudethe full analysis is on GitHub.

reBAP

The German imbalance price — regelzonenübergreifender einheitlicher Bilanzausgleichsenergiepreis, one price for all four German control areas. Published by Netztransparenz, and revised after the fact, which matters if you are building features from it.

Balance responsible party and balancing group

Every unit of electricity belongs to a balancing group with somebody responsible for keeping its schedule and reality close. In German, Bilanzkreis and Bilanzkreisverantwortlicher. Getting this wrong is not a modelling problem, it is a billing problem.

Prices and why they behave oddly

Merit order

Generation is dispatched cheapest first, and the price is set by the last unit needed — not by the average cost. This is why adding cheap renewables lowers the price for everybody, and why one expensive gas plant at the margin sets the price for the whole zone.

Negative electricity prices

Not an error. When wind and solar produce heavily into low demand, clearing below zero is cheaper than curtailing — producers with support schemes or slow ramping would rather pay than stop. The floor is −500 EUR/MWh in most zones. Across 12 zones since 2022, between 2 and 7 % of all points are negative; in Germany 4.8 %.

Curtailment

Deliberately reducing generation that could have run, usually because the grid cannot transport it. Compensation rules differ per country, which is why the same wind farm is worth different money on either side of a border.

Redispatch and congestion management

When the market result cannot physically flow, the TSO tells one plant to produce less and another more. It costs money, that money ends up in grid fees, and the volumes are published — often the clearest signal that a border is structurally tight.

Capacity market

A payment for being available, separate from any payment for energy delivered. A plant can earn from capacity for years and rarely run. Adding capacity revenue to energy revenue without checking which hours were actually called is the classic way to overstate a business case.

Zones, codes and paperwork

Bidding zone

The area within which electricity trades at one price with no internal transport limit assumed. Not a country: Sweden has four, Norway five, Italy six, Denmark two — and Germany, Austria and Luxembourg were one zone until 30 September 2018. Any series crossing that date needs two different codes.

EIC code

The identifier every European market API expects, like 10Y1001A1001A82H for Germany–Luxembourg. We keep a reference table and the same list as CSV and JSON.

Market coupling

Clearing several bidding zones in one calculation so that power flows from cheap to expensive until the interconnector fills. When you see two neighbouring zones at an identical price to the cent, that is coupling working; when they separate, the border is congested.

Guarantees of origin

Certificates proving a megawatt hour came from a renewable source, traded separately from the electricity itself. The same electron can be sold as grey power and its certificate to somebody else — which is why "100 % renewable" on a tariff says less than it sounds.

REMIT

The EU regulation requiring market participants to publish inside information — chiefly plant outages — before trading on it. In practice it is the reason outage data is public at all, and the fastest explanation for a price spike nobody saw coming.

Getting the data

Most terms above correspond to a published dataset. Where they come from, country by country, is in our ENTSO-E API guide and the market guides, and as an open list in awesome-european-energy-data.

One rule underlies half this page. For every series, know when it was published, not just what period it refers to. Imbalance prices, forecasts and outage messages are all revised after the fact. A model trained on the final value and presented as tradeable is not a model, it is hindsight.

Frequently asked questions

What is the difference between aFRR and mFRR?
aFRR is activated automatically by a signal from the TSO and delivered fully within about five minutes; mFRR is dispatched by a person and has up to 12.5 minutes. aFRR runs almost constantly — over 70 % of quarter hours in the Czech area — while mFRR relieves it.
What does reBAP stand for?
Regelzonenübergreifender einheitlicher Bilanzausgleichsenergiepreis: the single imbalance price applying across all four German control areas. It is published by Netztransparenz and revised after initial publication.
Why are electricity prices sometimes negative?
Because stopping generation can cost more than continuing. With high wind and solar output and low demand, the market clears below zero rather than curtailing. The floor is −500 EUR/MWh in most European zones.
What is the difference between SDAC and XBID?
SDAC is the day-ahead auction, cleared once a day across coupled zones at a single price per zone and hour. XBID is the continuous intraday order book that runs afterwards, where every trade has its own price.
Is a bidding zone the same as a country?
No. Sweden has four, Norway five, Italy six and Denmark two, while Germany and Luxembourg share one. Treating a country as a zone is the most common error in European power market analysis.

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Working with this data?

We build market data pipelines, dashboards and backtesting for European power markets. Tell us which market and what decision the tool has to support.

info@progrunners.com