Guidelines for explicit auctions

The auction system must be designed in such a way that all available capacity is being offered to the market. This may be done by organising a composite auction in which capacities are auctioned for differing durations and with different characteristics (e.g. with respect to the expected reliability of the available capacity in question). Total interconnection capacity shall be offered in a series of auctions, which, for instance, might be held on a yearly, monthly, weekly, daily or intra-daily basis, according to the needs of the markets involved. Each of these auctions shall allocate a prescribed fraction of the available transfer capacity plus any remaining capacity that was not allocated in previous auctions. The explicit auction procedures shall be prepared in close collaboration between the national regulatory authority and the TSO concerned and designed in such a way as to allow bidders to participate also in the daily sessions of any organised market (i.e. power exchange) in the countries involved. The power flows in both directions over congested tie lines shall in principle be netted in order to maximise the transport capacity in the direction of the congestion. However, the procedure for netting of flows shall comply with safe operation of the power system. In order to offer as much capacity to the market as possible, the financial risks related to the netting of flows, shall be attributed to those parties causing those risks to materialise. Any auction procedure adopted shall be capable of sending directional price signals to market participants. Transport in a direction against the dominant power flow relieves the congestion thus resulting in additional transport capacity over the congested tie line. In order not to risk creating or aggravating problems related to any dominant position of market participant(s), capping of the amount of capacity that can be bought/possessed/used by any single market participant in an auction shall be seriously considered by the competent regulatory authorities in the design of any auction mechanisms. To promote the creation of liquid electricity markets, capacity bought at an auction shall be freely tradeable until the TSO is notified that the capacity bought will be used.

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Source: EUR-Lex (Cellar) · retrieved 2026-11-01 · Text as adopted (Official Journal); later amendments are not incorporated in this text.