Counter-Intuitive Flows in European Day-Ahead Electricity Market Design: A Case Study of Slovenia

The European Day-Ahead Electricity Market incorporated in Single Day-Ahead Coupling (SDAC) plays a crucial role in ensuring efficient electricity allocation and pricing across the continent. This article delves into the intricate dynamics of market design, with a specific focus on the counter-intuitive flows observed within the context of Slovenia's electricity market. Counterintuitive flows in the European electricity market refer to situations where the direction of electricity flows does not align with conventional expectations, such as electricity flowing from bidding zone with lower price to bidding zone with higher price. These counterintuitive patterns can arise due to various factors, including market dynamics, regulatory constraints, infrastructure limitations, and unforeseen events. The study not only identifies these complexities but also undertakes a comparative analysis, examining occurrences of counter-intuitive flows before and after the Core Go-Live in June 2022, which marked the transition from the Available Transfer Capacity (ATC) model to the Flow-Based market coupling (FBMC) model. Slovenia's strategic geographical location at the crossroads of European energy networks exposes it to intricate interplays with neighboring countries. The study investigates how the transition to the Flow-Based model has influenced transmission constraints, market coupling mechanisms, and regulatory frameworks, providing insights into its impact on unexpected market dynamics, by comparing the historical results of Flow-Based market coupling with the alternative scenario where the old ATC model is still used.