Price Coupling of Regions (PCR)
Price Coupling of Regions (PCR) is the European power exchanges’ project to develop a single price coupling solution to calculate electricity prices across Europe respecting the capacity of the relevant network elements on a day-ahead basis.
This is crucial in order to achieve the overall EU target of a harmonised European electricity market. The integrated European electricity market is expected to increase liquidity, efficiency and social welfare. PCR is open to other European power exchanges wishing to join.
What is PCR?
PCR is based on three main principles: a single algorithm, robust operation and individual power exchange accountability.
- The common algorithm gives a fair and transparent determination of day-ahead electricity prices and a net position of a bidding area across Europe. The algorithm is developed respecting the specific features of the various power markets across Europe and the electricity network constrains. It optimises the overall welfare and increase transparency.
- The PCR process is based on decentralised sharing of data, providing a robust and resilient operation.
- The PCR Matcher and Broker service enables exchange of anonymised orders and electricity network constraints among the power exchanges to calculate bidding zone prices and other reference prices and net positions of all included bidding areas.
The project is currently being operated by eight Power Exchanges: EPEX SPOT, GME, HEnEx, Nord Pool, OMIE, OPCOM, OTE and TGE. PCR is used to couple the following countries: Austria, Belgium, Czech Republic, Croatia, Denmark, Estonia, Finland, France, Germany, Hungary, Italy, Ireland, Latvia, Lithuania, Luxembourg, The Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.
The initiative started in 2009, with the PCR parties signing the PCR Cooperation Agreement and PCR Co-ownership Agreement in June 2012.
One of the key elements of PCR project is the development of a single price coupling algorithm, which adopts the name of EUPHEMIA (acronym of the Pan-European Hybrid Electricity Market Integration Algorithm).
This is used to calculate energy allocation, net positions and electricity prices across Europe, maximising overall welfare and increasing the transparency of the computation of prices and power flows resulting in net positions.
The power exchanges of the Price Coupling of Regions Initiative (PCR) hosted the PCR Euphemia Forum for the project stakeholders in Brussels on 11 January 2016. The main topics discussed were the current concept of the Euphemia algorithm as well as possibilities and proposals for short-term and mid-term development.
For more information please see the presentations: