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How an Algorithm is Uniting Europe's Electrical Fiefdoms

Europe has started trading electricity across its borders in a day-ahead market

3 min read
How an Algorithm is Uniting Europe's Electrical Fiefdoms
No Borders: Images from Landsat 5 and Landsat 7 show Europe’s unified electrical landscape.
Photo: Planet Observer/Universal Images Group/Getty Images

Some six decades since Europe began to trade certain goods freely across its borders, electricity is finally joining the common market. In May, 16 countries, accounting for three-quarters of Europe’s power consumption, completed the adoption of a common system for cross-border trading that is now setting wholesale electricity prices from Spain to Finland and from the United Kingdom to Austria.

Integrating the world’s largest synchronized power grid is possible because of a sophisticated optimization algorithm for Europe’s day-ahead power markets—the Pan-European Hybrid Electricity Market Integration Algorithm, or Euphemia. This algorithm crunches every buy and sell bid submitted to the participating national and regional power markets. It simultaneously allocates rights to transborder transmission and sets the power prices for each market, outputting a selection of trades for the following day.

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This photograph shows a car with the words “We Drive Solar” on the door, connected to a charging station. A windmill can be seen in the background.

The Dutch city of Utrecht is embracing vehicle-to-grid technology, an example of which is shown here—an EV connected to a bidirectional charger. The historic Rijn en Zon windmill provides a fitting background for this scene.

We Drive Solar

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