The 15 minutes MTU issue

Electricity wholesale markets, such as the SDAC or the SIDC, work on time slots named MTU: Market Time Unit. For instance, on the SDAC aka the day-ahead market, market participants can submit orders for a given hour. I.E., sell 3.14 MWh for the 3rd hour of D+1.

Due to an energy market that needs to cope with brand-new and much more dynamic production and consumption paradigms, the team supporting the algorithms behind the SDAC is investigating, among others, the way to reduce the MTU length from 60 minutes to 15 minutes.

Moving from 60 to 15 minutes means that Euphemia, the algorithm that solves SDAC every day, should cope with and solve an optimization problem larger than 4 times. Due to the block orders, the solved problem is 1) combinatorial and 2) non-separable in 96 single and independent problems. To keep the resolution time reasonable, it seems that the Italian PUN should be removed, being the PUN orders substituted with regular demand orders.

Due to their strict correlation, the 15-min MTU will be used also in the implicit auctions available for the intraday. Let us note that the 15-min MTU products are already used in XBID in some markets.

The 15-min MTU adoption opens new trading possibilities as well as new challenges to solve. From the perspective of a market operator, the following issues will arise:

1. An assessment of how data storage and reporting already support 15-min MTU.
2. An assessment of how forecast algorithms and decision-supporting systems support 15-min MTU.
3. To start early by performing a scenario analysis to evaluate the impact of the PUN removal.
4. To start early by performing a scenario analysis to evaluate new bidding strategies.