Cost Benefit Analysis for Loose Volume Coupling

The Trade & Cooperation Arrangement (TCA) between the United Kingdom and the European Union sets out proposed trading arrangements to replace the UK’s membership of the Single Day Ahead Coupling (SDAC) market. Annex ENER-4 of the TCA sets out the broad requirement for this new market design, known as Loose Volume Coupling (LVC). Under LVC, the volume and flow of interconnectors between the UK and EU bidding zones directly connected to the UK are determined independently from the pan-EU SDAC market process.

As set out in the TCA, a first step in the development of the LVC solution is the delivery of a Cost Benefit Analysis (CBA). Relevant UK and EU TSOs have worked together with their consultancy partners (CEPA) to publish this first stage deliverable which can be found at the link below.

UK TSOs would like to invite wider stakeholder feedback from across the industry on the published CBA report and the supporting presentation. While the TCA sets out a formal consultation period for the development of technical procedures at a later stage, general industry feedback on the broad design of LVC as set out in the report and presentation is a key first step in the progression of the solution.