The Flow-Based Market Coupling in Central Western Europe: Concepts and definitions

Flow-Based Market Coupling (FBMC), inaugurated in May 2015 as a means of cross-border capacity allocation in the Central Western Europe's day-ahead markets, is an important cornerstone of the European target model. If successful, this methodology is likely to be extended to other market zones and markets. Despite its importance, the FBMC methodology is complex and poorly understood by market participants. A thorough description of its concepts and definitions can serve as a starting point for further research into the methodology and its market impact.