Europe’s electricity market continued to evolve during 2025-26, with regulatory reforms, market-design developments and cross-border initiatives aimed at strengthening market integration and improving the efficiency of cross-border electricity trading. To assess these developments, the European Network of Transmission System Operators for Electricity (ENTSO-E) published its ENTSO-E Market Report 2026 on June 29, 2026, reviewing major developments in European day-ahead, intra-day and forward markets between June 2025 and May 2026. The report highlights progress in market coupling and forward capacity allocation, alongside initiatives to improve the use of cross-border transmission capacity.

During the reporting period, the Single Allocation Platform (SAP), operated by the Joint Allocation Office (JAO), continued to support the explicit allocation of long-term cross-border transmission capacity rights. Transmission system operator (TSOs) and JAO also advanced preparations for long-term flow-based allocation (LTFBA) in the Core and Nordic capacity calculation regions. Developments also included updates to the Harmonised Allocation Rules (HAR) and related SAP arrangements, while work continued on the future evolution of long-term capacity allocation and hedging arrangements. JAO is also developing Orion, a new allocation platform that will replace its existing electronic capacity auction tool (eCAT) system. Orion is intended to provide a more reliable, scalable and efficient platform for cross-border capacity allocation, with enhanced functionality and a modernised technical architecture. The commercial launch is currently planned for September 2027.

The key achievements during 2025-26 were:

  • 15-minute MTU: The 15-minute market time unit (MTU) was implemented in the Single Day-Ahead Coupling (SDAC) on October 1, 2025, following its gradual introduction in the intra-day market over the preceding months, aligning day-ahead market granularity more closely with the imbalance settlement period and enabling participants to trade in shorter intervals.
  • Shorter intra-day gate closure: The intra-day cross-zonal gate closure time (IDCZGCT) began being reduced from 60 to 30 minutes on January 14, 2026, with the first group of European bidding zone borders (BZBs) moving to the shorter timeframe. The transition is being implemented progressively across Europe.
  • Advanced hybrid coupling: Advanced hybrid coupling (AHC) was implemented in the Core capacity calculation region (CCR) for the day-ahead timeframe in June 2026 to improve cross-zonal capacity (CZC) allocation efficiency.
  • Collateral management: Work continued on improvements to the collateral framework supporting long-term capacity allocation under the future LTFBA arrangements.
  • New LT auction platform: JAO is developing a new long-term auction platform, Orion, to provide the market with a scalable and reliable platform for European forward capacity allocation.
  • LTFBA implementation: Functional testing of LTFBA was completed, with TSOs targeting November 2026 for go-live, within the project’s broader end-of-2026 timeline to support cross-border hedging opportunities.
  • Updated CCR methodologies: The European Union (EU) Agency for the Cooperation of Energy Regulators (ACER) approved the amendments to the determination of CCRs in December 2025. The changes included the merger of the Core and Italy North CCRs into the new Central Europe CCR (for the intra-day market timeframe, and for Regional Operational Security Coordination (ROSC) and cost-sharing methodologies), alongside changes affecting BZBs involving Energy Community contracting parties and neighbouring EU countries.
  • Balancing-market integration: Cross-border participation in the European balancing platforms continued to expand, strengthening the integration of balancing energy markets. The Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation (PICASSO) for automatic frequency restoration reserves (aFRR), Manually Activated Reserves Initiative (MARI) for manual frequency restoration reserves (mFRR), International Grid Control Cooperation (IGCC) for imbalance netting and, until the end of 2025, Trans-European Restoration Reserves Exchange (TERRE) for replacement reserves.
  • Economic benefits: European balancing platforms generated more than EUR1.18 billion in economic surplus in 2025, driven by enhanced imbalance netting and optimised balancing activations.

Overall, recent developments are expected to strengthen market integration and improve the flexibility and efficiency of Europe’s increasingly renewable-based electricity system.

The full report can be accessed here.