Implicit Auctioning on the Kontek Cable: Third Time Lucky?

Cross-border capacities in Europe are currently inefficiently used. Implicit auctioning is about
eliminating these cross-border trade inefficiencies by internalizing the arbitrage into the auction
procedures of the Power Exchanges that are organizing trade nationally. On the Kontek Cable, implicit
auctioning has been implemented without price coordination between the involved Power Exchanges.
This implementation, referred to as “volume or dome coupling” as opposed to “price coupling”, has
been argued to be institutionally easier to implement. The Kontek Cable experimented with three
different implicit auctioning implementations whose performance we analyze empirically in this
paper. We find that the third implementation is significantly outperforming the previous two
implementations, but in this third implementation stakeholders partly abandoned the volume coupling
approach they initially believed to be a viable alternative to price coupling.