Energy is sold from one country to another. However, the cross-border capacities required for the energy transportation are available only to a limited extent. For that reason, energy traders have to bid for the necessary cross-border transport capacities from the transmission system operators before they can carry out a cross-border deal.
In order to make the most efficient possible use of these limited transport capacities, transmission system operators assign its free capacities using a market-oriented allocation process.
Today energy traders forecast the demand for energy and the anticipated generation in the various countries. On the basis of these assumptions they estimate the market prices in the various markets. The limited available transport capacities at the market borders are not fully utilised at all times with this process. This can lead to economic inefficiencies.
Market coupling creates the conditions for exploiting the cross-border transport capacities even more efficiently.