SDAC 15-minute MTU transition: What’s changing for European short-term power traders?

On 30 September 2025, the European power markets will undergo a major structural shift: the Single Day-Ahead Coupling (SDAC) will transition from hourly to 15-minute market time units (MTUs). This change will apply simultaneously across all participating exchanges and bidding zones (more precisely, across all Nominated Electricity Market Operators, or NEMOs).

The reform is designed to better integrate intermittent renewable sources and increase market efficiency. With wind and solar generation fluctuating more sharply within the hour, a higher temporal resolution aims to improve forecasting and enhance grid stability.

For short-term power traders, this essentially means more granular trading. Instead of bidding in hourly blocks, they will need to manage 96 quarter-hour intervals per day. While the official clearing price will be calculated on a 15-minute basis, hourly bids will still be possible.

This article explains what this market change means in practice and what traders can expect in the new 15-minute landscape.

Timeline of implementation

Before going into the updates brought about by the transition to 15-minute MTUs in the SDAC, we list the milestones and challenges that mark the implementation:

• 19 December 2024: The official go-live date for 15-minute products in the SDAC was announced: 11 June 2025.
• 7 April – 15 May 2025: Member testing in dedicated test environments, including end-to-end stress testing of the EUPHEMIA algorithm under 15-minute conditions.
• 17 April 2025: EPEX SPOT signaled it will vote against the proposed June timeline.
• 30 April 2025: Nord Pool and other NEMOs confirmed commitment to timely implementation.
• 14 May 2025: The new go-live was announced: 30 September 2025.
• 12 September 2025: After ‘comprehensive testing’, NEMOs confirmed readiness.
• 9 September 2025: The new EPEX trading system (MATS) went live, a prerequisite for the MTU change.
• 30 September 2025: This day marks the official go-live date of 15-minute coupling in the SDAC, with delivery starting on 1 October 2025.
• Rollback mechanism: In case of critical issues, the market can temporarily revert to hourly trading.

Updates to bidding logic and price formation

The granularity shift brings updates to order submission and price calculation. Here is an overview of what will change and what will stay the same:

Order types

Supported order types remain unchanged. Traders can continue using standard, block, linked, and other familiar formats.

Order availability

All bidding zones participating in the SDAC will support 15-minute MTU orders, except Ireland, which will maintain the 30-minute granularity. Note that Great Britain is not part of the SDAC and is not affected by this transition.

Period orders

Exchanges may allow 30- or 60-minute period orders, depending on the zone. These work like simplified block orders: they are only executed if the average price across the period matches the submitted limit price.

The EUPHEMIA algorithm supports cross-product matching: for example, a 60-minute order can be matched with four 15-minute orders. Orders are always cleared in the granularity in which they were submitted (e.g., a 60-minute order will only be matched within a 60-minute window).

Price discovery

Market prices will now be calculated at the 15-minute level. This means that bid and ask curves will be matched in 15-minute intervals, with the system still considering block and period order conditions. Importantly, only the 15-minute clearing prices are actually calculated by EUPHEMIA; all longer-duration prices are derived from these base intervals.

Index pricing

Exchanges will still publish a 60-minute index price – the average of four 15-minute prices, rounded to two decimal places. This averaging rule is built into EUPHEMIA’s design to prevent arbitrage opportunities between different time products. By ensuring that 30-minute clearing prices equal the average of two 15-minute prices, and 60-minute prices equal the average of two 30-minute prices, traders cannot systematically profit by buying and selling the same electricity across different time granularities.

Price effect: The sawtooth pattern

We now take a closer look at the possible impact of the reform. Fundamentally, the transition to 15-minute MTUs is not expected to change the overall distribution of hourly prices, apart from potential isolated anomalies in the early phase. A debated question is whether the 15-minute “sawtooth” price pattern – currently visible across 15-minute markets – will now emerge in the day-ahead market, or disappear altogether.

What is the sawtooth pattern?

The sawtooth pattern is a characteristic zigzag price movement across 15-minute intervals within an hour. Typically, it shows lower prices in the first and fourth quarters and higher prices in the second and third quarters. However, this can vary depending on underlying demand and generation patterns.

The pattern emerges from a fundamental market inefficiency. When solar generation ramps up within an hour, most participants bid their hourly average production into the day-ahead market, but their actual quarter-hourly output deviates significantly from this average.

For example, a solar producer selling their hourly average will effectively oversell in the first quarter (when actual generation is lower) and undersell in the fourth quarter (when generation peaks). To balance these mismatches, they must buy back power in early quarters and sell additional power in later quarters on intraday markets. However, since not all flexible assets participate in intraday markets, this creates systematic supply and demand imbalances across the quarters.

Today, this pattern is seen in intraday auctions, intraday continuous, and balancing markets, and is largely driven by:

• Residual profile balancing after the hourly day-ahead auction, especially during solar ramps or demand swings;
• Limited participation of flexible assets in intraday markets, especially from conventional units;
• Smoothing ramps of conventional assets to match hourly schedules.

Will the sawtooth pattern persist or disappear?

Whether the sawtooth pattern appears in the day-ahead market or fades across the board depends on market participant behavior:

• If a significant share of flexible assets – particularly large conventional generators – switch to 15-minute bidding in the day-ahead market, this could reduce or even eliminate the pattern across all markets.
• If most players stick with hourly bidding, the day-ahead market will likely inherit the existing 15-minute pattern, and it will likely persist downstream into intraday and imbalance markets.

The outcome will likely fall somewhere between these extremes. Early adopters will probably be fast-moving traders and smaller, more agile market participants willing to exploit arbitrage opportunities. Large generation portfolios, however, face complex optimization challenges when shifting to quarter-hour granularity. Such a change requires advanced IT systems and carries operational risk. These participants may wait to observe market behavior before committing to new bidding strategies.

These dynamics suggest the day-ahead market may initially show a dampened version of the sawtooth pattern. The pattern’s intensity will gradually diminish as more participants adapt their bidding strategies to quarter-hourly granularity.

Overall impact on market participants

The immediate impact of the SDAC MTU transition will vary depending on asset type, portfolio size, and operational flexibility.

Solar producers already face a sawtooth pattern-related challenge in principle. When forced to bid hourly averages in the day-ahead market while their actual generation follows quarter-hourly patterns, they face unavoidable exposure to the sawtooth pattern. They cannot “trade away” this mismatch in the day-ahead market.  Any attempt to hedge the quarter-hourly variations requires moving to intraday markets, where they become exposed to the very price volatility (the sawtooth) they’re trying to avoid.

What we expect to change overall is not necessarily the total economics of renewables, but where the costs are incurred. When market values are calculated using 15-minute production and price data, values will generally decrease (especially for solar), since higher within-hour production becomes negatively correlated with prices. At the same time, balancing costs will decrease. The “cost” of the quarter-hour pattern will then be reflected in market value rather than in balancing out the pattern through intraday or imbalance markets.

The move to a quarter-hour resolution will also affect PPA structures and subsidy mechanisms. Many support schemes include 6-/4-/3-/or 1-hour rules, which suspend subsidy payouts when prices are negative for a certain number of hours. The MTU transition changes how these rules are applied, for example:

• Germany: For existing assets, the rule still applies at the hourly level (using hourly averages). For new assets, subsidies are withheld for every quarter-hourly MTU with a negative price.
• Netherlands – The 6-hour rule can now start at any quarter-hour. All consecutive quarter-hours within the 6-hour window must be negative for the rule to trigger. For assets under the 1-hour rule, the subsidy is only lost for the specific quarter-hour(s) that clear negative.

An edge case: Paradoxical rejection

A concern flagged by some stakeholders is paradoxical rejection. It implies a valid order is not accepted due to conditions in the matching algorithm, even though its limit price is better than or equal to the clearing price. We note that this issue occurs only with orders that have a coarser time resolution than 15 minutes, primarily hourly.

Paradoxical rejection is possible due to the coexistence of multiple timeframes. As mentioned above, most NEMOs, including Epex Spot and Nord Pool, will offer cross-product matching, allowing traders to continue submitting hourly or 30-minute bids. However, if the majority of bids remain in hourly blocks – i.e, liquidity in individual 15-minute intervals is low – a small number of 15-minute bids could end up disproportionately influencing the clearing price for that slice, creating potential price anomalies.

This makes orders for the 60-minute period vulnerable, especially when the traded volume is heavily concentrated in hourly bids. If the algorithm cannot find consistent matches across all quarters of the hour, even well-priced hourly orders may be rejected.

Paradoxical rejection is most probable in smaller bidding zones with limited liquidity or trading volume, particularly on extreme days when most participants still submit hourly bids rather than adapting to 15-minute granularity.

Be prepared

In the early stages, the new 15-minute MTU framework may increase market sensitivity to anomalies and outliers. While these transitional effects could challenge established bidding routines, the reform is ultimately expected to improve the economics of renewables.

If you haven’t already, now’s the time to review your forecast models and bidding logic for 15-minute readiness. The more precise your fundamental forecasts, the better prepared you will be.

At Dexter, we are closely monitoring the implementation across bidding zones, updating our models and tools to ensure quarter-hour readiness, and supporting our customers in a smooth and profitable transition. For a deeper discussion, join us on LinkedIn.