Within the Single Day-ahead Market Coupling ('SDAC'), a Second Auction procedure is applied when electricity prices reach a pre-defined threshold in the affected bidding areas. The Second Auctions allow market participants to modify their bids in order to improve the market situation. The Second Auction is organized according to local or regional processes and is the responsibility of the respective Nominated Electricity Market Operator ('NEMO'). Countries currently able to activate the Second Auction mechanism include Austria, Belgium, Croatia, Czech Republic, Estonia, France, Germany, Greece, Hungary, Latvia, Lithuania, Netherlands, Portugal, Republic of Ireland, Romania, Slovakia, Slovenia and Spain.

Since Second Auctions have led to an increase in operational risks in recent years and at the same time their originally expected benefit has been negligible or even zero one, as evidenced by the results of Second Auctions over the past few years, all NEMOs have decided to consider the possibility of Second Auction mechanism removal in a coordinated manner. All NEMOs also recommend the removal of Second Auction mechanism in preparation for the introduction of 15-minute products and the associated increase in calculation time from the current 17 minutes to 30 minutes, optimization of the market coupling process and preserving the operational reliability of the SDAC.

OTE, a.s. as NEMO in the Czech Republic invites all interested market participants to contribute their views on the proposal to remove of Second Auction mechanism through the public consultation, which is available on the ALL NEMO Committee website at this link until January 15, 2024¹. The outcome of this consultation will be carefully assessed and will contribute to defining a coordinated position of all NEMOs in regard to the Second Auctions and their possible removal.

*OTE, a.s. as a Nominated Electricity Market Operator (NEMO) in the Czech Republic has been a member of the All NEMO Committee since 2015.

_{¹All NEMOs have approved the extension of the public consultation from 8 to 15 January 2024.}