The Grid Algorithm that Might Black Out Entire Countries

​The Pan-European Hybrid Electricity Market Integration Algorithm, or Euphemia, is the supposed unification of Europe's power market. Different nations offer it their respective bids—for the buying or selling of some quantity of power—and the algorithm returns, first, a single unified network-wide price and, second, a determination of cross-border capacity—opening and closing the various European faucets as it sees fit.

The algorithm does this in a "day-ahead" manner, which is about what it sounds like; the vast majority of the power market is already sorted day-ahead vs. real-time. Part of the whole point of the Euphemia software is to make sure that no one country gets left in the dark, but also to generally optimize the network. According to French estimates, Euphemia stands to save Europe around€100 million per year.

The algorithm has a flaw, however, potentially a big one. This is according to energy regulators in Belgium, who have successfully ​pushed the launch date of the latest incarnation of Euphemia ("Euphemia 2.0") back by three weeks from April 1 to April 23. The problem: While promising to keep the lights on across Europe, it turns out that the grid management software might just have the inverse effect of triggering blackouts, possibly shutting out entire countries (Belgium, in particular).

This has to do with some unexpected behavior known as "non-intuitive trading," in which, for example, a country with extremely high energy prices (low supply) is approved to export power or vice versa, where a country with tons of supply suddenly becomes an importer. This is a side effect of grid optimization, and the results could be rather dire, particularly if you happen to be, yes, Belgium, a country that has recently seen its own power production capabilities crash as the result of a series of nuclear plant shutdowns. Suddenly, it stands to be a huge electricity importer.

The promise of the grid algorithm, ​according to the IEEE's Peter Fairley, is generally a more self-aware network. Historically, energy regulators representing individual countries would make their own determinations of cross-border capacity based on a "best guess." Whereas, Euphemia 2.0 offers a much larger picture, allowing for less conservative (more precise) estimates of cross-border capacity and ultimately more power on the market as a whole. Less electricity hoarding, basically.

At the moment, Belgium is surviving with help from a mild winter, but, to put the situation in perspective, regulators there are offering a dedicated blackout warning app and website. With diminished reserves, the country ​would have seen 25 days of blackouts (so far, in mid-February) given a winter on par with 2010/2011. Brutal.