The inertia is revealing

Fast but slow

In the last post, we looked ahead at how the new 15-minute day-ahead auction might reshape order-book dynamics. Finer granularity might lead to narrower spreads, and reduce asymmetries, but at the cost of thinner books in specific quarters, where fragility would remain or even increase.

Modo Energy’s analysis of the go-live approached the same change from a different angle, but with a similar outlook: moving from 24 to 96 settlement periods leads to sharper price signals, more volatility, and greater complexity. That means short-lived spreads, opportunities for fast response, with intraday trading still centre-stage. “The reform is not a threat to batteries – but makes it even more important to model, forecast, and manage risk at this new scale of granularity” (Modo Energy, Oct 2025).

Seen together, the two perspectives are complementary: one through the lens of market microstructure, the other through asset economics. Both suggest a system that is, on average, cleaner and more opportunity-rich, but also fragile, prone to be affected by structural frictions.

The sawtooth persists

One expectation around DA15 was that it would reduce or eliminate the mismatch between hourly planning and shorter-term adjustment needs. Under the hourly auction regime, intraday (ID) was the venue to “correct” positions back to quarter-hourly needs, producing the familiar sawtooth drift within each hour.

Now DA prints quarter-hours and in theory, that mismatch should be reduced. In fact, however, the pattern remains: the last quarter-hour of the hour still clears systematically lower than the first quarter-hour of the next.

This is not an expression of fundamentals. Physical demand and renewable output do not jump discontinuously at the top of the hour; they follow smoother curves. An efficient price path would slope gradually into and out of each hour, would it not?

Why does the sawtooth persist? Because, as Modo highlights, large producers continue to structure bids around hourly production profiles. Their quarter-hour offers end up too low at the end of the hour and too high at the start of the next. In other words, the sawtooth is a residue of bidding conventions.

Storage and flexible assets do not flatten this because their role in the DA market is limited and the spreads are probably too small to justify heavy participation.

The discontinuity survives because the incumbents who could remove it have little incentive to change their habits. That raises a broader question: why is potential being left on the table? If a visible inefficiency persists, what does it tell us about market structure, about the health of the overall system?

Pivotality and structural inertia

The persistence of the sawtooth highlights that this is not just a matter of design, but of market structure. If inefficiencies survive even when they are visible, predictable, and theoretically avoidable, then we are dealing with more than quirks of bidding logic. We are seeing the weight of incumbents whose behaviour effectively sets the rhythm of the market.