Each country works as a free market (inside a rails defined by their national agencies), where energy providers aim to offer a price low enough to be among the cheapest to cover the energy consumption forecast.

For those countries connected, those providers can participate in other markets. France power plants can sell energy to Spain, but not to Portugal.

The trick here is that the price each opperator's offer is somewhat calculated based on opportunity cost. Wind turbines has no opportunity cost, since not selling the energy generated from the wind now does not make them able to sell it in the future (that energy can not be stored at industrial level). Then, all the accepted offers for a given forecast are paid at the price of the most expensive offer among them.