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Energy Studies | 15th May, 2023

Understanding Day-ahead & Intraday Markets


Day-ahead and intraday markets are both types of markets in which participants trade electricity. Let's see how they're different.

Reading time : 2 min

Written by

Tomás Oliveira

Why is electricity traded on a daily basis?

To ensure that supply and demand are balanced in real-time and that the electricity grid remains stable and reliable. 

Electricity cannot be easily stored in large quantities, so it must be generated in real-time to match the constantly changing demand for electricity. 

This means that the electricity market operates in a continuous cycle of production, delivery, and consumption.

 

Example of the day-ahead and intraday dynamics

Example of the day-ahead and intraday dynamics

 

The main difference between the two markets is the time horizon for trading

The day-ahead market allows market participants to buy and sell electricity for the next day, while the intraday market allows for trading within the same day.

 

Day-ahead market

In the day-ahead market, participants submit their bids and offers for electricity to be produced and delivered in the next day. 

 

Intraday market

In contrast, the intraday market allows for trading within the same day.

 

Interesting facts about spot market trading 

Source: Next Kraftwerke

 

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