Neil again! Welcome back to The Energy Academy.
In the last few episodes, we looked in detail at forward and futures markets - where electricity is traded for a specific price in advance of delivery.
But advance forecasts are never completely accurate - and so suppliers have to fine-tune their predictions - the industry term for this is “adding shape”.
They do this to meet more dynamic, up-to-date forecasts of their customers’ demands.
This is where the spot market comes in. The spot market is for day-ahead and intraday trading.
It’s called the ‘spot’ market because it’s the market for ‘on-the-spot’ trading, as in, trading for the here and now.
And ‘day-ahead’? Yep, you guessed it - day-ahead trading means that electricity is bought and sold for delivery at some point during the following day.
Intraday trading (sometimes called “within-day” trading) means that electricity is bought and sold for delivery on the same day.
Find out more: platform.modo.energy/phase