Market Types
 

・Forward Market
Contracts for future electricity delivery (months/years ahead). Functions like wholesale pre-booking with stable pricing.

・Spot Market
Real-time electricity trading where prices fluctuate with supply/demand. Think: buying groceries on the spot.

・Ancillary Services Market
Trades grid-stabilization services:

-Peak Shaving: Manages high-demand periods

-Frequency Regulation: Maintains grid frequency

・Renewable Energy Certificate (REC) Trading
Dedicated marketplace for wind/solar power with verifiable environmental attributes.

Trading Mechanisms

・Bilateral Negotiation
Direct contracts between generators and consumers. Similar to private agreements.

・Centralized Auction
Buyers/sellers submit bids on trading platforms. Matched automatically like an auction system.

Market Participants

・Wholesale Market
For major consumers: Factories or retailers buying directly from generators (min. 5M kWh/year).

・Retail Market
For SMEs: Purchases via electricity retailers. Like using a buying agent.

Consumer Categories

・Wholesale Consumers
Large users buying directly from generators (must meet high-voltage/high-usage thresholds).

・Retail Consumers
Commercial/industrial users purchasing through retailers with customizable plans.

・Default Service Customers
Non-participating users supplied by grid companies at market-reference prices.

Core Concepts

・Transmission Rights Trading
Secures grid pathway access to prevent congestion.

・Pool-Based Model
Centralized "electricity pool" distributing power under uniform rules (common in early markets).

・Locational Marginal Pricing (LMP)
Real-time pricing reflecting local supply/demand and transmission costs across grid nodes.