How do electricity markets
Electricity markets operate based on supply and demand dynamics, with changing demand throughout the day influencing pricing. Peak demand typically occurs in the afternoon, while prices fluctuate based on load profiles and market clearing principles. Explore how electricity is dispatched and how supply meets demand to determine market clearing prices.
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Presentation Transcript
How do electricity markets work? Rudi Hakvoort
LearningObjectives To identify what effects the changing demand throughout the day To explain how changing demand can effect electricity prices
Load Profile Peak demand in the afternoon MW Rising demand in the morning Decreasing demand in the evening Low electricity demand in night night morning afternoon evening 0.00 6.00 12.00 18.00 24.00
Load Profile MW PEAK LOAD MIDDLE LOAD BASE LOAD night morning afternoon evening 0.00 6.00 12.00 18.00 24.00
Dispatch of Electricity MW night morning afternoon evening 0.00 6.00 12.00 18.00 24.00
Market Clearing Price Demand curve Market clearing price Supply curve Generation Capacity Q
Supply vs demand Night Low Prices Base Demand Peak High Prices Peak Demand PPeak 6 6 5 5 4 4 PBase 3 3 2 2 1 1
P 6 5 6 4 P 5 4 3 3 2 1 2 1 Night Peak MW night morning afternoon evening 0.00 6.00 12.00 18.00 24.00
