Wholesale electricity markets are where large-scale transactions for electricity take place – before power ever reaches homes or businesses. Irene Guerra Gil explains the structure behind these markets, from over-the-counter deals and bilateral Power Purchase Agreements (PPAs) to exchange-based trading platforms like EPEX and Nordpool. She also unpacks the distinction between futures markets (planned months or years ahead) and spot markets (traded just days or hours before delivery), giving listeners a foundational understanding of how power is priced and distributed at scale.
As solar and wind energy become a larger share of the electricity mix, markets have had to rapidly evolve. Because renewables are variable and weather-dependent, there’s increased reliance on short-term markets – like day-ahead and intraday trading – to manage real-time supply and demand fluctuations. Irene discusses how renewable generators need to continuously adjust their positions to match actual production, making short-term flexibility and forecasting more important than ever.
Major regulatory changes are reshaping how energy is traded. Irene highlights the upcoming shift in Germany’s day-ahead market from hourly to 15-minute trading blocks – set to begin in June 2025 – driven by EU regulations to better integrate renewables. These adjustments aim to create more responsive, precise market mechanisms that reflect the true variability of clean energy generation.
Intraday markets allow trading to happen within hours – or even minutes – before electricity is delivered. For renewable producers facing unpredictable weather conditions, these markets are essential to balancing discrepancies between forecasts and actual output. Irene emphasizes the growing strategic value of intraday continuous markets, where rapid price swings and volatility also create opportunities for savvy participants.
Managing energy in a renewable-dominated system isn’t just about supply – it’s also about when and how that supply is used. Irene explains that both large-scale battery storage and household-level solutions like solar-plus-storage are key to smoothing out price volatility. Additionally, demand-side flexibility – where consumers shift energy use based on market signals – is becoming just as important. Together, these tools offer a path to a more stable, adaptable energy system.
"Renewable energy has made short-term markets more important than ever; it’s all about adjusting your position quickly and accurately."
"Energy storage and demand-side flexibility are critical tools to reduce price volatility and make renewables more reliable."
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