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Forward and future markets
how make money,
energy contracts are set today, with delivery in the future
contracts reduce risk, knowing it will get delivered, and their will be a buyer, solves exposure to volatility of spot market price.
forward trades: agreement to deliver, less standardise contracts, agreed price at date, then locked in. More flexible,. Example deliver 10MW ,247 for a period (baseload). Other decomposing of this
future trades: agree to deliver electricity in the future, traded on an exchange, standardised ,
Energy Trading
daya head trading: forecasts “Adding shape”
daya ahead and intra day
demand forecast.
to meet demand buy base load, peak product, add shape.
Power exchanges - based on an order book. Nord Pool, FX Spot
gate closure - 1 hr before settlement period.
match forecast of demand with power purchased from generators.
Physical notifications