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Electricity

Electricity Market

There are primarily two cost drivers for the electricity bill you have.

  1. Variable electricity cost, the cost of making power at that time.
  2. Cost of the grid. The cost of the grid is a reflection of how the market has evolved over time.

Think a lot of the

Auctioning​

Bid - What the buyer is willing to give for goods. Ask - What the seller is willing to sell for goods. PreviousSettlement - Value of the last transaction.

Forward Curve​

A forward curve shows the price at which you can agree today to buy or sell something in the future. It changes based on how people expect prices to move over time. Each point on the curve represents a different future delivery date. This helps businesses and traders plan by locking in prices for future transactions.

A forward curve is the estimation of the price of a good based on futures contracts. So, for example, if the contract is over monthly prices, then you use that, if the contract is over quarters, then you use it. This is because there might not be contracts on a monthly basis.

A forward curve is for the business in a commodity to understand the different possibilities of the market. This is what the market thinks the price of the good will be in that period.

EPADS​

Links

Thoughts

  • In Norway, they switched the bill to reflect the highest consumption day each month. So, if you have a high peak load during a month, you get to pay more. This is to keep the load on the grid as constant as possible.
  • In Norway, the most load on the grid is the 24th of December at 17-19. Guess why?
  • If you understand the electricity market, you understand anything.
  • No one fully understands the electricity market.