Dayahead

Dayahead, commonly written as day-ahead, refers to a wholesale electricity market where energy for the next day is scheduled and priced before delivery. In these markets, generators offer supply, and buyers designate demand for each hour of the following day.

Market operators aggregate bids and offers, clear the market for every hour, and publish a day-ahead schedule with hourly quantities and prices. Prices are typically set by the marginal cost of the last accepted offer, and the resulting schedules are used to coordinate physical delivery.

Participants include power producers, retailers, traders, and financial hedgers. Transmission System Operators review schedules to ensure they respect network limits and to determine feasible flows, sometimes requiring redispatch or curtailment to handle constraints.

After clearance, actual usage can deviate from the day-ahead plan. Deviations are managed in imbalance markets, with settlement based on imbalance prices or penalties.

Day-ahead markets reduce price volatility and help with planning, but rely on forecasts and sophisticated grid modeling. They may still experience scarcity pricing during tight conditions and require robust market design to prevent market power concerns.

Many electricity systems operate day-ahead markets worldwide, including Europe and North America. Examples of platforms include EPEX SPOT (Europe), Nord Pool (Nordic region), and PJM's day-ahead market.

See also: Electricity market, real-time market, market clearing, imbalance market.