5/9/24
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3 min.
At the beginning of 2024, we secured 2.7 million euros in seed funding for our AI-based energy management solution. Find out why energy management is so important right now and who has invested in our technology.
The spot market is a trading market where electricity is bought and sold in real time. The trade is carried out for delivery within the next few hours or days: The intraday market includes trading for very short-term deliveries within one day and the day-ahead market regulates the supply of electricity for the next day. Prices on the spot market fluctuate depending on supply and demand and are therefore volatile. The spot market is used for the short-term procurement of energy that is required within a specific period of time.
The spot market particularly plays a role for electricity traders, utility companies and major industrial buyers who want to meet their energy requirements flexibly and in real time. However, as a result of the increasingly decentralized energy supply, more and more medium-sized companies are also purchasing their electricity via the spot market in order to benefit from short-term price fluctuations. The Peter Bade GmbH offers an example of this, which has reduced its energy costs by 15.6% through spot market optimization.
According to the First Energy Report on electricity price development renewable energies such as wind and solar power are playing an increasingly important role on the spot market. Since these energy sources depend on the weather, they influence price fluctuations. On windy or sunny days, the price of electricity is often lower as supply increases and electricity generation becomes cheaper. The spot market also contributes to grid stability, as it makes it possible to balance supply and demand in the short term. By buying and selling electricity flexibly, bottlenecks can be avoided and the power supply can be reliably ensured.
The spot market for electricity works on the basis of auctions and pricing by market participants. Vendors and buyers report their offer and demand prices for various delivery times. The spot market is dynamic and prices are determined in real time based on current market demand and available offers. To ensure grid stability, electricity demand is continuously adjusted to maintain the balance between supply and demand.
Prices on the spot market are usually set every hour or half an hour. The price for one hour is determined by the so-called merit order effect, with cheaper power plants supplying the market first before more expensive providers are used to produce electricity. Prices on the spot market are subject to high volatility due to supply and demand, which is influenced by factors such as weather conditions, the availability of power plants and current electricity demand.
Electricity is bought on the spot market by various players:
The ppot market Is different from futures market especially in terms of delivery and pricing. While the spot market concerns the immediate or short-term purchase of electricity, the futures market is concerned with the purchase or sale of electricity at a fixed future date. The futures market is important for companies that want to hedge their energy costs in the long term.
While the spot market reacts to short-term fluctuations, the futures market offers an opportunity to protect from future uncertainties.
The spot market optimization is crucial for companies because it makes it possible to purchase electricity at the best prices. Companies that access the spot market can benefit from price fluctuations by adapting their electricity consumption to the cheapest time windows. This requires closely monitoring and analyzing the market, forecasting price trends and reacting in good time.
Well-optimized access to the spot market can help companies reduce their energy costs and benefit from low electricity prices. The spot market procurement is often carried out by specialized energy traders who are able to identify short-term market changes and react in good time. Paired with an intelligent energy control companies have recently been able to adjust their electricity consumption fully automatically to price signals from the intraday market. By using the planned flexible grid charges, they can optimize their electricity costs further.
Companies can benefit from the spot market through various strategies:
The spot market optimization is an important strategy for companies that want to manage their energy costs flexibly and dynamically.
At the beginning of 2024, we secured 2.7 million euros in seed funding for our AI-based energy management solution. Find out why energy management is so important right now and who has invested in our technology.
The German BAFA subsidy is an attractive opportunity for companies to receive financial support for energy-efficient measures. In this article, we answer the most important questions about BAFA Module 3 subsidy so that you can make the most of the funding opportunities.
FlexPower and encentive enable companies to automatically optimize their electricity consumption on the intraday electricity market for the first time.
