GB & EU Markets
8 mins

A Deeper Dive Into Wholesale Energy Markets in GB

In this blog post, we’re taking a deeper dive into some of the different wholesale energy markets in the GB power market. Understanding how these markets relate to each other is really important if you’re modelling wholesale energy revenue streams for your energy projects. 

What wholesale markets can you trade power in in the GB market?

In the GB electricity market, there are several wholesale markets that you can trade power in. These markets differ based on when they are traded, how you trade them and the granularity in which you can trade. Most of this trading occurs well before delivery, as large generators need to submit their planned dispatch pattern to the System Operator via a Physical Notification at least 60mins before delivery. Some of the main wholesale power markets in GB include:

  • Forward/OTC market
  • Day Ahead Hourly Auction
  • Day Ahead Half-Hourly Auction
  • Intraday 1 and Intraday 2 Auctions
  • Intraday Continuous Auction 
  • System Price

We’ve included more information about the specifics of these markets in the appendix of this article. 

Screenshot of multiple wholesale energy markets being modelled in Gridcog

Can you trade between markets?

Yes. There are many reasons that you may trade between markets including:

  • More granular contracts closer to real time, which will more accurately reflect demand/generation profiles.
  • Improved accuracy of weather/demand forecasts closer to real time.
  • Plant outages or sudden changes in market conditions.

These above changes may cause the prices to change considerably between markets. Flexible assets such as a battery, fleet of electric vehicles or a gas peaker can quickly respond to price signals and often aren’t locked into a must-run profile. Therefore, they will opt to run where their flexibility is valued the highest – this price signal is likely to correspond with when the market needs them the most.

Graphic demonstrating the different value in wholesale energy markets in GB on 14 May 2024

How does trading between wholesale markets work?

Ahead of each auction or continuous market Traders will have a forecast or prediction of what they think the price will be, this will drive their decision as to which market to enter and when. Below is an example of a hypothetical battery asset trading in the GB market.

1. In the Day Ahead Hourly Auction I enter the two following trades:

          a. Sell 1MW at £100/MWh at 8am

           b. Buy 1MW at £40/MWh at 1pm

2. In the Day Ahead Half-Hourly Auction I do the following:

           a. Buy 1MW of energy at 8am for 30mins at £90/MWh

           b. Sell 1MW of energy at 9am for 30mins at £130/MWh

           c. Profit: I have now made £40/MWh (£20 for my 30mins) profit from re-adjusting or churning my position

3. In the Intraday Continuous Market I do the following:

           a. Buy 1MW of energy at 8.30am for 30mins for £80/MWh

           b. Sell 1MW of energy at 7.30am for 30mins for £150/MWh

           c. Profit: £70/MWh (£35 for my 30mins) from re-adjusting or churning my position

4. Result:

           a. In this example instead of making a £60 spread as I locked in in the day ahead hourly market I made a total of £60+£20+£35 = £115 and delivered the same volume of energy. This is because the time value of energy changed throughout the course of the day and my battery could re-adjust its traded position to make the most of these changes.

What is churning a position?

Churning is doing what the battery in the example above did and re-adjusting a traded position. Sometimes you can churn and not even run the asset. As you are trading (or simulating) a physical asset though, you must always ensure that the asset has enough charge to physically deliver the trade that you’re modelling.

 Churning can be a very lucrative revenue stream for flexible assets, especially if the market is volatile. I.e. sudden changes in demand or weather forecasts.

If you want to learn more about how Gridcog supports modelling wholesale energy revenue streams in different market structures, reach out here to speak to one of our team.


Forward/OTC market:

○  Overview: An over-the-counter market where buyers and sellers of power come together to trade power for the future. This is important to hedge exposure i.e. a retailer will often use this market to hedge their exposure to retail supply prices.

○  When: Years, Seasons, Quarters, Months, Weeks and Days before delivery

○  How: This is power that is traded bilaterally, both on exchange (trading screens) and over the counter. It is often facilitated by brokers.

○  Granularity: Yearly, seasonal, quarterly, monthly, weekly, daily or other bespoke contracts. These contracts are usually for EFA blocks (4 hour), peaks or baseload (rather than 30 minute intervals).

Day Ahead Hourly Auction:

○  Overview: A Day Ahead pay as clear (everybody gets the same price) auction for power contracts for the next day. This is a very liquid market and is often the reference wholesale market, the high liquidity means there is confidence that the prices are representative.

○  When: At 09:20 and 09:50 GMT every morning there is an hourly auction that runs on two exchanges (EPEX and N2EX respectively). This is for delivery on the next power day (starting at 23:00 in GB).

○  How: Buyers and sellers of hourly power for the next day will submit orders into these auctions. There are different order types you can submit, for example a Limit Order could be something like ‘Sell 50MW if the price is greater than £100/MWh’. The clearing price of this auction is the marginal price that buyers and sellers exchanged power in each hour.

○  Granularity: 24 x Hourly contracts

Day Ahead Half-Hourly Auction:

○  Overview: A Day Ahead pay as clear auction for power contracts for the next day. As this is closer to delivery than the Day Ahead Hourly auction Traders can trade volumes based on revised weather and demand forecasts that may have evolved throughout the day.

○  When: At 15:30 GMT every afternoon there is a half-hourly auction that runs on EPEX. This is for delivery the next power day (starting at 23:00 in GB).

○  How: Buyers and sellers of hourly power for the next day will submit orders into these auctions, the only order type you can submit is a Limit Order.

○  Granularity: 48 x Half-hourly contracts

Intraday 1 and Intraday 2 Auctions:

○  Overview: Additional pay as clear half hourly auctions. These are much less liquid than the Hourly and Half Hourly auctions, this means it is unlikely you can clear large volumes of power in these markets.

○  When: These run on EPEX at 17:00 on D-1 and 08:00 within-day every calendar day.

○  How: Buyers and sellers of hourly power for the next day will submit orders into these auctions, the only order type you can submit is a Limit Order.

○  Granularity: IDA1 – 48 x Half Hourly contracts; IDA2 – 30 x Half Hourly contracts

Intraday Continuous Market:

○  Overview: A liquid power exchange where buyers and sellers can come to finesse their positions and trade just before delivery. This is a rolling 24/7 marketplace, but it is most active in the two hours preceding each contract’s delivery. For every given settlement period there may be 100s of trades for different volumes and prices.

○  When: A 24/7 rolling marketplace where buyers and sellers can trade up to 15 minutes before delivery.

○  How: EPEX facilitates this market via their M7 platform. Buyers and Sellers submit bids and offers for power for different time intervals onto this exchange, you can see all bids and offers in a stack (just not who submitted them). If a Trader wants to buy/sell they may cross the spread to initiate a trade.

○  Granularity: 48 x Half Hourly contracts (most liquid); 24 Hourly contracts; 6 EFA Blocks.

System Price:

○  Overview: This is the price Elexon uses to cash out anyone with an imbalance (i.e they bought more than they needed) in each settlement period. Also known as the cash out price, you won’t know what the System Price is until the settlement period has ended.

○  When: Rolling 24/7

○  How: The System Price is determined by the marginal Balancing Mechanism (market National Grid uses to balance the grid in real time) action in each settlement period.

○  Granularity: 48 x Half Hourly prices per day

Genna Boyle
Director UK & Europe
June 12, 2024
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