On commodity markets, the price is derived from the producers' marginal costs. This market-based pricing process is known as marginal pricing. On the electricity market the merit order model has become established because it describes, rather than prescribes, why power plants are used in a certain order.

Marginal Pricing is an economic model that explains a specific type of pricing. It posits that in competitive markets, the equilibrium price (where supply and demand are equal) is largely determined by the producers with the highest marginal costs (at the equilibrium point).

There are several forms of market participation for a Battery Energy Storage System (BESS) in energy markets. Check out our list of energy markets that are a good fit for flexibility from battery storage.

The market value is a metric that measures how valuable electricity coming from a particular plant is. It helps us understand how higher shares of renewables collectively lead to lower returns and its implications for the ongoing energy transformation.

Currently, electricity is largely auctioned on the exchanges through Pay-as-Clear Auctions, where the price for all suppliers is based on the highest bid. Pay-as-Bid Auctions, where each supplier is paid according to their individual bid, are intended to lower prices. But there's a catch.

Power pricing on the wholesale market largely follows the laws of the market economy. Like many other wholesale prices, the power price is also distorted by regulatory market intervention on the producer side, for example through subsidies, taxes and CO2 pricing. However, pricing on the power exchange itself is based on competitive criteria.

The REMIT regulation, formally known as the "Regulation on Wholesale Energy Market Integrity and Transparency," is a pivotal legislative framework within the European Union (EU) that plays a crucial role in ensuring the fairness, transparency, and integrity of the wholesale energy market.

Capacity and capability determine the scale of a battery storage system. However, there are several other characteristics that are important for calculating the marketability and return potential of a Battery Energy Storage System (BESS)...

Uniform Pricing refers to a situation where all buyers in a market pay the same price for identical products or services. This contrasts with price discrimination, where different prices are charged for similar transactions, depending on the buyer or seller.