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.

A Merchant PPA is a type of power purchase agreement in which electricity is sold at market prices without a fixed price being set in advance. Unlike traditional PPAs with long-term price security, this model links electricity producers directly to the wholesale market. That means they carry the full exposure to price fluctuations—shouldering the risk of falling market prices, but also benefiting from the potential upside when prices rise.

The off-peak price is accordingly the price that a good or service costs at times of low demand. In the power market, this refers to the average power price on weekdays between 8 p.m. and 8 a.m. and on weekends.

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.

The peak price is the price for a good or service at particularly high demand. In the power market, the peak price generally refers to the average market price of a megawatt hour (MWh) at times of peak load, i.e. on weekdays between 8 am and 8 pm.

Power Purchase Agreements (PPAs) are a key route to market for renewable electricity. These contracts can be classified according to several criteria, one of which is the type of delivery. Here, physical delivery is contrasted with virtual delivery.

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.

Power Purchase Agreements, or PPAs, are long-term power supply contracts. They serve as a hedge for operators of wind and solar power plants, as well as large power consumers, helping to reduce financial market price risks. Here, we present the key types of PPAs.

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.

Value Stacking refers to a business strategy in which a single asset is used to generate multiple revenue streams. The goal of the strategy is to increase return on investment (ROI) and shorten the amortisation period of the asset. For power-generating or energy-storing assets, Value Stacking is particularly relevant because these assets can participate alternately in various market. This principle is also known as multi‑market, cross‑market, or X‑market optimization.