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Day-Ahead Market
Key takeaways
- The day-ahead market sets electricity prices for delivery on the next day, settling each hour separately.
- It’s the price signal most often referenced when people talk about ‘the wholesale price today’.
- It’s especially relevant to tracker tariffs that pass wholesale movements through to the customer with a short lag.
What is the day-ahead market?
The day-ahead market is the wholesale electricity market segment where participants buy and sell power for delivery on the next day, with separate prices for each hour. It runs on an auction basis and is one of the clearest visible price signals for short-term electricity.
It sits between the longer-dated forward market (months/years ahead) and the very short-term intraday and balancing markets that adjust the system in real time.
Why it matters
It’s the reference price for many tracker or partly-indexed business contracts.
For traders, the day-ahead curve shows how peak vs off-peak prices are likely to behave the next day, which informs hedging decisions.
For demand-side users with flexible loads, day-ahead prices help plan load shifting into the cheapest hours.
