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Cecilia Maya: All Articles

How to Best Price Day-ahead Markets?

Originally published in APEx Newsletter Volume XXI – June 2022


Since the early waves of electricity market liberalizations, pricing in day-ahead markets has raised challenging questions rooted in economics and optimization theory. In general, finding uniform paid-as-cleared market prices, i.e. clearing prices that uniformly apply to bids such that all price-compatible bids are accepted and price-incompatible bids are rejected, is mathematically impossible in day-ahead (or more generally closed-gate) electricity markets, due to the presence of indivisibility constraints.

We discuss here how that pricing challenge is addressed currently in the EU Single Day-Ahead Coupling (SDAC), in…