Re:Day ahead electricity prices for EU
by redleader55 on Saturday August 27, 2022 @09:53AM
(#32619031)
There are several energy markets, not just one. The most energy is bought and sold on private contracts on very long term. Then there is the "next-day" market, which is what this app shows. Then there is an hourly market to match instant demand and supply variations.
It is possible Czech producers sold energy to Germany for a very low price a few years ago on a let's say 5 year contract which is still valid. Now Czech Republic needs to buy at a high price the energy from Germany because it cannot meet its own demand. Again, this is speculation on how that could work.
the OP meant that the producer is allowed to sell to the higher priced exchange, rather than being forced to sell it at a low price to the consumer. Therefore, the OP is assuming that someone at the exchange is going to profit nicely without having done any work by arbitraging the sale of electricity.
I'm guessing that the missing variable is "cost plus" pricing for consumers? By selling the electricity on the market and then buying it back they can increase the price for consumer.
>Czechs produce electricity at 0.1EUR/MWh
so far so good. Now you have -0.1EUR and 1MWh of power.
>then sell it to an exchange in Germany
suppose the market price is 400EUR. after selling it to an exchange you have 399.9EUR and 0 MWh of power
>and buy it back for the "market" price.
so you buy it back at the market price. Now you have -0.1EUR and 1MWh of power. That leaves you off... in the same position as step 1? What's the point in selling it to the exchange and buying it back?
Moreover, I don't see anything interesting happening here. You can replace "electricity" with "oil" and you basically describe how petro states work (ie. pump oil out of the ground, sell it on the global market for far more than it costs for you to pump it out of the ground).