electricity for next-day delivery is traded on the spot market, typically in hourly or half-hourly chunks. Ahead of a cut-off point (usually midday), generators bid the amount of electricity they expect to be able to supply for each day-ahead time period – for instance, the hour beginning at 4:00 a.m. Expected supply and demand determine the market-clearing spot price.44 Prices in electricity spot markets are notoriously volatile, with, as we will see, hugely significant implications.
