4 ms·
The marginal price of any good is the cost to produce one additional unit of that good. That applies to electricity too. Saying "the highest cost available at
by dkjaudyeqooe 4y ago
The marginal price of any good is the cost to produce one additional unit of that good. That applies to electricity too.
Saying "the highest cost available at any moment sets the price for everyone" is misleading, it's also the lowest marginal price required to satisfy the total load required to supply the market.
- seydor 4y agoi meant that in the EU wholesale market , everyone gets the marginal price. It is not the cost of an additional unit, a mwh of renewables is practically free (if paid-as-bid) but gets paid as natgas (because it gets paid-as-cleared)
- dkjaudyeqooe 4y agoYeah but that's how the market pricing works, it's a function of the auction process. Everyone pays the price required to satisfy the demand. See stock opening and closing auctions for a similar process. It feels odd that sellers get the higher price but it makes sense ultimately. The margin price in that market is the marginal cost of a GW hour by for the last GW that satisfies the load required (demand).