a buy/sell order submitted at a price higher/lower than the best ask/bid price currently available in an order book. “Aggressive” orders are matched immediately and remove liquidity from the market.

energy market participant who is selling energy generated by production assets and/or buying energy at-scale for consumers. Some asset-backed traders engage in asset-less/proprietary trading in parallel to trading out the production/consumption of the assets they manage. The process of trading production/consumption volumes by selecting, prioritizing and balancing a collection of assets is commonly referred to as “portfolio management”. 

(also called proprietary/prop trader); energy market participant who exclusively buys and sells  energy to generate profits from price spreads (e.g. buy low, sell high) without delivering energy. To avoid running into the balancing market, asset-less traders need to ensure that their trading balance (the difference between volumes bought and sold for a given product) is strictly equal to zero at gate closure. 

trading modality which enables market participants to submit orders in daily Day-Ahead or Intraday auctions in a pay-as-cleared pricing model. If sell/buy orders are below/above the market clearing price, a trade is automatically executed. 

a fully automated trading approach requiring no human involvement across the entire trading value chain. 

secondary control reserve, automatically dispatched to restore the nominal grid frequency and gradually support/replace FCR if deviations persist.

holistic trading system that automates every step of a trade’s life cycle from data processing to decision making to order execution. 

cash or bank guarantees provided by a market participant to an energy exchange in order to trade certain volumes of power. 

trading approach aimed at executing orders by employing simple algorithms to optimize timing, pricing and volume.

trading modality which enables market participants to submit orders in often highly liquid order books to execute trades with counterparties at any given point in time between gate opening and gate closure throughout a given trading day.

in energy trading, a tradable contract is subject to a delivery time frame which obligates buyers/sellers to consume/produce the traded volume. In futures markets, market participants can trade day, weekend, week, month, quarter and year contracts. For example, a market participant who buys 5 MW for the March month contract is obligated to consume 5MWh during every full hour of the month of March. Although, by definition, “product” and “contract” denote the same, the common jargon is to use “product” in spot trading and “contract” in futures and OTC trading.

geographical area administered by a single transmission system operator (TSO). Most TSOs in Europe administer one country as their control area (e.g. RTE in France). Germany, in contrast, is divided into four control areas, managed by four TSOs (Amprion, 50 Hertz, Tennet and TransnetBW).

Pan-European order book that allows for trades between market participants from different control areas. XBID order books are commonly open until one hour before gate closure.

a TSO/DSO-controlled short-term decrease in electricity production (wind and solar energy in particular) during the periods of oversupply to relieve congestion.

Pan-European Day-Ahead market coupling algorithm to define the market clearing price. 

the moment after which orders for a particular delivery period can no longer be submitted to an order book.

volume-weighted average price of all continuous trades executed during the last 1 hour before product delivery.

volume-weighted average price of all continuous trades executed during the last 3 hours before product delivery. 

a financial mechanism that automatically assigns a TSO-induced balancing price to a BRP’s portfolio imbalance within a particular settlement period.

similar to the Day-Ahead auction, however not necessarily executed ahead of the trading day, not necessarily covering the entire trading day and not necessarily subject to Multi-Regional Coupling. 

24/7 power spot trading market which enables participants to buy and sell power continuously in hourly, half-hourly and quarter-hourly products up to 5 minutes before delivery. 

tertiary control reserve, manually activated by TSOs to support/substitute for aFRR if long-lasting deviations occur.

trading approach which is entirely subject to human decision making and manual order execution.

price at which supply and demand reach an equilibrium, taking into account the merit order and market coupling. In power trading, the market clearing price is set during the Day-Ahead auction and applied to all market participants for every hour of the trading day.

mechanism aimed at harmonizing power exchanges and managing imports/exports between control areas in order to maintain an interconnected pan-European power market.  The philosophy of market coupling lays the foundation for Cross-Border Intraday Coupling and Multi-Regional Coupling.

sequence in which power sources are ranked according to their ascending marginal costs while taking into account forecasted volumes for each power source. The equilibrium between daily demand and the merit order curve is the single most effective indicator of a given day’s market clearing price. For example, on a day with a lot of wind and solar production (lowest-cost power sources) and low demand, expensive power sources such as gas or coal are less likely to be activated, significantly reducing the market clearing price.

pan-European Day-Ahead coupling, streamlining the allocation of cross-border capacities between 19 markets during Day-Ahead auctions. As a result, most European Day-Ahead auctions take place at the same time (12pm CET).

a buy/sell order submitted at a price lower/higher than the best ask/bid price currently available in an order book. “Passive” orders aren’t executed immediately — they float in an order book until they get matched and add liquidity to the market. 

pricing model employed in auction trading, where all accepted orders trade at the same market clearing price. 

in energy trading, a tradable product is subject to a delivery time frame which obligates buyers/sellers to consume/produce the traded volume. In spot markets, market participants can trade hourly, half-hourly and quarter-hourly products. For example, a market participant who buys 5 MW for the 9-10 am hourly product is obligated to consume 5MWh between 9-10am. Although, by definition, “product” and “contract” denote the same, the common jargon is to use “product” in spot trading and “contract” in futures and OTC trading.

contrary to futures markets, spot markets are designed to accommodate trading for immediate or very near-term delivery. Day-Ahead auctions, Intraday auctions and Intraday continuous trading constitute spot markets in power trading.

messages denoting unexpected events that may disturb the process of power generation, transmission and/or consumption; e.g. large power plant outages.