The Day-Ahead Market is the first market of the Exchange, launched six months after registration of POLPX. This market has been in operation since June 30th, 2000 and it is a physical spot market for electrical power.
One of the basic goals of this market is to establish prices of electrical power for other contracts, concluded on the wholesale power market in Poland. Its roles also include:
- allowing market participants to initially balance their contractual positions
- allowing indirect pricing of the value of power enterprises (generators in the first place) by pricing of the commodity they are producing (i.e. electrical power)
- generation of significant investment signals in the domain of building new generation capacity
In the model solution, the positioning of this market in the buying portfolio of the power market participants is located between term contracts with physical power delivery on the current day market and balancing offers on the balancing market. Conclusion of transactions on the Day Ahead Market is taking place based on:
- level of hourly demand from the previous day (broken down into working days and holidays)
- hourly recipient consumption profile
- short-term weather forecasts (temperature, clouding, wind force - currently gaining increasing significance due to the growing number of wind generators connected to the national power grid)
- expected variation in production and demand for electrical power (resulting from system or generator outage, varying demand of the largest recipients or other events having impact on the production and consumption of electrical power)
Organization of the Day Ahead Market trading
The Day Ahead Market of POLPX is composed of 24-hour markets, quoting one type of hourly contract each. Additionally, the DAM market is quoting three block contracts (PASMO - contract with delivery of 1 MWh of power in each hour of the 24h day, Euroszczyt - contract with delivery of 1 MWh of power in each peak hour between 8:00 and 22:00, Offpeak - contract with delivery of 1 MWh of power in the demand low hours - 23:00 to 7:00).
The Exchange is also offering participants of the DAM market the option to place and clear OTC transactions, based on the standard contracts traded in the DAM market exchange session.
Similarly to other POLPX markets, the Day Ahead Market is organized in the form of electronic exchange. The Exchange is offering a comprehensive service, covering organization and execution of trading within the DAM floor, organization of clearing for transactions concluded on the Exchange and also OTC transactions placed for settlement and handling of Exchange notifications to the TSO's.
The DAM trading accuracy is PLN 0.01/MWh. The minimum order volume is 0,1 MWh. Trading takes place every day, also on holidays. The session for hourly contracts is carried out in two trading/quotation systems - fixing and continuous trading. In the case of block contracts, the trading session is based on the continuous trading system only.
Who is the DAM market for?
Te Day Ahead Market is a physical market of electrical power. This means that in the case of concluded transactions, there is physical flow of electrical power. This is why this market is primarily dedicated to:
- Electrical power generators
- Electrical power brokers (separated from former distribution companies in 2007, they are electrical power dealers, operating based on electrical power trading concessions)
- Off-tariff electrical power consumers
- Electrical power wholesale trading companies
- Brokerage and Commodity Brokerage Houses.
