Before answering the question of what is the Market Clearing Price (MCP), it is necessary to understand the Day-Ahead Market (DAM).
What is DAM?
Market operator (EPİAŞ) is an organized market for electricity trading and balancing transactions one day before the electricity delivery day. The purpose of the DAM is to determine the electricity reference price (MCP) and to provide the system operator with a balanced system one day in advance.
What is MCP and how is it formed?
Ensuring the balance between production and consumption is one of the most important elements of the energy sector. If more electricity is produced than consumption demand, resources will be wasted and costs will increase. Likewise, generation that is insufficient to meet electricity demand will lead to inadequacies and interruptions in electricity supply. In such a system, energy production and consumption amount must be kept in constant balance.
The market clearing price is the electricity price of the most expensive power plant currently in the system, which is matched at the point where production and consumption are balanced.
It is aimed to ensure that the generation facilities that will meet the consumption demand are included in the system in the most economical way and to minimize the cost in ensuring sustainable supply. The Market Clearing Price is published hourly on a daily basis. Every day at 14:00, the next day's finalized 24-hour prices are announced.
The minimum and minimum price limits determined in July 2024 in accordance with the "Principles and Procedures for Determining Minimum and Maximum Price Limits in the Day-Ahead Market and Balancing Power Market" 0 - 3000 TL/MWh.
There are many factors that affect the Market Clearing Price. Examples include natural gas prices, dam occupancy rates, the amount of electricity generated from renewable resources, temperature, foreign exchange, etc.
In September 2022, with the Russia-Ukraine war, a record MCP value of 3850.59 TL/MWh was observed. As a generalization, more expensive prices in the summer months due to the increase in electricity demand, average levels in the fall and winter months, and cheaper prices in the spring months.
Why is MCP Forecasting Important?
Consumers, Utilizing MCP forecastingcan shift their operations from high-cost periods to low-cost periods and thus reduce their energy costs. In addition, it allows them to plan their budgets more effectively.
By forecasting prices with MCP forecasting, producers can effectively manage their costs and create strategic plans, allowing them to increase their profitability. At the same time, they can minimize risks by taking precautions against price fluctuations. Therefore, a more sustainable energy production is also ensured through more efficient use of resources.
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