Day-Ahead Market — How clearing works

Day-ahead market clearing diagram with red supply offers, green demand bids, and an orange clearing point on aggregated curves.

Generators offer blocks of energy at rising prices. Buyers bid blocks at falling prices. Where the two curves meet, a single price clears the auction — every accepted bid pays it.

Generators submit step offers

Each unit posts a price–quantity block: how much it will produce and the minimum price it needs.

Buyers submit step bids

Suppliers and consumers post the volume they want and the maximum price they are willing to pay.

Curves stack low-to-high vs. high-to-low

Offers sort ascending in price; bids sort descending. Cumulative quantity builds two staircase curves.

The crossing point sets the price

Where supply and demand intersect defines cleared volume and a single uniform clearing price.

All accepted bids settle uniformly

Every cleared block is paid the marginal price — even cheap offers and high bids transact at the same number.