A buy order is a bid placed by a market participant on a connected trading platform, with the intent to purchase electricity. Buy orders are part of the redispatch process, in which market participants are invited through a market message to submit buy and sell orders to help resolve intraday congestion situations.
For congestion situations expected to occur within 24 hours (intraday), a market message is sent out to request flexibility bids. These consist of buy and sell orders, placed on one of the connected trading platforms. With a buy order, a market participant offers to consume more electricity (or generate less) than originally planned. The electricity to be consumed is requested (purchased) in kilowatts (kW) or megawatts (MW) at a bid price determined by the market participant.
If the GOPACS algorithm is able to match a buy order with a corresponding sell order that together resolve the congestion situation, the highest bid price will be selected and the buy order will be executed.
If more electricity is consumed, it naturally needs to be purchased. But why must electricity also be purchased when generation is reduced? Here’s why: a generator typically sells electricity in advance of actual production. This comes with a delivery obligation — the electricity must still be delivered. If the generator reduces output to help resolve a congestion situation, it risks not meeting this delivery. To comply, the generator must buy electricity elsewhere (using a buy order). If the newly purchased electricity is cheaper than the original selling price, this may result in a financial benefit.
In the case of generation congestion, more electricity must be exported from the area than the local grid can safely handle. Substations that connect the area to the medium or high-voltage grid are overloaded. In such cases, a market message will request buy orders, encouraging local consumers to increase consumption or reduce generation — meaning less electricity needs to leave the area. Each local buy order must be paired with a non-local sell order to maintain balance on the grid.
Conversely, in a consumption congestion situation, more electricity must be imported into the congestion area than the grid can safely handle. In this case, sell orders are requested within the congestion area: either by reducing consumption or increasing generation. This helps reduce the need to import electricity into the area. These local sell orders are then paired with non-local buy orders.
| Generation Congestion | Consumption Congestion | |
|---|---|---|
| Situation | Too much electricity in the congestion area | Too little electricity in the congestion area |
| Consequence | More electricity must leave the area than can be safely transported | More electricity must enter the area than can be safely transported |
| Desired action | Reduce generation or increase consumption | Reduce consumption or increase generation |
| Inside congestion area | Buy orders | Sell orders |
| Outside congestion area | Sell orders | Buy orders |
