Asks and bids include a specific set of characteristics. On the ask side, these characteristics are defined by seller’s price expectations and the underlying Energy Attribute Certificates and bids, while for bids they are solely defined by the buyer’s requirements. The criteria that the matching engine takes into account are:
- Device Type
- Device Vintage
- Location/Grid region
- Generation time frame
The price specified by the seller is the asking price per EAC. This price will be the clearing price if a bid is matched with the ask. The buyer defines a maximum price, meaning the highest price per EAC the buyer is willing to pay. Two orders match if the ask price is smaller or equal to the bids defined maximum price. The price field is required and there is no way to specify a bid with “any” price. But users can, of course, choose to look at the Exchange and specify a bid price that is higher than all currently existing bids.
The device type of the generation device can have a significant impact on the value of the EAC to the buyer based on the buyer’s preferences. An MWh of green electricity that was generated by a new rooftop solar device is valued quite differently to an MWh from a big hydropower plant.
There are many different device types, which each form device type groups with multiple levels. An example would be “wind” as the highest level device type, with “wind onshore” and “wind offshore” as children device types. Even though the exact notation of the device types depends on the EAC standard, they all follow this structure. It should be noted that the device type that is specified in the ask always has to be of the lowest level, as the information is taken from the actual generation device. A wind turbine e.g. never is only of device type “wind” but is either onshore or offshore depending on its location. The device type specified in the bid, on the other hand, can be of every device type level depending on the requirements of the buyer.
Two orders are matched if the required device type in the bid is of the same device type group of a level higher or equal to the device type of the ask. Going back to the wind example, a bid with the device type “wind” will match with all device types of that device type group, as “wind” is the highest level. It will match with both onshore and offshore asks. A bid with “wind onshore” will only match with onshore and not offshore. If no device type is specified this is counted as “any” which means that all device types are matched and device type is not a characteristic that limits the order matching.
The device vintage describes the commercial operation date of the generation device. Many buyers prefer newly installed devices to older ones. Two orders are matched if the asks vintage year is in the vintage time frame specified in the bid. A bid with a device vintage of 2015 or newer will e.g. match with all asks that have a device vintage of including 2015 until now. If not specified “any” device vintage does not restrict the vintage year.
The location, and especially the distribution grid region where the generation device is connected, has a big influence on the physical energy mix that is consumed. Some buyers want to support renewable energy projects in their region to increase the percentage of green electricity that was physically delivered to their facilities. Selectable regions depend on the location where Exchange services are offered. Depending on the area of offering, regions can have multiple levels. In the example of grid regions, there might be multiple transmission grids with multiple lower-level distribution grids connected to it. Some large hydro plants might be connected to the transmission grid while most other generation devices are connected to the distribution grid level. Two orders are matched if the region specified in the bid is the same or a higher level of the region as in the ask. A bid with “transmission grid A” e.g. matches with all asks with devices that are connected to transmission grid A and all distribution grids that are connected to A. A bid with “distribution grid X” will only match with asks with this distribution region. If not specified, “any” region does not restrict the location of the generation device.
Generation time frame
To ensure that the grid mix at the time of electricity consumption is as green as possible, buyers might want to choose EACs with a generation time frame that matches the consumption time. Buying wind EACs with generation times in winter (when there is traditionally a lot of wind) for consumption that happened in the summer will for example not reflect the price of wind energy at the time of consumption very well. Two orders are matched if the generation time of the ask is in the range specified in the bid. An ask with the generation time of July 2020 is for example matched with a bid with a specified generation time range of Jan 2020 to Dec 2020. If not specified, “any” generation time does not restrict the time frame of the EAC. It should be noted that some standards limit the lifetime of an EAC and invalidate them after some time.