The Wholesale Electricity Market (101)
Written by: Maya Ardon
Edited by: Vanessa Lu Langley
The wholesale electricity market is where energy companies buy large amounts of electricity at a cheaper price, and then resell the electricity in smaller amounts (and potentially higher prices) to customers. In other words, in this type of market, electricity is initially sold and produced to suppliers on the wholesale level. Then, those suppliers distribute and sell to regular consumers on the retail level (ISO New England). Under this market framework, it happens that electricity is actually bought and sold a number of times after its production at a power plant before it reaches the final consumer (for example, the household) (European Commission).
Wholesale vs. Retail Electricity Costs. ISO New England. (n.d.). Retrieved February 15, 2022, from https://www.iso-ne.com/about/what-we-do/in-depth/wholesale-vs-retail-electricity-costs
General market framework. European Commission – Energy. (n.d.). Retrieved February 15, 2022, from https://energy.ec.europa.eu/topics/markets-and-consumers/wholesale-energy-market/general-market-framework_en