I'm a homeowner. I run a manufacturing plant and am working with a power marketer for purchasing my power. But I want to have some of my power from green sources. It's a central marketplace where buyers and sellers come together to trade energy and energy-related products. Power exchanges work like those for stocks and physical commodities.
Participants can view the prices for many different products and then make a buy or sell decision.
Orders are passed into the marketplace, where they are automatically matched when a suitable counterparty is found. Power exchanges provide the marketplace where energy transmission and physical capacity can be bought and sold as commodities. Searching out suitable counterparties independently can be a time-consuming and inefficient process. In a power exchange, an array of parties and products is made available to you. With forward pricing, you can see what the prices will be before you complete a transaction.