Evans, LewisCounsell, Kevin2015-02-112022-07-062015-02-112022-07-0622/08/20032003https://ir.wgtn.ac.nz/handle/123456789/18981In this paper we explain the operation and design of day-ahead markets in an electricity market. Day-ahead markets complement real-time markets which must be run to ensure balance in the system and offer a number of benefits to electricity market participants. We argue that in the context of the New Zealand electricity market the benefits of operating a day-ahead market are likely to outweigh the costs. We show that simple forecasts suggest day-ahead prices in New Zealand would be considerably less volatile than real-time prices. As day-ahead markets are effectively hedge markets for a short time period the issues we raise are also important for the operation and development of other longer-term hedge markets.pdfen-NZPermission to publish research outputs of the New Zealand Institute for the Study of Competition and Regulation has been granted to the Victoria University of Wellington Library. Refer to the permission letter in record: https://ir.wgtn.ac.nz/handle/123456789/18870electricityday-ahead marketText