Market Ontology

What the ontology maps

The market ontology is the structured backbone behind everything on MarketDesign.ai. It records the entities that make up an electricity market — the markets themselves, the products they trade, the timeframes they clear in, the algorithms that clear them, the institutions and system operators that run them, the regulations and network codes that govern them, and the bidding zones they cover — together with the relationships between those entities: which market is governed by which rule, runs on which algorithm, offers which product, and is operated by whom. Every regulatory development the monitor follows is linked back to this map, so a decision about, say, balancing energy is filed against the balancing market, its platform, and the guideline that shapes it.

The six market families

Wholesale energy is the core: power is traded forward (years to a day ahead, for hedging and long-term transmission rights), in the day-ahead auction that sets the reference price, and continuously in the intraday market up to close to real time. Balancing and real-time markets then keep supply and demand matched second by second, procuring reserves and activating balancing energy on shared European platforms. Adequacy and capacity mechanisms secure enough firm capacity for the years ahead. Flexibility markets value the ability to shift consumption and generation, increasingly at the distribution level. Guarantees of origin certify the source of electricity, and carbon markets — the EU Emissions Trading System in Europe, cap-and-trade and RGGI in the United States — price the emissions that generation causes.

The legal and institutional backbone

In Europe these families sit on one legal framework. The Electricity Regulation and its network codes and guidelines — on capacity allocation and congestion management, electricity balancing, system operation and forward capacity allocation — set the rules; ENTSO-E develops them, the national regulators and ACER approve them, and the transmission system operators and nominated electricity market operators (the power exchanges) put them into practice. The same entity types appear in every country, which is what makes the model comparable across borders.

Europe and the United States

The ontology covers two market architectures. Europe is zonal: prices are set for whole bidding zones and cross-zonal capacity is allocated between them. The United States is nodal: energy clears at locational marginal prices at thousands of individual nodes, in day-ahead and real-time markets run by the ISOs and RTOs, with capacity, ancillary services and financial transmission rights alongside. FERC regulates the interstate markets under the Federal Power Act, NERC sets mandatory reliability standards, an independent market monitor watches each system, and Texas (ERCOT, under the PUCT) is the intrastate exception. Switch between the two regions and pick a country or ISO below to see the market design that applies there.

Six market families sit on one legal and institutional backbone. Wholesale energy clears across the day-ahead, intraday and forward timeframes; balancing runs in real time on the European platforms; and capacity, flexibility, guarantees of origin and carbon each add their own design. All of it is governed by the Electricity Regulation and its network codes, developed by ENTSO-E, approved by ACER, and operated by the exchanges and system operators. Pick a country to see the market design that applies there.