Continuous Clearing

Learning objectives

By the end of this lesson you should be able to:

Understand what is meant by continuous market clearing.
Explain how continuous clearing differs from periodic market clearing.
Recognise the advantages of processing requests as they arrive.
Appreciate the role of continuously updated system state in supporting continuous clearing.
Understand why continuous clearing is well suited to increasingly dynamic electricity systems.

Introduction

Many electricity markets operate using predefined market intervals.

Participants submit bids before a specified deadline.

Once the deadline has passed, the market determines the allocation for that trading period.

The process is then repeated for the next interval.

An alternative approach is to remove the requirement to wait for predefined clearing times.

Instead, the market evaluates requests whenever they arrive.

This is known as continuous clearing.

Periodic market clearing

Traditional market clearing can be viewed as a repeating sequence of events:

Participants submit requests.
The market waits until the submission deadline.
All requests are considered together.
Allocations are determined.
The process repeats at the next market interval.

This approach has many advantages.

Participants know when markets will clear.

Large numbers of requests can be considered together.

The process is relatively straightforward to administer.

Continuous clearing

Continuous clearing takes a different approach.

Rather than waiting until a market interval ends, requests are evaluated whenever they arrive.

Each new request is considered using the current state of the electricity system.

If accepted, the allocation is updated immediately and the system state changes accordingly.

The market therefore operates as a continuously evolving allocation process.

A simple example

Imagine a consumer wishes to charge an electric vehicle.

In a periodic market, the request may wait until the next scheduled market clearing before being considered.

In a continuously clearing market, the request can be evaluated immediately using the latest information about:

available generation,
network capacity,
existing commitments,
other active requests.

The allocation is then incorporated into the evolving system state before the next request arrives.

Decisions as a sequence

Continuous clearing treats the market as a sequence of individual allocation decisions.

Each request:

observes the current system state,
is evaluated,
updates the allocation,
modifies the system state.

The next request is then evaluated using this updated information.

The market therefore evolves continuously as participation changes.

Responding to changing conditions

Electricity systems are constantly changing.

Demand rises and falls.

Renewable generation varies with the weather.

Storage charges and discharges.

Consumers connect and disconnect flexible devices.

Continuous clearing allows market decisions to evolve alongside these changing conditions rather than waiting for the next predefined market interval.

Why continuous clearing?

Several factors motivate continuous clearing.

These include:

increasing numbers of distributed resources,
more frequent consumer participation,
improving digital communications,
greater computational capability,
continuously changing operating conditions.

As electricity systems become more dynamic, there may be advantages in allowing allocation decisions to evolve continuously as well.

Coordination through continuous updates

Continuous clearing relies on the stateful allocation mechanism introduced in the previous lesson.

Because the market continuously maintains the current system state, every new request can be evaluated using the latest available information.

This allows allocation decisions to build naturally upon one another without requiring the market to wait for the next clearing interval.

Continuous does not mean uncontrolled

Continuous clearing does not imply that every physical device changes its behaviour continuously.

Electricity systems still require stable operation and predictable schedules.

Instead, continuous clearing refers to the process by which requests are evaluated and incorporated into the evolving market state.

Physical actions continue to occur according to the operational requirements of the electricity system and the characteristics of individual devices.

Modern digital systems

Many digital platforms already operate continuously.

Examples include:

financial exchanges,
online booking systems,
cloud computing platforms,
internet routing.

These systems continually process new requests while maintaining an up-to-date view of available resources.

Continuous clearing applies a similar principle to the coordination of electricity resources.

Building towards an integrated market

Continuous clearing changes the rhythm of market operation.

Instead of alternating between periods of activity and waiting, the market continually adapts as new requests arrive.

Combined with a continuously maintained system state, this provides the foundation for more integrated coordination of electricity resources.

The following lessons build on this foundation by considering how each allocation can also respect the physical limitations of the electricity network.

A key insight

Continuous clearing allows allocation decisions to be made whenever new requests arrive rather than only at predefined market intervals.

By continuously updating the system state after each allocation, the market evolves alongside the changing condition of the electricity system.

Key takeaways

Continuous clearing evaluates requests as they arrive rather than waiting for predefined market intervals.
Each allocation updates the evolving state of the electricity system.
Continuous clearing builds upon the stateful allocation mechanism introduced in the previous lesson.
The approach enables market decisions to adapt continuously as operating conditions change.
Continuous clearing refers to continuous decision-making rather than continuous physical control.
Modern digital technologies make continuous coordination increasingly practical.

Looking ahead

Continuous clearing determines when allocation decisions are made.

The next lesson examines how those decisions can remain physically feasible by incorporating the operational limits of the electricity network directly into the allocation process.