SSE reports that it is to introduce a new and transparent approach to the management of its electricity supply and demand requirements. The company plans to phase in the auction of all of its electricity supply and purchase all of its electricity demand in the day-ahead market. SSE says that by selling its total supply of electricity and buying its total electricity demand simultaneously in the day-ahead auction, it will 'significantly improve the liquidity, depth and credibility of the market and assist in the creation of a robust and tangible pricing index'.Currently, the UK day-ahead electricity market trades volumes of around 40 GWh/d - with a further 200 GWh through brokered markets. These volumes compare unfavourably with markets such as Germany andNordpool, which clear between 500 GWh and 750 GWh daily. While SSE and other companies have been seeking to improve liquidity in the wholesale electricity market, Ofgem has stated that more needs to be done to increase the traded volumes. SSE's average daily demand volume is around 165 GWh, which means that its move to gross trading will transform the day-ahead auction market.
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