Falsehoods About Time in Energy Trading
With Daylight Savings Time starting soon, we've been thinking a lot about time.
At Molecule, we do a lot with power. Which means we do a lot with time zones and hours-of-the-day, and even hours in a day, which – in case you didn't know – varies twice a year, and on a different day in the US and Europe. (Yep, we're talking about the daylight savings time switchover days).
Our lead engineer brought this readme to our marketing team's attention. It reminds me of the hours spent agonizing over the minutiae of time zones, with regards to energy markets. It's worth a read, and I'd like to add a few more Falsehoods About Time:
- Hour-Ending fits in a date data type
- Power market operators choose time zones based on easy, constant differentials from UTC
- Power market operators always choose time zones that line up with their geography
- Power markets span single time zones
- The DST switchover day is the same in every country
- States and municipalities never change their minds about which time zone to be in, when.
Time is just plain hard!
There might be people who believe that we're overcomplicating things with all of these concerns. (Honestly, we originally had some of those concerns as well!). But a key takeaway is, on the day of the DST changeover in a locale – we call that the DST transition day – someone needs to put an hour extra worth of coal in the generator. Or an hour less.
Power itself is complicated to trade. There are myriad contract types and prices across seven ISOs in the US alone. Power itself is complicated post-trade when operations teams have to perfectly balance the grid's supply and demand. And, things are getting more complicated as we introduce more and more types of power like renewables.
So, properly handling time is crucial ETRM functionality, and over-thinking it is absolutely called for when trading power. 1.21 gigawatts/plutonium won't solve this time conundrum, but thoughtful coding and attention to detail will.
