How NESO's Day-Ahead Auction Works, and How to Read Its Results

One auction, twelve products

Every day, the National Energy System Operator (NESO) runs a single day-ahead auction to buy the services that keep the GB grid stable through the following day. It is called the Enduring Auction Capability (EAC), and it clears at 14:00 UK time, with results usually published about an hour later.

The auction buys twelve products: six that respond to frequency automatically, and six that hold capacity in reserve.

Low and positive mean adding power (or cutting demand) when the system is short. High and negative mean taking power off the system when it is long. They are bought separately because they are different jobs: a battery that is full can't absorb more energy, and one that is empty can't discharge.

What NESO actually pays for

The EAC buys availability. A winning provider is paid a price in £ per MW per hour for every MW it keeps ready during the window it won. For response, energy actually delivered is not paid for separately. That is why one product, Dynamic Regulation High, regularly clears below zero (we explained why here).

The day is cut into service windows, so each product is effectively traded as a series of separate markets: Dynamic Containment Low from 23:00 to 03:00 is one market, and the same product from 03:00 to 07:00 is another.

How providers bid

A provider doesn't submit one price per product. It submits baskets: bundles of offers that say, in effect, "this unit can do X MW of this product in this window at this price, and here is what else it could do instead."

Baskets let a provider express the real constraints of its kit:

• One unit, one job at a time. The same MW can't be sold twice for overlapping windows, so the auction never accepts conflicting baskets from one unit.
• All or nothing. Baskets can be looped together, so that they are accepted or rejected as a group.
• Parent and child offers. A core offer can carry optional extras that are only accepted if the core one is.
• Consecutive runs. Some Slow Reserve offers only make sense as an unbroken run of windows at a steady volume.

NESO, in turn, submits its own buy orders: how much of each product it wants in each window, and the most it is willing to pay.

How the auction picks winners and sets the price

The clearing algorithm, built by N-SIDE, works in two stages.

1. Choose the winners. It picks the combination of offers that maximises total value: what NESO's accepted buy orders are worth, minus what the accepted offers cost, while respecting every basket rule above.
2. Set the prices. For each product in each window, it then finds a single clearing price, as low as possible while making sure no accepted offer is paid less than it asked for.

Everyone accepted in that product and window is paid the same price: the clearing price, not their own bid. That is called pay-as-clear.

This has a counter-intuitive consequence. An offer priced below the clearing price can still be rejected. If accepting it would force the auction to take another part of the same basket at a loss, or break an all-or-nothing link, the whole basket goes. NESO's results label these rejections with reason codes. GridHz's auction pages translate them into plain English and estimate the price a rejected offer would have needed to clear.

What the results look like

Across the 30 auctions for delivery between 16 September and 15 October 2026:

• Daily cost: NESO spent about £865,000 per day on average, from £421,000 on the cheapest day to £2.68 million on the most expensive.
• Dynamic Containment is the volume product, at roughly 1,500 MW each side. It averaged £3.36/MW/h for DCH and £5.77/MW/h for DCL.
• Dynamic Regulation is the widest spread. DRL averaged £20.35/MW/h, the dearest product in the auction, while DRH averaged −£8.57/MW/h: providers paid NESO to provide it.
• Slow Reserve is the largest reserve product, at about 1,800 MW of positive Slow Reserve.
• Batteries won 97.5% of all response MWh, and 70% of Quick Reserve. Slow and Balancing Reserve went mainly to gas reciprocating engines and open-cycle gas turbines (about two-thirds of Slow Reserve and seven-eighths of Balancing Reserve).

Who set the price?

With pay-as-clear pricing, one offer is usually marginal: the last one accepted, whose bid sets the price for everyone else in that window. Sometimes nobody's offer sets it. The price can be set by NESO's own buy order (its willingness to pay), or pinned at a cap or floor.

GridHz works out which it was for every window, using NESO's published selection and holding every other offer fixed. For each day it shows:

• who set each product's price, and whether that is unusual
• how much offered volume sat just above the clearing price, a sign of how much a price could move tomorrow
• which providers won, and how their share is changing

Key takeaways

• The EAC is one daily, day-ahead auction for twelve response and reserve products, cleared at 14:00 UK time.
• Providers are paid for availability in £/MW/h, at a single pay-as-clear price per product and window.
• Bids are baskets with real-world constraints, which is why a cheap offer can still lose.
• Response is almost entirely won by batteries; Slow and Balancing Reserve still lean on gas engines and turbines.
• The latest results, price-setters and winners are on GridHz every day, and the daily email below lands minutes after NESO publishes.