The effects of precise day-ahead forecasts on 15-minute energy trading

Energy trading has always relied on anticipating what supply and demand will look like the next day. As renewables expand, the uncertainty grows. Wind and solar output can change sharply within minutes, and these shifts now shape day-ahead prices in a more direct way. The transition to 15-minute trading intervals in Europe highlights the value of forecasts that are not only accurate, but also aligned with the temporal and spatial granularity of the market itself.

From hourly to 15-minute markets

Until recently, most day-ahead power auctions in Europe operated with hourly blocks. That changed in October 2025, when 15-minute market time units (MTUs) became standard across nearly all bidding zones. This structural shift created four price points per hour, exposing volatility that was previously hidden within hourly averages.

For traders, producers, and grid operators, this is both an opportunity and a risk. Prices now react faster to sudden ramps in generation or demand, and imbalance costs can accumulate more quickly. Forecasting errors that might have been absorbed at hourly resolution now translate directly into trading losses or costly balancing actions.

Why precision matters

In this new framework, precision forecasting is no longer optional. Market participants need to anticipate fluctuations at the same temporal resolution as the market itself. That means 15-minute updates and location-specific detail. Coarser models, which smooth over local weather patterns, miss the signals that drive intraday volatility.

High-resolution models that deliver forecasts at 1 km spatial scale and 15-minute steps for up to 48 hours ahead bring several advantages:

• Better alignment with market units: Forecasts that natively produce 15-minute intervals avoid the need for interpolation, reducing errors.
• Site-level relevance: Energy output can vary sharply across short distances. Capturing local wind ramps or fast-moving cloud cover means forecasts reflect what actually happens at farm or turbine scale.
• Reduced imbalance exposure: More accurate volume predictions lower the likelihood of being caught short or long in the market.

For trading desks, these improvements translate into tighter bids and fewer unexpected balancing costs. For grid operators, they reduce the strain on reserves and balancing services.

Impacts on trading strategies

Precise day-ahead forecasts change how trading desks operate. With better visibility, traders can:

• Adjust bids dynamically to reflect expected ramps in wind or solar output.
• Capture value from short-term volatility rather than being penalized by it.
• Optimize cross-border trading by anticipating regional differences in renewable generation.

The shift also accelerates the need for automation. Sub-hourly trading windows leave less time for manual intervention. Forecast data that integrates directly into trading systems enables faster and more consistent decision-making.

Grid stability and market efficiency

Forecast precision is not only about improving trading results. It also plays a role in system stability. When forecasts align more closely with actual generation, transmission system operators face fewer unexpected imbalances. That reduces reliance on expensive balancing reserves and supports more efficient price formation.

In markets with high renewable penetration, this effect is significant. Solar ramps at sunrise and sunset, or sudden wind drops, are less disruptive when they are anticipated with accuracy. The system becomes less dependent on last-minute interventions and more capable of integrating variable generation smoothly.

Looking ahead

Even with the shift to 15-minute markets, challenges remain. Intraday volatility can still emerge within these short windows, and discussions about moving toward 5-minute intervals are already underway. Whatever the next step, the trajectory is clear: markets will demand higher granularity, and forecasts will need to keep pace.

For now, high-resolution day-ahead forecasting with 15-minute and 1-km resolution represents a critical enabler. It allows energy traders, producers, and grid operators to manage risk more effectively, reduce imbalance costs, and make the most of renewable integration.

Conclusion

The day-ahead market is becoming more sensitive to short-term weather dynamics. Those who invest in precise, high-resolution forecasts gain not just a competitive edge in trading, but also contribute to a more balanced and efficient grid. Precision is no longer a luxury—it is part of the core infrastructure of modern energy markets.