Many clients are asking whether the market is at a fundamental low. This often involves the question can we model the market can we assess if the market is going to go any lower.

GOAL (Grid operator Algoithm) was used in the nineties to schedule for "The Pool" it was a sophisticated piece of computing and scheduled plant based on run up rates, bidding costs, and capacity. By matching all the available gensets against potential demand in any one half hour. This model was recreated by various users to try and ascertain what the price would be and then this could be used for trading on the day-ahead. Of course the problem with this is that not all the people had all the information, and players would often have to guess whether the market was responding to returning plant, a greater predicter of weather or just general sentiment.

The likes of Enron appeared to be very good at predicting the market price for day-ahead. In reality they traded with enough of the incumbent players to get a good view of what everyone thought. If N Power and Powergen were buyers then the likelihood was that some of their plant was out of action and they would therefore, front run these decisions.