What is a key difference between "real-time" and "day-ahead" markets in PJM?

The distinction between "real-time" and "day-ahead" markets in PJM centers around the timing and purpose of each market. Real-time markets are designed for immediate and dynamic adjustments to power supply and demand, reflecting the actual conditions and needs of the grid at the moment power is delivered. This means that any unexpected fluctuations in demand or generation can be accommodated quickly, allowing for more responsive management of the electrical grid.

In contrast, day-ahead markets are focused on the scheduling and commitment of resources for the following day. Participants in these markets submit their expected supply and demand levels, and the market clears based on these projections. This allows for more planned and efficient use of generation resources, catering to anticipated needs rather than reacting to real-time changes.

This fundamental difference is crucial for grid reliability and economic efficiency, ensuring that both volatility and predictability are effectively managed. The other options do not accurately capture the primary functions of the respective markets.