Abstract
As many authors have observed, the allocation of scarce transmission capacity presents a major market design challenge. The electric power system is subject to generation and transmission technology constraints that make it difficult to define tradable property rights for physical transmission. This difficulty has led economists to instead create markets for financial transmission rights (FTRs) settled against the congestion price component of locational marginal prices (LMPs) (Hogan 1992). This market structure has been increasingly adopted in the United States and other countries.
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- 1.
http://www.nyiso.com/public/about_nyiso/understanding_the_markets/financial_markets/. Accessed 17 Sept 2011.
- 2.
These data sets includes Day-Ahead congestion prices, TCC auction bids and TCC auction results for over 9,000 FTRs as obtained from the NYISO website.
- 3.
The “source zone” is the zone in which the POI is located and “sink zone” is the zone in which the corresponding POW for the FTR is located.
- 4.
For a counterflow FTR, the winning bidder is paid to take the FTR but has the obligation to pay congestion rents to the TSO. Counterflow FTRs are sold in the same auctions as positive FTRs.
- 5.
Significant parts of the New York City transmission grid are operated to a higher reliability standard than the rest of the New York market: using an N-2 criterion rather than the usual N-1 standard (NYISO 2008).
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© 2013 Springer-Verlag London
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Adamson, S., Parker, G. (2013). Participation and Efficiency in the New York Financial Transmission Rights Markets. In: Rosellón, J., Kristiansen, T. (eds) Financial Transmission Rights. Lecture Notes in Energy, vol 7. Springer, London. https://doi.org/10.1007/978-1-4471-4787-9_12
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DOI: https://doi.org/10.1007/978-1-4471-4787-9_12
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