Abstract
The problem of trading FTRs can be understood as one of decision making under uncertainties, where the boundary conditions are set by the laws of physics that govern the electric power flows. Under this setup, a typical FTR desk has to deal not only with standard roles of trading financial products, but also with technical ones of power analytics. Building and operating a successful FTR business is a complex enterprise, with multiple factors to consider. Additionally, the still exotic nature of the product makes standard solutions from the trading industry difficult to use. Accordingly, this chapter describes some of the challenges we currently face while trading FTRs in the US, covering three aspects of the business.
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Acknowledgements
The Author would like to thank Dr. Carlos Larisson from UNSJ and Dr. Fernando Olsina from CONICET and UNSJ for reviewing early versions of this chapter and for their constructive suggestions. However, the Author is the only responsible for errors that may have occurred.
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Arce, J. (2013). Trading FTRs: Real Life Challenges. 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_11
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DOI: https://doi.org/10.1007/978-1-4471-4787-9_11
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