Abstract
The prevalent market mechanism for defining transmission rights in North American restructured electricity markets is through financial instruments that enable energy traders to hedge congestion risk. The underlying quantities for such instruments are either Locational Marginal Prices (LMP) or shadow prices on transmission flowgates which are determined as part of an Optimal Power Flow (OPF) calculation. There are three prevalent forms of financial transmission rights whose settlements are based on the above underlying quantities:
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References
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Acknowledgement
This chapter is intended as a tutorial and review of previous work. Much of the text and most of the figures used are adopted from a joint conference paper with Kory Hedman, published online in the proceeding for the IREP 2010 symposium Oren and Hedman (2010). I also adopted material, especially the example in Fig. 3.1, that was developed by Fernando Alvarado as part of a tutorial we jointly presented on financial transmission rights in the year 2000. This work was supported by the National Science Foundation Grant IIP-0969016 and by the Power Systems Engineering Research Center.
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© 2013 Springer-Verlag London
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Oren, S.S. (2013). Point to Point and Flow-Based Financial Transmission Rights: Revenue Adequacy and Performance Incentives. 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_3
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DOI: https://doi.org/10.1007/978-1-4471-4787-9_3
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