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.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 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).
References
Adamson S, Englander S (2005) Efficiency of New York transmission congestion contract auctions. In: Proceedings of the 38th Hawaiian international conference on system sciences, HICSS-38, Big Island
Adamson S, Noe T, Parker G (2010) Efficiency of financial transmission rights markets in centrally coordinated periodic auctions. Energy Econ 32:771–778
Argote L (1999) Organizational learning: creating, retaining and transferring knowledge. Kluwer, Norwell
Corrado CJ, Su T (1996) Skewness and Kurtosis in S&P 500 index returns implied by option prices. J Financ Res 19:175–192
Deng S, Oren S, Meliopoulos S (2004) The inherent inefficiency of the point-to-point congestion revenue right auction. In: Proceedings of the 37th Hawaii international conference on systems sciences, Big Island
Engel C (1996) The forward discount anomaly and the risk premium: a survey of recent evidence. J Empir Finance 3:123–192
Hadsell L, Shawky H (2009) Efficiency and profit in the NYISO transmission congestion contract market. Electr J 22:47–57
Hogan W (1992) Contract networks for electric power transmission. J Regul Econ 4:211–242
Huber P (1964) Robust estimation of a location parameter. Ann Math Stat 35:73–101
New York ISO (2008) Transmission and dispatching operation manual. Available from www.nyiso.com. Accessed October 23, 2012
SiddiquI A, Bartholomew E, Marnay C, Oren S (2005) On the efficiency of the New York independent system operator market for transmission congestion contracts. J Manag Finance 31:1–45
White H (1980) A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica 48:817–838
Wright TP (1936) Learning curve. J Aeronaut Sci 3:122–128
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2013 Springer-Verlag London
About this chapter
Cite this chapter
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
Download citation
DOI: https://doi.org/10.1007/978-1-4471-4787-9_12
Published:
Publisher Name: Springer, London
Print ISBN: 978-1-4471-4786-2
Online ISBN: 978-1-4471-4787-9
eBook Packages: EnergyEnergy (R0)