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This article considers the use of financial transmission rights for managing electricity provision on a power grid. The use of a sub-grid of hubs for dealing in these products is explored. Some suitable approaches to this practice are outlined. These identify the feasible size of sub-grid and locate additional constraints.   References W. W. Hogan, Contract networks for electric power transmission, J. Regulatory Economics 4 (1992), 211--242. doi:10.1007/BF00133621 A. B. Philpott and G. Pritchard, Financial transmission rights in convex pool markets, Oper. Res. Letters , 32 (2004), 109--113. doi:10.1016/j.orl.2003.06.002

A simplified financial transmission rights auction in the context of the New Zealand electricity grid