Open AccessA Review of Price Risk Management in PJM and Nord Pool Electricity Market
Author(s) -
Ning Wang,
Wei Zheng,
Hao Chen,
Teng Tu,
Yang Yang,
Yi Ding
Publication year - 2019
Publication title -
iop conference series. materials science and engineering
Language(s) - English
Resource type - Journals
eISSN - 1757-899X
pISSN - 1757-8981
DOI - 10.1088/1757-899x/486/1/012156
Subject(s) - electricity market , speculation , risk management , futures contract , hedge , business , futures market , arbitrage , revenue , price risk , market risk , derivatives market , forward contract , electricity , industrial organization , finance , engineering , ecology , electrical engineering , biology
Market participants and system operators are faced with price risks caused by various factors, such as congestions or market power abuse. Therefore, the price risk management in deregulated market environment is of great importance. In this paper, various risk-hedge financial instruments in PJM and Nord Pool, such as FTRs, futures, forwards and CFDs are investigated. These risk management mechanisms can be further utilized for congestion revenue allocation, speculation or arbitrage under different market circumstances.