Are Energy Traders Interested In Real-Time Grid Data?

Not really - frequency data concerns the ultra fine-tuning of supply and demand that is handled by the respective grid operators. Grid operators will call on operators at power plants that have sold spare capacity to ramp-up/ramp-down production to keep frequency in a desirable range. However, most energy traders are have no position going in to real-time, and can find all the supply and demand data they need after the fact.

Thanks Willd for your fast reply!

Can anybody else add something?

more information is always better, but at what cost?

Good question Packmate. Do Traders usually buy external data? What is the rough price range if they do so?

Well based on what you've said, it seems like a disruptive product that you would be selling. I'm no electricity trader, but more information is always better. How difficult are the barriers to entering a market like this? How large would the initial investment be into creating this data? I read about a similar market data provider that attempts to scan incoming oil ships into the US to try and anticipate supply before they reach shore. I'm sure you would be able to find customers, but you should probably do some market research with some energy traders or CTAs.

The initial Investment would be around 3000€ for the hardware. Since I come from a technical background my domain knowledge in energy trading is unfortunately very limited. Do you still remember the name of the data vendor you read about?

I'm not familiar with the European power markets, but frequency and/or area control error (ACE) is often published by the ISOs in the North American power markets. This being said, if it is not publicly available currently, your service could do well as a sudden drop in frequency usually indicates a unit trip.

In the North American power markets, there's a service called Genscape that offers real time monitoring of plant outputs and also provides alerts on frequency events. They also have a product called EU Power RT which I have never used but can only assume it's the same as the North American version just with data on the European markets.

Feel free to PM me if you have any other questions.

Thanks YYCTrader. I will check out Genscape. Would be interesting to know what the price of their service is.

It's not cheap. I have sat in on those meetings when they come to try to sell us more products.

I don't even look at it cause who ever is managing the unit will show the market the drop in power

UniPaul, You are correct that the frequency (ACE) shows the current variance in supply to the grid. In the United States, the standard is 60 hertz. When a grid is operating under 60 hz, it means there is a deficiency in supply, which sends a signal to generators to ramp up. Conversely, when the ACE is over 60 hz, it means there is an oversupply. (Interesting fact: your clock that is attached to the wall is set by the hertz on the grid. When there is too much supply on the grid, your clock will become fast.When the country performs a "time correct" on your clock, they control it with the frequency of the grid.)

Anyway, the frequency on the grid is typically a very accessible piece of information. With PJM, you can get a Real-Time feed of it through the eData application. It updates on a bit of a lag for public users, but if you are a member of PJM, you can get a 2-second lag of it through eData-Feed. In fact, all companies that have generators have real-time feeds of this information, as it is obviously very important to their operation of their generator. There was actually a law suit/investigation a few years ago in PJM that alleged that certain market participants were getting these feeds milliseconds ahead of other people, and were able to make trades based on that knowledge.

Even if you have quicker access to this information, it will be of no value if you are trading within the ISO. By that I mean you are doing virtual trading/FTR/Up-To-Congestion bids. These are placed in the Day-Ahead Market, and can not be altered after the Day-Ahead Market clears, so the real-time feed of information would be of no importance. However, if you ARE trading on NYMEX/ICE, this information could definitely be useful. If you see a sudden decline in the ACE (a unit tripping, indicating a shortage of supply), this would signal higher prices. You would then use that information to go long on a NYMEX/ICE contract, as the future prices may potentially be higher. But, like I said, most of this information is already accessible from multiple sources.

I have actually written multiple programs to scrape a lot of publicly available ISO data, and have started to develop a website that would display this information for free (trying to mimic something like Google Finance)... Genscape is very useful, but is expensive, and would not entirely trust their data. I used to work at PJM, so I used to check our actual data versus what they reported, and many of the times it would not be accurate. However, there is no real other competition,,,

Thanks a lot Thompsonpsu!