Real Time Trader - Northeast Power

Hey guys, on the desk tn and rather slow here. Worked almost 2 years in real time now. It's shift work (4 on, 6 off) and physical power. Not generation backed and straight prop. Doing this right out of school and prior experience was S&T (fixed income) at a large-ish Canadian shop. Happy to answer any questions people have. Cheers!

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  1. How is RT different from Term/Virtuals/Congestion trading?
  2. I've heard RT is basically calling up ISOs. What are the analytical portions of your job?
  3. How do you look at the stack in a RT context?

1. In real time, you're actually moving physical power across different ISOs while Term/Virtuals are just financial products that settle similar to a CFD.

2. Might be the case at a large generator or utility (guessing here, never worked at one of those), we only call the ISOs to nudge them to confirm transmission reservations (especially MISO) or seek clarity on why a particular tag (instruction to flow physical power between a certain path) didn't flow. It's similar to calling operations to get colour on breaks or settlement data. 

Analysis is just a set of processes that I look at every hour for 12 hours when I am at the desk. Usually, we figure out what our market will do (based on load, weather, intertie schedules, generation profiles etc) and then decide to flow out i.e. export or import to very select nodes if we can break even on the flow.

There are certain congestion patterns that we see enough of and we can expect what price action it'll bring (Depress Node A, Prop up Node B) in that case I personally just love putting those on where I'll import from one and export on the other one for a say 5 hours in a row to capture that one good hour where that spread blows out.

Overall, it's like playing blackjack once you know the rules and optimal strategy then there's only so much more analysis you can do if that makes sense.

3. Stack just means the generation profile for a given day (Baseload Nuke + Renewables + Hydro + Gas + Peaking Gas/Hydro + No Man's Land/Max Prices). Prices are based on the marginal generator coming online to dispatch the last MW of demand in rt.

Usually, we see Gas pricing being marginal but when load runs heavy (greater than forecast) and wind/other generators fail to produce/trip we can see higher gases or even just blow up as there might be a thin stack above most of the gasses on any day. So the stack is the amount of generation that will be coming online to meet the demand over the course of the day.

Money is made/saved when you can see/predict at what points we will move from say hydro to gas or gas to hydro as there is a $40+ differential in rt prices based on that. But at the same time, you could observe a lot of external strength and no matter what the generation profile is the right call is to flow out into those markets as much size as you can and capture that strength. Hope that helps

 

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