Real Time Power Trading - US vs Europe
Hello
as a European real time power trader and out of interest for the other side I have a couple of questions regarding US real time power markets in general
US nodal
US:
my understanding, please correct me if I am wrong
* deviation to day-ahead sold position is settled via LMP on a five minute basis
* So in case of a plant trip, wind deviation or similar events, i will sell / buy at (LMP * deviation in MW) * 5/60?
* Where a given LMP is subject to flexibility at other nodes and local grid congestion?
Questions
* How do I exactly arrive at the LMP? Do I have to imagine a Trader placing a Bid / Ask for his asset on a different Node that then gets automatically executed by the ISO?
* If so, do you guys for example short sell physical power? For example short selling to another node at a good price and then just leaving the physical short position to LMP on your node, given your LMP is lower than the one you sold to?
* What are the most liquid products? Do you really trade 5 minutes? Or are there more liquid products like hours / blocks?
* How does the market interface look like? Do you see available flexibility per product per node on the screen? How do you handle trading like 20 nodes?
* Generally, how does liquidity look? In the major european markets i can easily buy back or sell 5GW and more per hour
* It seems to me like a market with a lot of arb potential, so are these markets dominated by algos?
EU zonal
* usually products are traded in 1 hour, 30 min and 15 min products, uk markets also 4 hour blocks and more with fairly high liquidity
* Usual game is, obviously buy low sell high on a prop basis before it goes into delivery, and trading around your flexibility as well as imbalance (see below)
* Instead of a nodal price, we have an "imbalance price" for the entire zone (mostly zone == country)
* Imbalance price is mostly settled on 30min or 15min interval, with either marginal (most expensive activated asset sets the price) or volume weighted pricing
* So if you're for example short power vs day-ahead in delivery, you will buy back at this imbalance price
* Price can be favorable conditional to direction of the grid, so if you're short and the grid is long (oversupplied), you will buy back lower than day ahead in imbalance
* This is a game that mostly traders with a lot of intermittent production can do, as usually, in many countries, you would technically have to be balanced when going into delivery
* For most countries, algo share is > 50%
Would appreciate some input, as I expect to be totally wrong about how you guys make money :)
Hi longiswrong, yes, I'm a bot, but I'm also good looking. Hopefully, these threads help you:
You're welcome.
Bump, nobody able to give some input?
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