Power Trading

Power Quant Trading

- Each point on a power grid has a 'location marginal price' that is driven by supply and demand

- Day ahead market: settled the next day

- Real time market: occurs in 5-15 minute intervals where price on each point of a power grid is settled

- EU power is liquid, US power is illiquid 

Congestion Traders 

- 10-20% of total energy trading

- Power lines have a capacity of how much power it can receive

- Price can be highly volatile

- A software called 'DAYZER" looks at physical constraints, the day ahead market and other inputs

- Financial Transmission Rights (FTR) / Congestion Revenue Rights (CRR) traders

- Analyze transmission congestion data (e.g. transmission line constraints, generation outages, and load patterns.) in various Independent System Operators/Regional Transmission Organizations (ISO/RTO) markets

- Virtual Traders

- Physical Traders

- Market simulation softwares: DAYZER, PowerWorld, PROMOD, PSSE, Plexos

General Energy Trading 

- 80-90% of energy trading activities

- Commodity Traders: besides congestion, also studies market conditions, supply and demand, regulatory changes, geopolitical factors, production, storage etc

- Arbitrage Traders

- Hedge Fund, Proprietary Traders, Speculative Traders

- Use advanced quantitative models, algorithms, and high-frequency trading strategies to capitalize on market inefficiencies and price movements related to congestion

 

Power Traders

- Trade on ICE

- weather, convenience yield, government subsidy

Trading spark spreads

https://www.eia.gov/

Asia Power Grids

India

America Power Grids

Europe Power Grid

UK

Middle East Power Grid

Brazil Power Grid

South Africa Power Grid

Consumption Pattern

- In UK, consumption spike at 715pm when people turn on their kettle for a cup of tea or turn on TV shows

40% of EU's gas come from Russia

Gas pipelines

Korea

Pakistan -  Sui Southern Gas Transmission Pipeline

HVJ Gas Pipeline