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Forward contracts in electricity markets: The Australian experience

✍ Scribed by Edward J. Anderson; Xinin Hu; Donald Winchester

Publisher
Elsevier Science
Year
2007
Tongue
English
Weight
271 KB
Volume
35
Category
Article
ISSN
0301-4215

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✦ Synopsis

Forward contracts play a vital role in all electricity markets, and yet the details of the market for forward contracts are often opaque. In this paper we review the existing literature on forward contracts and explore the contracting process as it operates in Australia. The paper is based on interviews with participants in Australia's National Electricity Market (NEM). The interviews were designed to understand the contracting process and the practice of risk management in the Australian energy-only pool market. This survey reveals some significant gaps between the assumptions made in the academic literature and actual practice in the Australian market place.

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