Financial transmission and storage rights

The paper presents concepts of Financial Transmission Rights (FTRs) and Storage (FSRs) as key market for alleviating congestion issues in transmission networks. These instruments are place markets where prices differ depending on the location/node due to congestions. They serve a tool system operators TSO (or independent operators; ISOs) eliminating congestions by remunerating entities who make it possible. further discusses different aspects FTRs, which traditional financial used hedge risk high cost occurrence associated with congestion. By owning trading through auction or via bilateral contracts, participants can gain additional profit. More variable uncertain power environment, characterized penetration renewable energy sources (RES), creates potential storage units assist TSO/ISO maximizing social welfare FSR. As has capability move time, alleviate lines create profit intertemporal arbitrage (by load shifting peak shaving) improving return rate its investment. additionally explained intuitive examples showing how, when occurs awards own rights, price volatility is reduced.