Power Market Derivative Transactions Studies

Along with the power market mechanism lead into, the market price risk and other risks must appear. The market will get the price down over a long time, this is the fact that has been proved by the theories and practices. Then new financial tools must be developed in order to make the participants have tools and methods to solve the price risk. Power market derivative transactions have different functions at different stage, and can also be crossed to combine the usage to take to grow to repair short and better exertive in each function. In this paper the financial transmission rights will be injected to old contract to build a new type forward contract to insure both price in spot market and congestion risk in transmission system. And it has been confirmed that it is useful in solving the negative flow problem in this new contract.