Forward contracts in electricity markets: The Australian experience

Edward J. Anderson, Xinin Hu, Donald Winchester

Research output: Contribution to journalArticlepeer-review

52 Citations (Scopus)

Abstract

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. © 2006 Elsevier Ltd. All rights reserved.
Original languageEnglish
Pages (from-to)3089-3103
Number of pages15
JournalEnergy Policy
Volume35
Issue number5
DOIs
Publication statusPublished - May 2007

Keywords

  • Electricity markets
  • Forward contracts
  • Risk management

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