The Natural Number of Forward Markets for Electricity

摘要: Observers of restructured electricity markets emphasize: (1) Spot prices are extremely variable, because is not storable; (2) long-dated forward rarely exist – those in California were a single day ahead. Actually, the first observation implies second. With aid simulation model, which replicates seasonality, heteroskedasticity, and serial correlation load, precise constellations can be deduced setting perfect competition, risk neutrality, best possible forecasting. Even at extreme conditions idealized spot market, these converge to long-run seasonal means horizon just few days. Another reason for redundant futures market natural gas on NYMEX, functioning beyond two years, as demonstrated by analyses forecasting power using data well from NYMEX over 1998-2000.