This report analyses how an introduction of financial transmission rights (FTRs) in the Nordic electricity market would impact market actors and TSOs. Pros and cons compared to the present system with contracts for differences (CfDs) are listed.
The background for the study is the ongoing European work regarding framework guidelines and network codes. According to the target model for the forward market, TSOs shall sell FTRs or physical transmission rights (PTRs). In February 2011 and after a public consultation process, ERGEG published a final draft for framework guidelines for capacity allocation and congestion management (FG on CACM). Provision 4.2 stipulates that TSOs shall provide FTRs or PTRs unless appropriate cross-border financial hedging instruments are offered in liquid financial markets.
For the purpose of this study, 9 market players and 7 other stakeholders in Sweden, Norway and Finland have been interviewed.