Participants must trade energy exclusively

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The rules of the Syldavian electricity market stipulate that all participants must trade energy exclusively through the Power Pool. However, the Syldavia Alu- minum Company (SALCo) and the Northern Syldavia Power Company (NSPCo) have signed a contract for difference for the delivery of 200 MW on a continuous basis at a strike price of 16 $/MWh. a. Trace the flow of power and money between these companies when the pool price takes the following values: 16 $/MWh, 18 $/MWh and 13 $/MWh. b. What happens if during one hour the Northern Syldavia Power Company is able to deliver only 50 MWh and the pool price is 18 $/MWh? c. What happens if during one hour the Syldavia Aluminum Company consumes only 100 MWh and the pool price is 13 $/MWh?

Reference no: EM131246007

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