Electricity price area

An electricity price area is a zone throughout which the electricity is traded at the same spot price on a power exchange. An electricity price area is decided by transmission system operator and can be a whole country, or parts of it.[1]

EPADs and price area risk

The electricity price usually differs from the system price from one price area to another, e.g. when there are constraints in the transmission grid. A special contract for difference called Electricity Price Area Differentials or EPAD allows members on the power exchange to hedge against this market risk called area price risk.[2]

See also

References
  1. "Bidding areas". Nordpool Spot. Archived from the original on 25 December 2015. Retrieved 15 December 2015.
  2. "Electricity Price Area Differentials". Nasdaq. Retrieved 15 December 2015.
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