We have completed a post-implementation review of the financial transmission rights (FTR) market.

The FTR market was introduced in June 2013 to provide “mechanisms to help wholesale market participants manage price risks caused by constraints on the national grid” as directed under section 42 of the Electricity Industry Act 2010.

The purpose of post-implementation reviews is to evaluate an initiative against its expected outcomes. This review found that overall the FTR market has been successful in increasing competition in the retail electricity market by allowing some retailers to expand into new geographical areas. FTRs have also allowed several users to underwrite or support other risk management products, and many users consider FTRs to be an effective tool to have in their risk management strategy. One opportunity identified is the need for more education on FTRs, particularly for smaller firms.