Assessing the potential profitability of automated power market trading using event signals sourced from grid frequency data

Within a power system, the instantaneous loss of generation or import/export via an interconnector causes a disturbance in the grid frequency. In a low inertia system, it becomes increasingly feasible to identify, size, classify and locate such grid events using a suitably sensitive and accurate network of measurement devices. Loss of generation or interconnector capacity often leads to a significant change in the price stack, leading to movement in market prices as traders adjust their positions. We demonstrate that a systematic trading strategy using an event-detection signal based on public frequency data and highly accurate measurement devices can be profitable. We also assess the sensitivity of profits to the overall event-detection and trade-execution lead times.