FTR meaning

A Financial Transmission Right (FTR) is a purely financial hedge used in electricity trading: it pays (or charges) the holder the day-ahead price spread between two bidding zones for a stated MW and period, protecting against cross-border congestion costs and basis risk. It creates no right to physical capacity. In UK and Irish practice, “FTR” typically refers to long-term transmission rights (LTTRs) on interconnectors (for example, IFA/IFA2, Nemo Link, BritNed, NSL, EWIC and Moyle), rather than internal nodal rights. The concept is defined in EU electricity regulation—notably the Forward Capacity Allocation Regulation (EU) 2016/1719—and implemented through regulator-approved interconnector access rules and market codes. In Great Britain and the Single Electricity Market (SEM) for Ireland and Northern Ireland, the operative terms, settlement and credit requirements are set by those access rules and codes rather than primary legislation. Post‑Brexit, FTRs continue on many GB–EU interconnectors under updated rules. Key features include: auctioned issuance by TSOs/JAO; option or obligation products; settlement to day‑ahead price spreads; entitlement to congestion revenues; transferability/secondary trading subject to rulebook limits; and credit cover. Usage and legal treatment are broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland, though available product types and parameters vary by interconnector.