Locational Arbitrage

4., 4.,9943, 43, 7 7- -97 97, ,0 0 88:2090144331472,943

0, ,3 ,7/0 ,3 / 57.0 41 0 0,,3/ /4,7   857 57.04 0410 0 0,,3/ ,3/ /4,7   ;039 ;03983 831472 1472,9 ,943 4384. 84.,9 ,943 43,,7,,7-97, 97,0548 05488 8-0 -0184 18405 05, ,3 3 90890583;4;0/34.,943,,7-97,0,3/.425:9090574191742 98,7-97,014:,/94:80,92,709147.084:/ 4..:794023,90,31:79075488-908414.,943,,7-97,0 $# $#083 0830.4: 0.4:/5:7 /5:7.,80 .,8000, 00,,3/ ,3//4 /4,78,9 ,78,9,7/ ,7/0 0 ,3147,3/80902940,,31479243 ,;, ,;,, ,-0 -0    24 43 3 0 0, 0,,3 ,3/ / /4,7 /4,78 8 .4: .4:/ / -0 5:7. 5:7.,8 ,80/ 0/ ,9 ,7/0,3%08000,,3//4,78.4:/903-084/940, ,31479070-0307,93,5741941 %0,70 %0, 70/02 /02,3 ,3/147 /1470 00, 0,,3/ ,3//4 /4,7 ,78,9 8,9,7 ,7/ /0 0,3 ,3 147 147.0 .0 98 98 -,38 -,38 ,8 57.0 57.043 43 0 0,,3 0,,3/ //4 /4,7 ,78 894 94 3.70 3.70,80 ,80 % %0 0 ,70 ,70 8,08 8,08 41 0 0, 0,,3 ,3/ / /4 /4, ,78 78 94 0, 0, ,3 ,3   147.0 147.0 98 -/ -/ 57.0 57.0 /433.090,857.041,7/0,383443070889,390 -/ 57 57.0 41 0, ,3 3 4.,94 ,943 3, ,7-9 -97,0 ,0  34 43 43 07 -0  -0301.,

%7, %7 ,3 3: :,7 ,7 77-9 97, 7,0 0  88:2090144331472,943

":490/ !7.0 ',:0 41 ,3,/,3 /4,7 3 & $ /4,78  ',:0 41 0 0,,3/ /4,7 3 &$ /4,78  ',: ',:04 041 1,3 ,3,/ ,/,3 ,3/ /4 4,7 ,7 3 30 00 0,, ,,3/ 3//4 /4 ,78 ,78     ;039 ;039831 831472 472,94 ,9438 3897,3 97,3: :,7, ,7,7- 7-97, 97,05488 05488-0 -0184 18405 05,3 ,3 90890589,94:/7010.997,3:,7,7-97,0,3/.425:909057419 1742 98 98 897,90 897,90 14: 14: ,/ ,/     94:8 94 :80 0 ,9 2,70 2,709 9 147.08 147.08 4:/ :/ 4..: ..:7 94 02 23,9 3,90 ,3 ,3 1:79 1:79 07 548888-9 908 08 41 97 97,3 ,3:, :,7 ,7-97,0 $ $# #  08 08  %0 ,557 ,5574 457, 57,90 90 .748 .7488 8 0. 0.,3 ,3 0 7,90 7,90 84 4: :/ / -0  ,3,/ ,3,/,3 ,3/4 /4, ,7 7  0 0,, 0,,3//4, 3//4,78 78% %:8 :8  90,.9:, 90,.9:, ;,:041 ;,:041 90 90 ,3, ,3,/ /,3 ,3 /4 /4 ,78 ,78 3 9072 90728 8 41 0 0,, 0,,3/ 3/ /4 /4 ,78 ,78 8 24 2470 70 9,3 9,3 ,9 ,9 9 84: 84:/ / -0 -0 30 30 .4: .4:/ / 44-9, 9,3 3 ,3, ,3,/ /,3 ,3 /4 /4 ,7 ,788 9 9 &$ &$ /4,78 /4,78  80 80 90 90 ,3,/ ,3,/,3 ,3 /4 /4,7 ,78 8 147 0 0,, 0,,3/ 3/ /4,78 /4,78 ,3/ 903 903

0.,3000,,3//4,78147&$/4,78998 897,90 4:/ 0307,90  9070- 7057080393 , 57419 41            ( %0;,:04190,3,/,3/4,7970850.99490&$/4,74:/ 780 %0 ;,:0 41 90 ,3,/,3 /4,7 9 70850.9 94 90 0 0,,3//4,7 4:/ /0.30 %0 ;,:04190 0 0,,3//4,7 970850.99490&$/4,74:/1,

4;070/39070897-97,088:2090144331472,943

$549 7,90 41 ,3,/,3 /4,7 /, 147,7/ 7,90 41 ,3,/,3 /4,7 /, ,3,/,3 3907089 7,90 /, &$ 3907089 7,90

":490/ !7.0    

;039831472,943,94:/-0900/507.039,0709:7394 , &$ 3;08947 4 :80/ .4;070/ 3907089 ,7-97,0 88:20 90 3;08947 3;0898  ,9 2,709 147.08 4:/ 4..:7 94 023,90,31:79075488-90841.4;070/3907089,7-97,0 $#     0/.0.00/8 900/390&$4;0790/,5074/

%0,3,/,3 /4,7885497,90 84:/ 780 ,3/98147,7/ 7,9084:/ 1,3 ,//94390 ,3,/,3 39070897,902, 1, ,3/90&$39070897,902,780

 4;070/39070897-97,088:2090144331472,943

$549 7,90 41 0.,3 5084 /, 147,7/ 7,90 41 0.,3 5084 /, 0.,3 3907089 7,90 /, &$ 3907089 7,90

       

;03 98 31472,943 8 .4;070/ 3907089 ,7-97,0 4790 147 0.,33;0894784,;050848943;0895,34:7,3807 $# %4 ,3807986:08943-039,3,88:20/,24:39 41 50848 ,3/ /0907230 90 0/ 94 0.,3 3;089478 4 ,990259 .4;070/ 3907089 ,7-97,0 &83 ! ,8 90 39, 3;0892039 !          ! 0.,3 3;089478 4:/ 0307,90 , 0/ 41 ,-4:9  !  !(! . 0.00/8 907/42089.0/%:8984790147902

 4;070/ 3907089 7-97,0 3 49 70.9438 %0 4300,7 39070897,90300,,3/8507.039%04300,7&$3907089 7,908 507.039%085497,90 419000,,3/ /4,78 %0147,7/7,90419000,,3//4,788.4;070/ 3907089 ,7-97,0 10,8-0 147 &$ 3;089478 8 9 10,8-0 147 0 0,,3/ 3;089478 3 0,. .,80 05,3  .4;070/ 3907089 ,7-97,0847834910,8-0

$# %4 /0907230 90 0/ 1742 .4;070/ 3907089 ,7-97,0 - &$ 3;089478 89,79 9 ,3 ,88:20/ 39, 3;0892039 8:. ,8    0/

%:8 &$ 3;089478 .,3 -03019 1742 .4;070/ 3907089 ,7-97,0  -0.,:80980/0.00/890&$39070897,9041507.039 %4 /0907230 90 0/ 1742 .4;070/ 3907089 ,7-97,0 - 0 0,,3/3;08947889,799,3,88:20/39,3;0892039 8:.,8   0/ %:800,,3/3;0894784:/349-030191742.4;070/3907089 ,7-97,083.0900/4180889,3909,990.4:/ 70.0;017423;08939071:3/8300,,3/ 29,9438 41 4;070/ 3907089 7-97,0 88:20 9,9 90 430 0,7&$39070897,908507.0390904300,739070897,903 ,,8, 8  507.039 88:20 9,9 , &$ -,3 8 3 94  5:7.,8090.:7703.419,9.4:39717424:4300,7174234,9, /8.4:39 41  507.039 4:/ .4;070/ 3907089 ,7-97,0 -0 479 .438/07389070,370,8434:84:/349,990259.4;070/ 3907089,7-97,039889:,94334709,0110.98

$# 4;070/ 3907089 ,7-97,0 4:/ -0 479 .438/073 83.090709:734:/-0507.039.82:.079,390 &$39070897,9088:23,39,3;0892039  0/ 40;07901:3/84:/-03;0890/3,,8,..4:/.,:80 8420 .43.073 ,-4:9 /01,:9 78 47 4;0732039 70897.9438 43 .43;079-94190.:7703.-,.94/4,78

07;3 90 47,7/ #,90 88:20 9,9 ,33:, 3907089 7,908 3 90 &$,70507.039039070897,90837,3.0,70507.039

, ..47/3 94 #! ,9 84:/ 90 147,7/ 7,90 5702:2 47 /8.4:3941900:74-0  - 1 90 0:748 85497,90 8 ,9 84:/904300,7147,7/ 7,9041900:74-0 $#

,  5

 



















 -      





4;070/ 3907089 7-97,0 3 49 70.9438 %0 1443 31472,9438,;,,-0 O O O O O

4:,;0943;089 %0.:7703985497,904190474..,3/7,28 %0/,147,7/7,904190474..,3/7,28 %0/,39070897,90390&$8507.039 %0/,39070897,903474..48507.039

,,9 8 90 0/ 94 , &$ 3;08947 4 .43/:.98 .4;070/ 3907089 ,7-97,0 / .4;070/ 3907089 ,7-97,0 47 147 90 3;08947398.,80  - 4:/ .4;070/ 3907089 ,7-97,0-05488-0 147 , 474..,3 3;08947398.,80 $# ,4;070/3907089,7-97,04:/3;4;090144389058  43;079 /4,78 94 474..,3 /7,2     05489 90 /7,2 3 , 474..,3 -,3 147  /,8 4: ,;03 /,8  3/,8.43;07990/7,2-,.94/4,78,990147,7/ 7,90,3/70.0;0 %0 0/ 94 90 &$ 3;08947 8     4;070/3907089,7-97,0//34947147903;089473 98.,80%0407474..,3147,7/7,9024709,3411809890 0739070897,903474..4  -08.4;070/3907089,7-97,04:/-05488-0147,474..,3 3;08947%03;089474:/.43;079/7,294/4,783;08990 /4,78,9,507.03939070897,90390&$,3/8090/4,78 147,7//,8;0394:90474..,33;089474:/0,73

,33907089 7,90 9,9 8  507.039 407 390 &$ 90 147,7/ 7,90/8.4:394190/7,224709,341180989,9/1107039,

%0893#! %04300,739070897,903$3,54708507.039

%04300,739070897,90390&$8507.039%085497,90 4190$3,5470/4,7 $8 ,3/ 90 147,7/ 7,9041 90 $888:2007497,38,.9438.4898 , 40839070897,905,79089 $# 4 -0.,:80 90 /8.4:39 8 ,707 9,3 90 3907089 7,90 /1107039, - ,3,&$172-0301917423;08931:3/83$3,5470:83 .4;070/3907089,7-97,0

 $# 4 -0.,:8090/8.4:3943,147,7/8,00.00/8 9039070897,90,/;,39,0413;08933$3,5470  $4:943944393:3,80!74-02,/083.

 %01789,7-97,0455479:3970,908944.,943,,7-97,049,8 4-9,30/85497,906:49,9438174294-,383%,,3/3:,3 ,3/ $4-,9 ,3-494.,90/3 ,34 %0-/,3/,8 57.08 41 %,-,91470,.-,3,70/85,0/3909,-0-04

/ 8

3: ,3  

$4-,9 ,3  

0907230 0907 90 14703 0.,30 6:49,9438 ,70 ,557457,90190 ,70349,557457,90/090723090574194: .4:/0307,90-9/7,31742,/08.0.3 ,..4:39,3/03,33,7-97,0-01470907,908,70,/:890/  $#4.,943,,7-97,085488-0

 4.,943,7-97,0

:%,-,917423:,3



 $0 %, -,9 94 $4-,9 ,3 %    4,7 57419   



 08/0890-/,3/,86:490814790%,-,9574;/0/390 570;4:8 6:08943 3: ,3 ,8 574;/0/ 90 1443 6:49,943814790&$/4,7,3/90,5,308003 ":490/ !7.0 ',:0 41 , ,5,3080 03 3 &$  /4,78 ',:041,%,-,93,5,3080 ` 03

/ ":490/ !7.0 

8

`

0907230090790.74880.,307,90-0900390%,-,9,3/ ,5,3080 03 8 ,557457,90 1 9 8 349 ,557457,90 /0907230 90  57419 4: .4:/ 0307,90 147 ,/08 3. - 9/7,3  1742 ,/08 .0.3 ,..4:39 ,3/ 03,3 3 97,3:,7 ,7-97,0  -01470907,908,70,/:890/ $#%7,3:,7,7-97,085488-0 % 7,3:,77-97,0

.,30/4,78147%,-,9

 

43;07990%,-,9394,5,308003%  `   43;079 90 ,5,3080 03 394 /4,78 `    4,7 57419   



 0349,84-9,30/80;07,147,7/.4397,.96:49,943814790%,  -,994/09072300907.4;070/3907089,7-97,02,-05488-0 0,86:490/,147,7/7,9041507%,-,9147,/, 147,7/.4397,.9%0.:7703985497,908309/,3907089 7,908 ,;,,-0 94 ,/08 3 90 &$ ,70  507.039 0 /, 3907089 7,908 3 %,,3/ ,70  507.039 9080 7,908 ,70 349 ,33:,0/ 49 8 ,,70 9,9 .4;070/ 3907089 ,7-97,0 :30 4.,943, ,3/ 97,3:,7 ,7-97,0 706:708 ,3 3;0892039 41 1:3/8 %:804:/094-0,-0940892,9090/4,757419708:93 1742,7-97,04;07,3/,-4;090/4,7,24:39,;,,-043,/, &$/05489 0907230090790147,7/7,90857.0/,557457,90198349  57.0/ ,557457,90 /0907230 90 57419 4: .4:/ 0307,90 147 ,/08-9/7,31742,/08.0.3,..4:39,3/ 03,3 3 .4;070/ 3907089 ,7-97,0 0,8:70 90 57419 ,8 90 0.088,24:39,-4;0,94:.4:/0307,90-3;0893390&$ 24302,709

$#4;070/3907089,7-97,085488-0 4;070/39070897-97,0

3,.43;079&$/4,7894%,-,9,3/809:5, /,/05489  ,..4:39 ,9 , %, -,3    3/,890%,/054892,9:7094%   . 8 90 ,24:39 94 -0 84/ 147,7/    3  /,8 .43;079 90 %, -,9 394 &$ /4,78 ,9 90 ,700/:5437,90 %     4,7,24:39,;,,-043,/,&$/05489  

4,7574194;07,3/,-4;090/4,7,24:39,;,,-043,  /,&$ /05489   ,70 ,7-97,0 455479:3908 0 94 /8,550,7 8443 ,1907 90 ,;0-003/8.4;070/%4:897,904:7,3807,88:209,9.4;070/ 3907089,7-97,03;4;3 90 220/,905:7.,80,3/ 147,7/8,0 41 -,9 8 5488-0 8.:88 4 90 -,98 8549 ,3/ 147,7/ 7,908 4:/ ,/:89 :39 .4;070/ 3907089 ,7-97,0 8 34 4307 5488-0 ,9890708:9306:-7:289,90.,0/ $# 7-97,0455479:3908,70094/8,550,7 8443,1907 90 ,;0 -003 /8.4;070/ -0.,:80 41 2,709 147.08 :0 94 90 ,.9438 9,03 - ,7-97,0:78 8:55 ,3/ /02,3/ 147 90 14703 .:7703.,/:89:39902857.3/8,550,78470,250.4;070/ 3907089 ,7-97,0 3;4;3 90 220/,90 5:7.,80 ,3/ 8:-806:039 8,041%,-,94:/5,.0:5,7/57088:70439085497,904190 %,-,9,3//43,7/57088:704390%,-,9147,7/7,90:39 .4;070/3907089,7-97,083443075488-099,954393907089 7,90 5,79 0898 ,3/ 90 3907089 7,90 /1107039, -09003 90 94 .4:3970880,.9411809-90147,7/5702:247/8.4:39

 $4:94394$:5502039,,80:-073.

, %0 050.90/ ;,:0 41 90 0/ 43 3;0893 1:3/8 3 98 .4:397 4:/-0507.039;078:843507.039390&$40;079070 8 2:. :3.079,39 ,-4:9 90 14703 0/ 1 90 .:7703. /0570.,908-,,70,24:399504:984204190573.5, 3;0890/ ;039,9 :-07 // 349 ,39 949,709 9080 1:3/8 147 , 850.:,9;05:7548094:/349-080943;08990801:3/8390 .4:39794:9.4;073  - 4;070/ 3907089 ,7-97,0 4:/ 3;4;0 0.,33 /4,78 147 90 .:7703. 94/, 3;0893 90 .:7703. 3 90 .4:3978 %70,8:7 80.:7908 ,3/ 3049,93 , 147,7/ .4397,.9 94 80 90 .:7703. 3 4300,730.,30147/4,78 ;03 9,9 2438 ,;,,-0 98 ,24:394:/-0 .43;0790/ 394243:398419014703.:7703..4:/,..:2:,90 94  243 :398 ,9  507.039 - 90 03/ 41 90 0,7 ,3/ -0

.43;0790/ 394  ,9 90 920 -,80/ 43 , 147,7/ 7,90 41 %87010.98,709:7341507.039 . %078841.4;070/3907089,7-97,0,70,81448 O

O

O

%0%70,8:74190.4:397.4://01,:9439880.:790888:0/ %0-,32,3491:1984-,9434390147,7/.4397,.990  -,3,8:8970.03957;,90/,3//408349,;0,97,.70.47/ ,8,57;,90/3899:943 %0 4;0732039 .4:/ 70897.9 1:3/8 1742 -03 .43;0790/ 394 /4,78 $3.0 90.4:397 ,8 43,40/ 14703 3;08920398 70.0399/408349,;0,97,.70.47/%07088420:3.079,39 ,-4:9981:9:70,84339073,943,13,3.0

/ 0.4;070/3907089,7-97,04:/-0050.90/94,.0;0,0/ 41  507.039 ;078:8 43  507.039 3 90 &$ 90 788 ,70 831.,39 0850., .438/073 9,9 90 .4:397 8 89 050720393 9 .7488-47/07 97,38,.9438 $3.0 8420 89:/0398 574-,-8:089431479007709:738986:089432, ,4147,339070893.,88/8.:8843

 $2,:83088022, 880882039 41 !70;,3 $549 ,3/ 47,7/ #,908 - 90 $54798 54798425,3

 44:93 2-0,-094 13/,-,39,9574;/0829, 24701,;47,-085497,909,384.,-,35,3 $# %06:490/ 85497,90 14779854:3/8 95.,-0 82,7 ,243 -,38 ,9 , ;03 5439 3 920 -0.,:80 4.,943, ,7-97,029-05488-019070070831.,39/110703.0898  5488-0 9,9 8420 -,38 9,9 7,70 574;/0 90 14703 0.,30 807;.086:490,0881,;47,-00.,307,90,3/4.,943,,7-97,0  349 30.088,7 .4770.9 98 1 9080 -,38 ,;0 , ,70 8570,/  -0900390-/,3/90,86:4908%070147092,-04790 147 2 94., 4907 -,3894 4-9,3 6:4908 -:9 2  0 13/

9,9 0 .,3349 4-9,3 , 2:. -09907 7,90 9,3 ,9 8 4., -,3  574;/08  4 4: 93 9,9 28 -,3 8 0 94 574;/0 2470 70,843,-0 6:49,94381479085497,90419079854:3/1989043-,33 9439,9574;/08147030.,30807;.085,3 $# %0-,38094574;/0 247070,843,-06:49,9438 1479085497,90419079854:3/19070,702,3-,383943 9,9 574;/0 14703 0.,30 807;.08 3 98 .,80 9070 8 2470 .42509943 ,3/ , 4., -,3 8 2470 0 94 480 -:83088 1 98 6:49,9438,7034970,843,-0  2 8.438/073:83, 147,7/ .4397,.9 94 0/090 ,39.5,90/ 70.0;,-08354:3/8309243984.,-,36:490/2,8549 7,90 41 ,3/ ,4302439 147,7/7,90 41 01470 2 /0./08948054:3/84302439147,7/0,39894-08:709,990 147,7/ 7,90 8 70,843,-0 ;03 90 570;,3 8549 7,90  430 2439%70,8:780.:79390&390/$9,908.:77039411078,0/ 349,33:,0/41507.0390, 4302439%70,8:780.:793 90&390/3/42411078,0/41507.03944:-00;09,9 904302439147,7/7,90870,843,-0;039085497,9041 $# 08 ..47/3 94 3907089 7,90 5,79 90 147,7/ 7,90  5702:284:/-0-,80/4390/1107039,-0900339070897,908 5  (  (     %0,.9:,5702:28 5    $$       %0 ,.9:, 5702:2 8 ;07 .480 94 ,9 90 5702:2 84:/ -0 ,..47/39439070897,905,79