Association Webinars: VRE Participation in U.S. AS Markets


Variable renewable energy (VRE) is not yet meaningfully participating in U.S. ancillary services (AS) markets. VRE participation in AS markets could provide a new source of revenues for VRE resource owners to offset declining energy and capacity values and a new tool for power system operators to address emerging system constraints. This paper uses a price-taker dispatch model and historical prices to estimate the economic value of standalone and hybrid (battery-paired) VRE participation in AS markets, from resource owner and electricity system perspectives, in each of the seven U.S. independent system operator and regional transmission organization (ISO/RTO) markets. Across ISO/RTO markets, average (2015-2019) simulated incremental revenues from regulation market participation were $0.0-2.9/MWh (+0-15% of revenue without participation) for standalone VRE owners and $1-33/MWh (+1-69%) for hybrid VRE owners. However, ISO/RTO reserve markets are relatively thin and have the potential to become saturated by energy storage projects that are currently in ISO/RTO interconnection queues. In most markets, standalone and hybrid VRE were able to provide regulation reserves during periods with high regulation prices, suggesting that VRE participation in AS markets could have high system value. The analysis highlights the value of separate upward and downward regulation products and suggests that ISOs/RTOs might consider initially focusing on enabling hybrid VRE provision of AS.

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James Hyungkwan Kim is an Energy Economist titled Energy Policy Project Scientist in the Electricity Markets and Policy Department at Lawrence Berkeley National Laboratory. He conducts research on clean energy market policy and the related value and costs of power system technologies to analyze clean energy resources in response to deep decarbonized grid needs. James has published his research in Applied Energy, Energy Research & Social Science, and IEEE among other outlets.

Prior to joining the lab, James worked in the U.S as an energy economist and trader at Tenaska Power Services and an energy policy researcher at Indiana State Utility Forecasting Group. Internationally, James worked in the United Nations Environment Programme in Geneva for Finance Initiative, ASEAN summit focused on energy issues, investment banking for green finance, and management consultancy for sustainable businesses.

James holds a Ph.D in Applied Economics from Purdue University; an M.S in Economics from Brunei University; and a B.A in Computer Science and Industrial Engineering from Yonsei University.

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Event Date: October 31, 2022

Event Time: 10:00 - 11:00 AM Eastern Time

Topic: Variable Renewable Energy Participation in U.S. Ancillary Services Markets

Speakers: James Hyungkwan Kim

Price: FREE

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