Association Webinars: Rethinking the Role of FTR for Renewables



In the United States, most wind power capacity has been deployed in the wind-rich central region. Transmission congestion within this large region causes spatial variation in wholesale power prices—called the basis—that can unpredictably reduce wind plant revenue and, hence, possibly slow deployment. We use historical pricing and generation data from three central U.S. markets to show that wind plants are more-susceptible than thermal generators to congestion-related basis risk. Moreover, while most thermal generators can effectively hedge any basis risk by purchasing conventional financial transmission rights (FTRs), these fixed-volume FTRs are not a good match for variable wind generation. More-effective hedging mechanisms—for example, an FTR whose volume varies with wind plant output—may be required to support those generators most-impacted by congestion, and to promote continued investment in variable generation resources in congested markets.

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James Hyungkwan Kim is an Energy Policy Project Scientist in the Electricity Markets and Policy Department at Lawrence Berkeley National Laboratory. He conducts research on the value and costs of power system technologies and related market policy as well as develops methods to estimate dispatch of flexible resources in response to grid needs. James has published his research in Applied Energy, Energy Research & Social Science, and IEEE Proceedings 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 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: February 2, 2022

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

Topic: Rethinking the Role of FTR for Renewables

Speaker: James Hyungkwan Kim

Price: FREE

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