Oxford Institute Proposes Multi-Period Transmission Rights for U.S. Electricity Markets
Amid the rise of energy storage and AI data centers, an Oxford Institute for Energy Studies paper recommends reforming financial hedging instruments for congestion risk on U.S. power grids.
| Countries | États-Unis |
|---|---|
| Companies | Oxford Institute for Energy Studies, ERCOT |
| Sector | Réseaux électriques |
| Theme | Marchés & Finance |
The massive integration of renewable energy and storage batteries is altering the risk structure in U.S. electricity markets, according to an analysis published by the Oxford Institute for Energy Studies (OIES). The study, authored by Daniel Yang, OIES-Aramco Fellow, examines the effectiveness of Financial Transmission Rights (FTRs), financial instruments designed in the 1990s to hedge congestion risk on electricity transmission networks. The document identifies five risk categories: locational congestion risk, temporal price risk, volume variability risk, demand and supply tail risks, and regulatory design risk.
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