The impact of wind generation on the electricity spot-market price level and variance: The Texas experience

The literature on renewable energy suggests that an increase in intermittent wind generation would reduce the spot electricity market price by displacing high fuel-cost marginal generation. Taking advantage of a large file of Texas-based 15-min data, we show that while rising wind generation does in...

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Bibliographic Details
Published inEnergy policy Vol. 39; no. 7; pp. 3939 - 3944
Main Authors Woo, C.K., Horowitz, I., Moore, J., Pacheco, A.
Format Journal Article
LanguageEnglish
Published Kidlington Elsevier Ltd 01.07.2011
Elsevier
Elsevier Science Ltd
SeriesEnergy Policy
Subjects
Applied sciences
Displacement
Economic data
Electric energy
Electricity
Electricity generation
Electricity price
Energy
Energy consumption
energy costs
Energy economics
Energy policy
Energy prices
Exact sciences and technology
Expansion
General, economic and professional studies
issues and policy
Market prices
Markets
Methodology. Modelling
Natural energy
Price variance
Renewable energy
renewable energy sources
Risk management
Studies
Texas
Variance
wind
Wind energy
Wind energy Electricity price Risk management
Wind power
Wind power generation
Texas
United States
North America
America
United States > US
USA, Texas
Risk management
Wind energy
Electricity price
Case study
Electricity
Regression model
Linear regression
Production capacity
Spot price
Electric power production
Market penetration
Modeling
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Summary:The literature on renewable energy suggests that an increase in intermittent wind generation would reduce the spot electricity market price by displacing high fuel-cost marginal generation. Taking advantage of a large file of Texas-based 15-min data, we show that while rising wind generation does indeed tend to reduce the level of spot prices, it is also likely to enlarge the spot-price variance. The key policy implication is that increasing use of price risk management should accompany expanded deployment of wind generation. ► Rising wind generation in ERCOT tends to reduce electricity spot prices. ► Rising wind generation in ERCOT is also likely to enlarge the spot-price variance. ► Increased price risk management should accompany expanded wind power deployment.
Bibliography:http://dx.doi.org/10.1016/j.enpol.2011.03.084
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ISSN:0301-4215
1873-6777
DOI:10.1016/j.enpol.2011.03.084