Cost-effectiveness of a modest expansion of renewable generation capacity in Texas

Chi Keung WOO, J. ZARNIKAU, C.H. TSAI, S. ZHU

Research output: Contribution to journalArticles

Abstract

Using a large sample of 15-minute real-time market (RTM) price data from the Electric Reliability Council of Texas (ERCOT), this paper estimates the RTM price reduction caused by a modest 500-MW renewable generation (RG) capacity expansion in Texas, thereby determining whether RG investors face inadequate investment incentive. Its key findings are: (a) the expansion is highly cost-effective with sufficient investment incentive for RG investors; and (b) a gradual RG development likely benefits Texas's retail end-users. Hence, Texas should pursue RG growth, lest it triggers substantial increase in costs for transmission expansion and operating reserve. Copyright © 2019 Elsevier Inc. All rights reserved.
Original languageEnglish
Article number106696
JournalThe Electricity Journal
Volume33
Issue number2
Early online dateNov 2019
DOIs
Publication statusPublished - Mar 2020

Citation

Woo, C. K., Zarnikau, J., Tsai, C. H., & Zhu, S. (2020). Cost-effectiveness of a modest expansion of renewable generation capacity in Texas. The Electricity Journal, 33(2). Retrieved from https://doi.org/10.1016/j.tej.2019.106696

Keywords

  • Cost-effectiveness
  • Renewable generation investment
  • Real-time energy market
  • Electricity procurement cost
  • Missing money
  • ERCOT

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