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. Copyright © 2011 Elsevier Ltd. All rights reserved.
CitationWoo, C. K., Horowitz, I., Moore, J., & Pacheco, A. (2011).The impact of wind generation on the electricity spot-market price level and variance: The Texas experience. Energy Policy, 39(7), 3939-3944. doi: 10.1016/j.enpol.2011.03.084
- Wind energy
- Electricity price
- Risk management