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

Chi Keung WOO, I. HOROWITZ, J. MOORE, A. PACHECO

Research output: Contribution to journalArticle

186 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)3939-3944
JournalEnergy Policy
Volume39
Issue number7
DOIs
Publication statusPublished - Jul 2011

Citation

Woo, 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

Keywords

  • Wind energy
  • Electricity price
  • Risk management

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