The impact of wind generation on the electricity spot-market price level and variance: The Texas experience |
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| Authors: | C.K. Woo I. Horowitz J. Moore A. Pacheco |
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| Affiliation: | 1. Energy and Environmental Economics, Inc., 101 Montgomery Street, Suite 1600 San Francisco, CA 94104, USA;2. Hong Kong Energy Studies Centre, Hong Kong Baptist University, Hong Kong;3. Warrington College of Business, University of Florida, Gainesville, FL 32611-7169, USA |
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| 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. |
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| Keywords: | Wind energy Electricity price Risk management |
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