@article{9cff1d98dd964ebc9064c7d5b97e8d91,
title = "Regional revenues of solar and wind generation in Texas",
abstract = "Effective regulatory policies, ample renewable energy potential, and a favorable business climate have led to a boom in wind farms and solar energy projects in Texas. Using a large sample of 15-min data for the six-year period of 2016–2021, we analyze per MWh revenues from solar generation and wind generation in the renewable regions of the Electric Reliability Council of Texas (ERCOT). We find that average regional revenues from variable renewable energy (VRE) for the daytime hours of 07:00–19:00 exceed the average levelized price of recently signed solar and wind power purchase agreements (PPAs), although average regional revenues for wind generation for the nighttime hours of 19:00–07:00 were lower than recent PPA prices. Moreover, VRE's 15-min regional revenues move with ERCOT's cap on the real-time market's energy price offers, regulatory price adder, daily wholesale natural gas price, 15-min nuclear energy generation, 15-min system load, 15-min regional solar energy and 15-min regional wind energy. While continued VRE development may suppress wholesale market prices, continued growth in electricity demand and increasing natural gas prices provide offsetting effects. Nevertheless, new policies are under development to mitigate the adverse effects of further VRE development on grid reliability and generation investment incentive.",
keywords = "Regional revenues, Solar generation, Wind generation, Merit order effect, Renewable generation development, Texas",
author = "Woo, {C. K.} and J. Zarnikau and Tsai, {C. H.} and Cao, {K. H.} and Qi, {H. S.} and R. Li",
note = "Funding Information: Responding to the preceding concerns are policy proposals to slow down VRE development and provide additional incentives to dispatchable power plants in Texas. Pending legislative approval, the Public Utility Commission of Texas approved a performance credit mechanism that rewards resources available during hours of highest reliability risk (Ming et al., 2022). While renewable generators often request transmission capacity expansion, the Public Utility Commission of Texas has rejected their requests by reason of the Competitive Renewable Energy Zone project's completion. Further, some ancillary services costs may be recovered from VRE.23 Finally, some commissioners are interested in developing small modular nuclear reactors, in line with the decarbonization vision of Rick Perry - the former governor of Texas and former secretary of energy of the US.24 https://www.powermag.com/rick-perry-believes-in-nuclear-power-is-he-onto-something-or-on-something/. Whether these proposals are effective in decelerating VRE development remains to be seen, owing to the IRA's extension of federal tax credits discussed in Section 2.1.5 and other factors such as corporate and municipal support for renewable energy development noted in Section 4.3.Second, they affirm the ongoing concerns and policy responses of state policymakers reported in Section 2.1.6, as Texas's VRE development may not slow down due to the IRA's extension of federal tax credits discussed in Section 2.1.5 and the factors noted in Section 4.3. This affirmation curbs the unbridled enthusiasm of and support for accelerating the development of intermittent renewable resources (Haar and Haar, 2017), notwithstanding that these resources are essential to the US pathway to deep decarbonization (Williams et al., 2012, 2014; Mahone et al., 2018). Publisher Copyright: {\textcopyright} 2023 Elsevier Ltd",
year = "2023",
month = jul,
doi = "10.1016/j.enpol.2023.113586",
language = "English",
volume = "178",
journal = "Energy Policy",
issn = "0301-4215",
publisher = "Elsevier BV",
}
