Regional revenues of solar and wind generation in Texas

C. K. Woo, J. Zarnikau, C. H. Tsai, K. H. Cao, H. S. Qi, R. Li*

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

2 Citations (Scopus)

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.

Original languageEnglish
Article number113586
Number of pages18
JournalEnergy Policy
Volume178
Early online date29 Apr 2023
DOIs
Publication statusPublished - Jul 2023

Scopus Subject Areas

  • Energy(all)
  • Management, Monitoring, Policy and Law

User-Defined Keywords

  • Regional revenues
  • Solar generation
  • Wind generation
  • Merit order effect
  • Renewable generation development
  • Texas

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