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

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

208 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.

Original languageEnglish
Pages (from-to)3939-3944
Number of pages6
JournalEnergy Policy
Volume39
Issue number7
DOIs
Publication statusPublished - Jul 2011

Scopus Subject Areas

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

User-Defined Keywords

  • Electricity price
  • Risk management
  • Wind energy

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