TY - JOUR
T1 - The impact of wind generation on wholesale electricity prices in the hydro-rich pacific northwest
AU - Woo, Chi-Keung
AU - Zarnikau, Jay
AU - Kadish, Jonathan
AU - Horowitz, Ira
AU - Wang, Jianhui
AU - Olson, Arne
N1 - Copyright:
Copyright 2013 Elsevier B.V., All rights reserved.
PY - 2013/11
Y1 - 2013/11
N2 - Extant literature documents that wind generation can reduce wholesale electricity market prices by displacing conventional generation. But how large is the wholesale price effect of wind generation in an electricity market dominated by hydroelectric generation? We explore this question by analyzing the impact of wind generation on wholesale electricity prices in the Pacific Northwest region of the United States. This hydro-rich system tends to be energy-limited, rather than capacity-constrained, with its marginal generation during the hydro runoff season often a hydro unit, instead of a natural-gas-fired unit. We find that increased wind generation reduces wholesale market prices by a small, but statistically-significant, amount. While a hydro-rich system can integrate wind generation at a lower cost than a thermal-dominated region, the direct economic benefits to end-users from greater investment in wind power may be negligible.
AB - Extant literature documents that wind generation can reduce wholesale electricity market prices by displacing conventional generation. But how large is the wholesale price effect of wind generation in an electricity market dominated by hydroelectric generation? We explore this question by analyzing the impact of wind generation on wholesale electricity prices in the Pacific Northwest region of the United States. This hydro-rich system tends to be energy-limited, rather than capacity-constrained, with its marginal generation during the hydro runoff season often a hydro unit, instead of a natural-gas-fired unit. We find that increased wind generation reduces wholesale market prices by a small, but statistically-significant, amount. While a hydro-rich system can integrate wind generation at a lower cost than a thermal-dominated region, the direct economic benefits to end-users from greater investment in wind power may be negligible.
KW - Electricity markets
KW - Electricity prices
KW - Power-system economics
KW - Regression analysis
KW - Sustainable development
KW - Wind energy
UR - http://www.scopus.com/inward/record.url?scp=84886092345&partnerID=8YFLogxK
U2 - 10.1109/TPWRS.2013.2265238
DO - 10.1109/TPWRS.2013.2265238
M3 - Journal article
AN - SCOPUS:84886092345
SN - 0885-8950
VL - 28
SP - 4245
EP - 4253
JO - IEEE Transactions on Power Systems
JF - IEEE Transactions on Power Systems
IS - 4
ER -