The impact of wind generation on wholesale electricity prices in the hydro-rich pacific northwest

Chi-Keung Woo, Jay Zarnikau, Jonathan Kadish, Ira Horowitz, Jianhui Wang, Arne Olson

    Research output: Contribution to journalJournal articlepeer-review

    58 Citations (Scopus)

    Abstract

    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.

    Original languageEnglish
    Pages (from-to)4245-4253
    Number of pages9
    JournalIEEE Transactions on Power Systems
    Volume28
    Issue number4
    DOIs
    Publication statusPublished - Nov 2013

    Scopus Subject Areas

    • Energy Engineering and Power Technology
    • Electrical and Electronic Engineering

    User-Defined Keywords

    • Electricity markets
    • Electricity prices
    • Power-system economics
    • Regression analysis
    • Sustainable development
    • Wind energy

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