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Does transmission unbundling increase wind power generation in the United States?

Kota Sugimoto

Energy Policy, 2019, vol. 125, issue C, 307-316

Abstract: Limited access to transmission grids can be a potential barrier that prevents the wind power development. Unbundling transmission operation and ownership from incumbents was a common approach for greater competition in the United States and European countries, before promoting renewable energy deployment. This article investigates whether the functional separation of transmission in the United States enhanced the wind power installation. I employ the OLS fixed effect and Tobit random effect models to separately examine the effects of state policies and socio-economic factors, using panel data from 1990 to 2016. This study shows that the functional unbundling, an omitted variable in prior econometric studies, emerges as a main driver of state wind power development. The result indicates states in Independent System Operator or Regional Transmission Operator develops annually about 46.8% (Tobit) to 118% (OLS) more wind capacity on average. This paper suggests removing barriers for competition can facilitate wind energy development as a side effect in the United States, especially for nonutility.

Keywords: Renewable energy; Functional unbundling; Vertical separation (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:eee:enepol:v:125:y:2019:i:c:p:307-316