The impact of wind generation on the electricity spot-market price level and variance: The Texas experience

Chi-Keung Woo, I. Horowitz, J. Moore and A. Pacheco

Energy Policy, 2011, vol. 39, issue 7, 3939-3944

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.

Keywords: Wind; energy; Electricity; price; Risk; management (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (188)

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