Electricity-market price and nuclear power plant shutdown: Evidence from California

Chi-Keung Woo, T. Ho, Jay Zarnikau (), A. Olson, R. Jones, M. Chait, I. Horowitz and J. Wang

Energy Policy, 2014, vol. 73, issue C, 234-244

Abstract: Japan׳s Fukushima nuclear disaster, triggered by the March 11, 2011 earthquake, has led to calls for shutting down existing nuclear plants. To maintain resource adequacy for a grid׳s reliable operation, one option is to expand conventional generation, whose marginal unit is typically fueled by natural-gas. Two timely and relevant questions thus arise for a deregulated wholesale electricity market: (1) what is the likely price increase due to a nuclear plant shutdown? and (2) what can be done to mitigate the price increase? To answer these questions, we perform a regression analysis of a large sample of hourly real-time electricity-market price data from the California Independent System Operator (CAISO) for the 33-month sample period of April 2010–December 2012. Our analysis indicates that the 2013 shutdown of the state׳s San Onofre plant raised the CAISO real-time hourly market prices by $6/MWH to $9/MWH, and that the price increases could have been offset by a combination of demand reduction, increasing solar generation, and increasing wind generation.

Keywords: Electricity market; Prices; Nuclear shutdown; Energy policy (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:73:y:2014:i:c:p:234-244

DOI: 10.1016/j.enpol.2014.05.027

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