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Influence of wind power on hourly electricity prices and GHG emissions: Evidence that congestion matters from Ontario zonal data

Mourad Amor (), Etienne Billette de Villemeur (), Marie Pellat and Pierre-Olivier Pineau

MPRA Paper from University Library of Munich, Germany

Abstract: With the growing share of wind production, understanding its impacts on electricity price and greenhouse gas (GHG) emissions becomes increasingly relevant, especially to design better wind-supporting policies. Internal grid congestion is usually not taken into account when assessing the price impact of fluctuating wind output. Using 2006-2011 hourly data from Ontario (Canada) , we establish that the impact of wind output, both on price level and marginal GHG emissions, greatly differs depending on the congestion level. Indeed, from a 3.3% price reduction when wind production doubles, the reduction jumps to 5.5% during uncongested hours, but is only 0.8% when congestion prevails. Similarly, avoided GHG emissions due to wind are estimated to 331.93 kilograms per megawatt-hour (kg/MWh) using all data, while for uncongested and congested hours, estimates are respectively 283.49 and 393.68 kg/MWh. These empirical estimates, being based on 2006-2011 Ontario data, cannot be generalized to other contexts. The main contribution of this paper is to underscore the importance of congestion in assessing the price and GHG impacts of wind. We also contribute by developing an approach to create clusters of data according to the congestion status and location. Finally, we compare different approaches to estimate avoided GHG emissions.

Keywords: Wind energy; Electricity prices; Congestion; marginal GHG emissions. (search for similar items in EconPapers)
JEL-codes: L94 Q4 Q42 (search for similar items in EconPapers)
Date: 2014-01
New Economics Papers: this item is included in nep-ene, nep-env and nep-sog
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