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Effects of wholesale electricity markets on wind generation in the midwestern United States

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  • Dahlke, Steve

Abstract

This paper estimates the effect of starting the Midcontinent ISO electricity market in 2005 on wind generation. An average increase in wind plant capacity factors of 1.7–2.8 percentage points associated with the start of the market is estimated, relative to neighboring wind plants not in the market. These results are robust to potentially confounding variation associated with wind speed differences determined by weather. Policy makers in regions of increasing wind generation should consider expanding the wholesale market region as a tool to deal with variability of renewable generation. Many technical experts and market participants provide anecdotes that competitive wholesale markets are beneficial for wind energy, this analysis provides the first statistical evidence to support that claim.

Suggested Citation

  • Dahlke, Steve, 2018. "Effects of wholesale electricity markets on wind generation in the midwestern United States," Energy Policy, Elsevier, vol. 122(C), pages 358-368.
    • Handle: RePEc:eee:enepol:v:122:y:2018:i:c:p:358-368
    DOI: 10.1016/j.enpol.2018.07.026
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Don Fullerton & Chi L. Ta, 2022. "What Determines Effectiveness of Renewable Energy Standards? General Equilibrium Analytical Model and Empirical Analysis," NBER Working Papers 29783, National Bureau of Economic Research, Inc.
    2. Lucy, Zachary & Kern, Jordan, 2021. "Analysis of fixed volume swaps for hedging financial risk at large-scale wind projects," Energy Economics, Elsevier, vol. 103(C).
    3. Liu, Tingting & Xu, Jiuping, 2021. "Equilibrium strategy based policy shifts towards the integration of wind power in spot electricity markets: A perspective from China," Energy Policy, Elsevier, vol. 157(C).
    4. Heloísa P. Burin & Julio S. M. Siluk & Graciele Rediske & Carmen B. Rosa, 2020. "Determining Factors and Scenarios of Influence on Consumer Migration from the Regulated Market to the Deregulated Electricity Market," Energies, MDPI, vol. 14(1), pages 1-18, December.
    5. Cheng, Shulei & Wu, Yinyin & Chen, Hua & Chen, Jiandong & Song, Malin & Hou, Wenxuan, 2019. "Determinants of changes in electricity generation intensity among different power sectors," Energy Policy, Elsevier, vol. 130(C), pages 389-408.
    6. Tsai, Chen-Hao & Figueroa-Acevedo, Armando & Boese, Maire & Li, Yifan & Mohan, Nihal & Okullo, James & Heath, Brandon & Bakke, Jordan, 2020. "Challenges of planning for high renewable futures: Experience in the U.S. midcontinent electricity market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    7. Steven Dahlke, 2018. "Integrating electricity markets: Impacts of increasing trade on prices and emissions in the western United States," Papers 1810.04759, arXiv.org, revised Oct 2019.
    8. Dahlke, Steven & Sterling, John & Meehan, Colin, 2019. "Policy and market drivers for advancing clean energy," OSF Preprints hsbry, Center for Open Science.
    9. Sugimoto, Kota, 2019. "Does transmission unbundling increase wind power generation in the United States?," Energy Policy, Elsevier, vol. 125(C), pages 307-316.

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    More about this item

    Keywords

    Electricity market; Renewable energy; Wind energy; Energy economics; Wind generation;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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