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

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  • Woo, C.K.
  • Horowitz, I.
  • Moore, J.
  • Pacheco, A.

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.

Suggested Citation

  • Woo, C.K. & Horowitz, I. & Moore, J. & Pacheco, A., 2011. "The impact of wind generation on the electricity spot-market price level and variance: The Texas experience," Energy Policy, Elsevier, vol. 39(7), pages 3939-3944, July.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:7:p:3939-3944
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    References listed on IDEAS

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