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Large-scale wind power integration and wholesale electricity trading benefits: Estimation via an ex post approach

  • Gil, Hugo A.
  • Gomez-Quiles, Catalina
  • Riquelme, Jesus
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    The integration of large-scale wind power has brought about a series of challenges to the power industry, but at the same time a number of benefits are being realized. Among those, the ability of wind power to cause a decline in the electricity market prices has been recognized. In quantifying this effect, some models used in recent years are based on simulations of the market supply-side and the price clearing process. The accuracy of the estimates depend on the quality of the input data, the veracity of the adopted scenarios and the rigorousness of the solution technique. In this work, a series of econometric techniques based on actual ex post wind power and electricity price data are implemented for the estimation of the impact of region-wide wind power integration on the local electricity market clearing prices and the trading savings that stem from this effect. The model is applied to the case of Spain, where the estimated savings are compared against actual credit and bonus expenses to ratepayers. The implications and extent of these results for current and future renewable energy policy-making are discussed.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0301421511009657
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    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 41 (2012)
    Issue (Month): C ()
    Pages: 849-859

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    Handle: RePEc:eee:enepol:v:41:y:2012:i:c:p:849-859
    DOI: 10.1016/j.enpol.2011.11.067
    Contact details of provider: Web page: http://www.elsevier.com/locate/enpol

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    1. Hurlbut, David & Rogas, Keith & Oren, Shmuel, 2004. "Protecting the Market from "Hockey Stick" Pricing: How the Public Utility Commission of Texas is Dealing with Potential Price Gouging," The Electricity Journal, Elsevier, vol. 17(3), pages 26-33, April.
    2. Twomey, Paul & Neuhoff, Karsten, 2010. "Wind power and market power in competitive markets," Energy Policy, Elsevier, vol. 38(7), pages 3198-3210, July.
    3. Krapels, Edward & Flemming, Paul & Conant, Stephen, 2004. "The Design and Effectiveness of Electricity Capacity Market Rules in the Northeast and California," The Electricity Journal, Elsevier, vol. 17(8), pages 27-32, October.
    4. Kanamura, Takashi & Ohashi, Kazuhiko, 2007. "A structural model for electricity prices with spikes: Measurement of spike risk and optimal policies for hydropower plant operation," Energy Economics, Elsevier, vol. 29(5), pages 1010-1032, September.
    5. MacCormack, John & Hollis, Aidan & Zareipour, Hamidreza & Rosehart, William, 2010. "The large-scale integration of wind generation: Impacts on price, reliability and dispatchable conventional suppliers," Energy Policy, Elsevier, vol. 38(7), pages 3837-3846, July.
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