Electricity Price Distributions in Future Renewables-Dominant Power Grids and Policy Implications

Contract design for storage in hybrid electricity markets

“…Importantly, a high VRE grid will experience extremities of relative abundance and shortages, meaning the importance of storage as a load-shifter is likely to rise over time in the absence of emissions-free dispatchable resources (e.g. nuclear) (Mallapragada et al, 2021). More generally, the introduction of costeffective storage at scale may challenge the long held assumption of the non-durability of electricity markets with implications for the serviceability of demand and spot pricing.…”

Intermittency or Uncertainty? Impacts of Renewable Energy in Electricity Markets

“…In terms of renewables and price dispersion, Woo et al (2011) and Mallapragada et al (2021) also study price dispersion effects of wind in ERCOT. Compared with Woo et al (2011), our paper studies Texas's market in more recent years, 2012-2019, which allows us to study a period with higher wind penetration, reaching 20% in our sample compared to 10% in their earlier study period.…”

“…Notably, we find that overall renewable energy reduces price dispersion through its dampening effect on prices. Mallapragada et al (2021) simulate wholesale electricity price distributions to 2050 under alternative constraints on carbon emissions. Their results indicate that more renewables increase price dispersion, increasing the frequency of periods of both very low and very high prices.…”