Wind generation and zonal-market price divergence: Evidence from Texas

Woo, Chi-Keung; Zarnikau, Jay; Moore, Jack; Horowitz, Ira

doi:10.1016/j.enpol.2010.11.046

Cited by 49 publications

(20 citation statements)

References 62 publications

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“…However, market splitting occurred in 19.1% of the observed hours within the complete data set. A similar pattern of market splitting is reported in Woo et al (2011), between the North and West zones of Texas. In these zones, the development of wind power is equally relevant.…”

Section: Datasupporting

confidence: 76%

“…Our models expose the fact that different sizes of electrical systems play a role in the behaviour of electricity market splitting. Fundamentally, it is also shown that when wind power generation is higher, or more generally with higher low marginal cost electricity such as nuclear power generation, market splitting probability increases, which is consistent with Salic and Rebours (2011) and Woo et al (2011), thereby answering the first research question.…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 53%

“…Literature is scarce on the assessment of the impacts that high penetration of RES-E generation have on interconnected market behaviour and specifically on market coupling. The only study found addressing this issue was done for the Electricity Reliability Council of Texas (Woo et al, 2011), considering the influence of the existing high wind power penetration on the behaviour of the market coupling arrangement.…”

Section: Introductionmentioning

confidence: 99%

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Evaluating the market splitting determinants: evidence from the Iberian spot electricity prices

2015

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Assess determinants on market splitting behaviour of Iberian electricity markets. Logit and non-parametric models to express market splitting probability response. Explanatory variables: wind, hydro, thermal and nuclear power; ATC and demand. Results: increase of market splitting probability with higher availability of low marginal cost electricity. Coordination policies governing both interconnections and renewables deployment. a b s t r a c tThis paper aims to assess the main determinants on the market splitting behaviour of the Iberian electricity spot markets. Iberia stands as an ideal case-study, where the high level deployment of wind power is observed, together with the implementation of the market splitting arrangement between the Portuguese and the Spanish spot electricity markets.Logit and non-parametric models are used to express the probability response for market splitting of day-ahead spot electricity prices as a function of the explanatory variables representing the main technologies in the generation mix: wind, hydro, thermal and nuclear power, together with the available transfer capacity and electricity demand. Logit models give preliminary indications about market splitting behaviour, and then, notwithstanding the demanding computational challenge, a non-parametric model is applied in order to overcome the limitations of the former models.Results show an increase of market splitting probability with higher wind power generation or, more generally, with higher availability of low marginal cost electricity such as nuclear power generation.The European interconnection capacity target of 10% of the peak demand of the smallest interconnected market might be insufficient to maintain electricity market integration. Therefore, pro-active coordination policies, governing both interconnections and renewables deployment, should be further developed.

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Section: Datasupporting

confidence: 76%

Section: Conclusion and Policy Implicationsmentioning

confidence: 53%

Section: Introductionmentioning

confidence: 99%

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Evaluating the market splitting determinants: evidence from the Iberian spot electricity prices

2015

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“…On the other hand, the marginal cost and profit are analyzed when making short-term decisions. Most research therefore has focused on the impact of wind power to energy prices in real-time markets [23]. However, there is no direct analysis on the impact of the variation of energy prices on the financial risk of wind power.…”

Section: B Uncertainty Due To Energy Pricesmentioning

confidence: 99%

Integrated risk management for renewable energy investment over life cycle

Sun

Grijalva

2012

2012 IEEE Energy Conversion Congress and Exposition (ECCE)

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The provision of a financial product for renewable energy requires that the return of the financial product be determined based on the portion of risk it holds. Accurately modeling the risk becomes essential in order to achieve higher penetration of renewable energy in markets. This paper combines the effect of the various types of risks, and shows that the overall risk of renewable energy is not the sum of the individual risks due to each driving factor. The applications of the proposed model are illustrated by two cases: the impact in energy markets and the distribution of profit to different types of risk. Energy efficiency, electricity prices and wind speed, which are associated with potential risks, are modeled as inputs.

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“…The influence of the existing high wind power penetration on the behaviour of electricity price differences was studied for the four ERCOT zones of Texas by Ref. [33], through the use of orderedlogit and log-linear regression models, establishing that high wind power loads in west Texas cause interconnection congestion and electricity price differences with the remaining zones. The RES-E influence on interconnection congestion was also analysed by Ref.…”

Section: Introductionmentioning

confidence: 99%

It is windy in Denmark: Does market integration suffer?

Figueiredo

Silva

Cerqueira

2016

Energy

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Some benefits of spot electricity markets integration include the optimization of renewable power, increasing transmission grid security and the decreasing need for internal generation reserves. The high penetration of wind power is known to have a clear influence on price convergence between electricity markets joined by market splitting. However, in multiple interconnected markets, cross-border flows can also play a role in the market splitting behaviour. Denmark, with a high penetration of wind power, is clearly the ideal case study. This paper aims to assess the influence of high penetration of wind power on the market splitting behaviour between West and East Denmark, taking into account cross-border electricity flows. This is modelled through logit and non-parametric models, estimating the probability of market splitting occurrence between both Danish bidding areas. Market splitting probability is found to be sensitive to wind power, nevertheless with distinct behaviour according to interconnection congestion configuration. The highest availability of wind power in West Denmark, which can reach a generation share of 1.5 times the demand, requires strong cross-border interconnections to allow the export of the excess generation. Policies governing a joint assessment of the requirements for additional interconnection and wind power expansion plans, should be developed.

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Wind generation and zonal-market price divergence: Evidence from Texas

Cited by 49 publications

References 62 publications

Evaluating the market splitting determinants: evidence from the Iberian spot electricity prices

Evaluating the market splitting determinants: evidence from the Iberian spot electricity prices

Integrated risk management for renewable energy investment over life cycle

It is windy in Denmark: Does market integration suffer?

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