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

Gil, H.A.; Gómez-Quiles, Catalina; Santos, J.R.

doi:10.1016/j.enpol.2011.11.067

Cited by 76 publications

(27 citation statements)

References 14 publications

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“…Table C3 includes studies that calculate the marginal effect of wind on spot prices. Econometric studies that focus on the average effect of wind, such as Gil et al (2012) are excluded. The units of measure vary, but we create a common measure that identifies the change in the spot price (in €/MWh) given a 1MWh increase in wind generation.…”

Section: Resultsmentioning

confidence: 99%

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Wind, Storage, Interconnection and the Cost of Electricity Generation

Cosmo

Valeri

2017

SSRN Journal

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We evaluate how increasing wind generation affects wholesale electricity prices, balancing payments and the cost of subsidies using the Irish Single Electricity Market (SEM) as a test system, with hourly data from 1 January 2008 to 28 August 2012. We model the spot market using a system of seemingly unrelated regressions (SUR) where the regressions are the 24 hours of the day. Wind has a negative impact on the system marginal price, with every MWh increase in wind generation (equal to about 0.2% of the average wind generation in our sample) leading to a decrease of the system marginal price of €0.018/MWh, or about 0.3% of its average value. We use time series models to analyse the balancing market and show that wind generation increases balancing payments, as do the forecast errors of demand and wind. Every MWh of additional wind generation is associated with an increase in constraint payments of €3.2, or about 0.01%. Lack of storage increases the impact of wind on balancing payments whereas the lack of interconnection has no effect. Overall, wind decreases costs through its effect on the electricity price more than it increases constraint payments, even when storage is on outage. The effect of wind remains positive after including the cost of subsidies given to wind generation.

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Section: Resultsmentioning

confidence: 99%

“…For Germany and Austria, see Würzburg et al (2013) and Cludius et al (2014); for Spain, Gelabert et al (2011) and Gil et al (2012); for Australia, Forrest and MacGill (2013).…”

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confidence: 99%

Wind, Storage, Interconnection and the Cost of Electricity Generation

Cosmo

Valeri

2017

SSRN Journal

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“…According to Jonsson et al [15], day-ahead wind power forecasts are also likely to have an impact on the market price, affecting both the average level and the statistical distribution of the electricity price. For a deeper review of the impact of wind energy on electricity price, readers are referred to Gil et al [16]. For the Spanish case, a reduction of about 4% of the electricity price between 2005 and 2010 associated to the use of renewable energies and cogeneration was reported in Gelabert etal.…”

Section: Introductionmentioning

confidence: 99%

Cost-free feed-in tariffs for renewable energy deployment in Spain

Gallego-Castillo

Victoria

2015

Renewable Energy

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Feed-in-tariff (FIT) schemes have been widely employed to promote renewable energy deployment. While FITs may be perceived by consumers as an extra cost, renewable energies cause a noticeable price reduction in wholesale electricity markets. We analyse both effects for the case of the Spanish electricity market during 2010. In particular, we examine the level of FITs that makes savings and extra costs to be similar on an hourly basis. Results are obtained for a wide range of renewable generation scenarios. It is found that FITs with null extra costs for consumers are in the range of 50-80 e/MWh. Some of the sideeffects of a high penetration of renewable energy in the market are analysed in detail and discussed.

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“…Therefore, an increase in renewables is expected to change and shift the supply curve in such a way that the spot price could be set at lower levels. This effect has been called in the literature the merit-order effect of renewables and has been highlighted in previous studies such as [1][2][3][4][5][6][7][8], among others (for a complete overview of past research on the merit-order effect of renewables, see [9]). A reduction in spot prices is welcomed by consumers and regulators.…”

Section: Introductionmentioning

confidence: 99%

Impact of Wind Electricity Forecasts on Bidding Strategies

Ballester¹,

Furió

2017

Sustainability

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Abstract:The change in the generation mix from conventional electricity sources to renewables has important implications for bidding behaviour and may have an impact on prices. The main goal of this work is to discover the role played by expected wind production, together with other relevant factors, in explaining the day-ahead market price through a data panel model. The Spanish market, given the huge increase in wind generation observed in the last decade, has been chosen for this study as a paradigmatic example. The results obtained suggest that wind power forecasts are a new key determinant for supply market participants when bidding in the day-ahead market. We also provide a conservative quantification of the effect of such trading strategies on marginal prices at an hourly level for a specific year in the sample. The consequence has been an increase in marginal price to levels higher than what could be expected in a context with notable wind penetration. Therefore, the findings of this work are of interest to practitioners and regulators and support the existence of a wind risk premium embedded in electricity prices to compensate for the uncertainty of wind production.

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

Cited by 76 publications

References 14 publications

Wind, Storage, Interconnection and the Cost of Electricity Generation

Wind, Storage, Interconnection and the Cost of Electricity Generation

Cost-free feed-in tariffs for renewable energy deployment in Spain

Impact of Wind Electricity Forecasts on Bidding Strategies

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