Wind power generation impact on electricity price in ERCOT

Abstract

Texas continues to lead as the top wind power producer in the USA. The Electric Reliability Council of Texas (ERCOT) is an Independent System Operator (ISO), transmission operator and reliability coordinator in Texas. In recent years, numerous policies and incentives to promote renewable energies have been enacted. These policies were very appealing to many states including Texas because of its richness in renewable energy potential. It has been almost a year since ERCOT transitioned from the zonal to nodal market operation. This electricity market has seen significant improvements and consumers are reaping the benefits of lower spot electricity price based on a recent ERCOT report for the first 6 months since the transition took effect. This paper discusses the impact of wind power generation, based on favorable renewable energy policies coupled with the transition from zonal to nodal market, on the electricity price. The analysis performed in this paper indicates that it is very difficult to compute fairly the impact of wind energy on electricity price due to the number of uncertain variables involved and the scale of the problems.