Abstract
Using a large sample of 15-minute real-time market (RTM) price data from the Electric Reliability Council of Texas (ERCOT), this paper estimates the RTM price reduction caused by a modest 500-MW renewable generation (RG) capacity expansion in Texas, thereby determining whether RG investors face inadequate investment incentive. Its key findings are: (a) the expansion is highly cost-effective with sufficient investment incentive for RG investors; and (b) a gradual RG development likely benefits Texas’s retail end-users. Hence, Texas should pursue RG growth, lest it triggers substantial increase in costs for transmission expansion and operating reserve.
Published Version
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