Competitive Renewable Energy Zones Research Articles

Wholesale price dynamics in the evolving Texas power grid

Our study conducts an innovative analysis of the power grid from a network perspective, shedding light on crucial aspects of the wholesale electricity market in Texas. By employing a power system engineering model, we construct a transmission network representation, presenting a novel contribution to the economics literature. Through our analysis of the network matrix, we delve into the characteristics of the Texas power grid, specifically focusing on the structural changes resulting from the Competitive Renewable Energy Zone (CREZ) project and their impacts on nodal prices. The empirical analysis provides additional evidence that ignoring changes in the transmission grid leads to biased estimates of various coefficients. This includes the spatial dependence coefficient, as well as the coefficients associated with control variables such as wind production and load. These empirical findings underscore the significance and distinctive value of network analysis in studying power grids.

An overview of wind energy development and policy initiatives in India.

The Indian renewable energy sector has grown at a compounded annual growth rate of 15.51% in the last five years, where wind growth is about 8%. The Indian government has been adopting changes to create a safe, cheap, and sustainable energy system to fuel vigorous economic growth. The government has made significant efforts in ensuring universal access to energy, giving power to its residents. It is implementing a large-scale deployment of renewable energy, particularly solar and wind. This paper examines the country's wind sector in-depth, including the government policy, financial incentives, and accomplishments. The study goes on to discuss the prospects and problems of the wind sector, as well as solutions to overcome them to reach the estimated target of 140–150 GW by 2030. Wind power growth in the country has weakened in the last few years which may hamper the country’s ambitious renewable energy targets. Wind industry is facing several hindrances ranging from discontinuation of incentives, land acquisition, DISCOM’s poor health, change in bidding scheme, old wind sites, etc. Certain steps, such as repowering outdated wind farms, giving generation-based incentives, tax concessions, reassessing the country’s wind potential, and constructing competitive renewable energy zones could aid in reviving the wind energy sector.Graphical abstract

Transmission Integration and the Market for Congestion Revenue Rights

Texas electricity market saw a recent integration of electricity transmission as a part of Competitive Renewable Energy Zones (CREZ). Exploiting the commissioning date of CREZ based transmission integration as an exogenous shock, we analyze the effect of transmission expansion on market clearing prices of Congestion Revenue Rights (CRR). Reduced form estimates suggest that excess transmission led to a lowering of CRR prices for contracts at all Times of Use. We find strong evidence of spatial, distributional, and firm specific heterogeneity. The paper shows that transmission expansion enhanced efficiency of the CRR market in terms of a spatial convergence in prices and a decrease in aggregate auction expenditure of approximately $260 million over a period of 4.5 years post CREZ.

Promoting Renewable Energy: How Fares the Philippines?

Sustainability is a key component of energy security. To help achieve the global long-term goal of zero-carbon emissions by 2050, the Philippine government has implemented laws, policies, and programs to increase the share of renewable energy (RE). An important example is the feed-in-tariff (FiT) scheme. The share of RE in electricity generation, however, has fallen from 45.4% in 1990 to 21% in 2019, a clear indication that the interventions have not been effective. Main constraints to the expansion of RE are formidable, which include market-based factors, technology inertia, market failure, and political economy issues. Even if policies are designed to overcome these constraints, there has been a delay in the implementation of some of them; but more importantly, many of the interventions do not adhere to the principles underlying sound industrial policy. In particular, policies should abide by the principle of embeddedness, which refers to the coordination between the public sector and private firms that allows the former to be aware of the constraints and opportunities of the latter. To address this problem, policymakers must incorporate said principles and streamline future interventions by anchoring them to three aspects: the moratorium on greenfield coal plants, the study on Competitive Renewable Energy Zones (CREZ), and the serious consideration of incorporating nuclear power in the energy mix. Meanwhile, the COVID-19 pandemic has provided an opportunity to “build back better”. Studies have shown that some “green” fiscal recovery measures have strong multiplier effects and, at the same time, promote sustainability. An example is retrofitting buildings to enhance energy efficiency. The experience of other Southeast Asian countries in designing interventions can be useful but policymakers should acknowledge that one size does not fit all.

Market Impacts of a Transmission Investment: Evidence from the ERCOT Competitive Renewable Energy Zones Project

Texas has experienced a rapid development of wind power over the last 20 years. Since wind power was developed mostly in desolate areas that are remote from urban centers due to its nature conditions, Texas implemented the Competitive Renewable Energy Zones (CREZ) project, the goal of which is to integrate the wind supply regions with the large demand centers. The objectives of this paper are two-fold. The first is to investigate the impact of the CREZ project on market price convergence. Specifically, this paper analyzes the extent that the transmission project affected wholesale price level, variance, and difference between the regions. The second is to measure environmental benefits obtained from displacement of fossil fuel generators by wind power. The results provide a strong evidence for price convergence across the ERCOT market following the completion of the CREZ project. As well as price convergence, wholesale price level and variance are also reduced significantly. Specifically, the results show that the price difference between Houston and West which diverged up to around $100/MWh converges to zero after the project completed. The impacts are more significant during the high demand hours. The results also document significant reductions in emissions, as NOx emissions was reduced by around 4000 pounds in Texas as a whole. Effects on SO2 and CO2 are also calculated.

Transition and Integration of the ERCOT Market with the Competitive Renewable Energy Zones Project

In this study, we seek to explore the impact of a state level transmission expansion project, the Competitive Renewable Energy Zones (CREZ), whose goal is to integrate a massive amount of wind energy, on the wholesale market prices in the Electric Reliability Council of Texas (ERCOT). We find strong evidence for price convergence across ERCOT with accordance to the timing of the expansion of major sections of the CREZ. A variety of empirical analyses shows a gradual transition to a well-integrated market. We also find that regional-specific shocks became more important in terms of driving price change in other regions. Specifically, the impacts of Houston (demand) and the West (wind supply) on each other and the North and South regions have increased significantly. Our study contributes to the literature by connecting the expansion of physical transmission lines with electricity market integration

Transition and Integration of the ERCOT Market with the Competitive Renewable Energy Zone Project

In this study, we seek to explore the impact of a state level transmission expansion project, the Competitive Renewable Energy Zone (CREZ), whose goal is to integrate a massive amount of wind energy, on the wholesale market prices in the Electric Council of Texas (ERCOT). We find strong evidence for price convergence across ERCOT with accordance to the timing of the expansion of major sections of the CREZ. A variety of empirical analyses shows a smooth transition to a well-integrated market. For example, Structural impulse responses suggest that a price shock after the integration takes double the time to die off compared with the before-integration period. We also find that regional-specific shocks became more important in terms of driving price change in other regions. Specifically, the impacts of Houston (demand) and the West (wind supply) on each other have increased dramatically. Our study contributes to the literature by connecting the expansion of physical transmission lines with electricity market integration.

Navigating the Winds of Change

The State of Texas leads the United States in wind energy generation capacity—it has more than twice the wind generation capacity of the next-closest state, California. If Texas was an independent nation, it would rank sixth in the world in total installed wind capacity. Texas has a rich history of legislation and regulatory effort to thank for these statistics, which reflects the knowledge that energy and infrastructure drive the economy. Starting in 1999, Texas became one of the first states to enact a Renewable Portfolio Standard (“RPS”). The RPS set a state-wide goal for new renewable energy installation with deadlines for when that goal was to be met. In addition to passing an RPS, Texas also created Competitive Renewable Energy Zones (“CREZs”). CREZs are areas of Texas that have been designated by the Public Utility Commission of Texas (“PUCT”) to receive special benefits for wind transmission and development due to their strong wind resources and large financial commitments in the region by wind developers. These programs, and several others, have helped the wind industry in Texas grow exponentially to continually reach the goals set out by the RPS long before deadlines arrive. In fact, on a recent day towards the end of March, wind generation accounted for 29% of the electricity used by most Texans.

Alternative Water Resources for Utility-scale Solar Energy Development

Electricity generated from solar energy continues to increase throughout the United States, and several states in the southwestern United States are interested in the development of utility-scale solar energy to meet their established renewable energy portfolios. Water use by utility-scale solar facilities can be quite significant for some technologies, however, which is problematic considering that the best location for solar energy development—the southwestern United States—tends to be an arid environment. The goal of this study was to examine the feasibility of using alternative water resources (reclaimed wastewater and produced water in this study) to meet water demands for utility-scale solar energy development, focusing specifically on Solar Energy Zones (SEZs) and Competitive Renewable Energy Zones (CREZs). Our results indicate that, on average, 100% of the projected demand for water at most SEZs and CREZs could be met by reclaimed wastewater if photovoltaics (PV) are installed. If concentrating solar power (CSP) is installed, fewer SEZs could meet their potential water demand from alternative sources. Only 10 of the CREZs were located near sources of produced water, but of those, 100% of the water demand at the CREZ was met in 8 cases, regardless of the technology installed. Overall, the results from this analysis indicate that alternative waters can play a prominent role in meeting water demand at solar zones in the arid southwest.