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Title: Impacts of variable renewable energy on wholesale markets and generating assets in the United States: A review of expectations and evidence

Abstract

We synthesize available literature, data, and analysis on the degree to which growth in variable renewable energy (VRE) has impacted or might in the future impact bulk power system assets, pricing, and costs in the United States. Most studies of future scenarios indicate that VRE reduces wholesale energy prices and capacity factors of thermal generators. Traditional baseload generators are more exposed to these changing market conditions than low-capital cost and more flexible intermediate and peak-load generators. From analysis of historical data we find that VRE is already influencing the bulk power market through changes in temporal and geographic patterns areas with higher levels of VRE. The most significant observed impacts have concentrated in areas with significant VRE and/or nuclear generation along with limited transmission, with negative pricing also often occurring during periods with lower system-wide load. So far, however, VRE, has had a relatively modest impact on historical average annual wholesale prices across entire market regions, at least in comparison to other drivers. The reduction of natural gas prices is the primary contributor to the decline in wholesale prices since 2008. Similarly, VRE impacts on thermal plant retirements have been limited and there is little relationship between the location ofmore » recent retirements and VRE penetration levels. Although impacts on wholesale prices have been modest so far, impacts of VRE on the electricity market will be more significant under higher VRE penetrations.« less

Authors:
 [1];  [2];  [1];  [1];  [2]
  1. Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
  2. Argonne National Lab. (ANL), Argonne, IL (United States)
Publication Date:
Research Org.:
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States); Argonne National Lab. (ANL), Argonne, IL (United States)
Sponsoring Org.:
USDOE Office of Electricity (OE)
OSTI Identifier:
1615314
Alternate Identifier(s):
OSTI ID: 1580203; OSTI ID: 1812209
Grant/Contract Number:  
AC02-05CH11231; AC02-06CH11357
Resource Type:
Accepted Manuscript
Journal Name:
Renewable and Sustainable Energy Reviews
Additional Journal Information:
Journal Volume: 120; Journal Issue: C; Journal ID: ISSN 1364-0321
Publisher:
Elsevier
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING, POLICY, AND ECONOMY; Variable renewable energy; Electricity markets; Electricity prices; Generator profitability; Variable renewable energyElectricity marketsElectricity pricesGenerator profitability

Citation Formats

Mills, Andrew D., Levin, Todd, Wiser, Ryan, Seel, Joachim, and Botterud, Audun. Impacts of variable renewable energy on wholesale markets and generating assets in the United States: A review of expectations and evidence. United States: N. p., 2019. Web. https://doi.org/10.1016/j.rser.2019.109670.
Mills, Andrew D., Levin, Todd, Wiser, Ryan, Seel, Joachim, & Botterud, Audun. Impacts of variable renewable energy on wholesale markets and generating assets in the United States: A review of expectations and evidence. United States. https://doi.org/10.1016/j.rser.2019.109670
Mills, Andrew D., Levin, Todd, Wiser, Ryan, Seel, Joachim, and Botterud, Audun. Mon . "Impacts of variable renewable energy on wholesale markets and generating assets in the United States: A review of expectations and evidence". United States. https://doi.org/10.1016/j.rser.2019.109670. https://www.osti.gov/servlets/purl/1615314.
@article{osti_1615314,
title = {Impacts of variable renewable energy on wholesale markets and generating assets in the United States: A review of expectations and evidence},
author = {Mills, Andrew D. and Levin, Todd and Wiser, Ryan and Seel, Joachim and Botterud, Audun},
abstractNote = {We synthesize available literature, data, and analysis on the degree to which growth in variable renewable energy (VRE) has impacted or might in the future impact bulk power system assets, pricing, and costs in the United States. Most studies of future scenarios indicate that VRE reduces wholesale energy prices and capacity factors of thermal generators. Traditional baseload generators are more exposed to these changing market conditions than low-capital cost and more flexible intermediate and peak-load generators. From analysis of historical data we find that VRE is already influencing the bulk power market through changes in temporal and geographic patterns areas with higher levels of VRE. The most significant observed impacts have concentrated in areas with significant VRE and/or nuclear generation along with limited transmission, with negative pricing also often occurring during periods with lower system-wide load. So far, however, VRE, has had a relatively modest impact on historical average annual wholesale prices across entire market regions, at least in comparison to other drivers. The reduction of natural gas prices is the primary contributor to the decline in wholesale prices since 2008. Similarly, VRE impacts on thermal plant retirements have been limited and there is little relationship between the location of recent retirements and VRE penetration levels. Although impacts on wholesale prices have been modest so far, impacts of VRE on the electricity market will be more significant under higher VRE penetrations.},
doi = {10.1016/j.rser.2019.109670},
journal = {Renewable and Sustainable Energy Reviews},
number = C,
volume = 120,
place = {United States},
year = {2019},
month = {12}
}