Electricity-market price and nuclear power plant shutdown: Evidence from California
Japan's Fukushima nuclear disaster, triggered by the March 11, 2011 earthquake, has led to calls for shutting down existing nuclear plants. To maintain resource adequacy for a grid's reliable operation, one option is to expand conventional generation, whose marginal unit is typically fueled by natural-gas. Two timely and relevant questions thus arise for a deregulated wholesale electricity market: (1) what is the likely price increase due to a nuclear plant shutdown? and (2) what can be done to mitigate the price increase? To answer these questions, we perform a regression analysis of a large sample of hourly real-time electricity-market price data from the California Independent System Operator (CAISO) for the 33-month sample period of April 2010-December 2012. Our analysis indicates that the 2013 shutdown of the state's San Onofre plant raised the CAISO real-time hourly market prices by $6/MWH to $9/MWH, and that the price increases could have been offset by a combination of demand reduction, increasing solar generation, and increasing wind generation.
- Research Organization:
- Argonne National Lab. (ANL), Argonne, IL (United States)
- Sponsoring Organization:
- USDOE Office of Energy Efficiency and Renewable Energy (EERE)
- DOE Contract Number:
- AC02-06CH11357
- OSTI ID:
- 1392412
- Journal Information:
- Energy Policy, Vol. 73, Issue C; ISSN 0301-4215
- Publisher:
- Elsevier
- Country of Publication:
- United States
- Language:
- English
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