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 t...

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Bibliographic Details
Published in:The Electricity journal 2023-06, Vol.36 (5), p.107287, Article 107287
Main Authors: Du, Xiaodong, Zhao, Yue, Brooks, Adria E.
Format: Article
Language:English
Subjects:
Competitive Renewable Energy Zone
Network analysis
Spatial dependence
Transmission network
Wind energy
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Summary: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.
ISSN:1040-6190
1873-6874
DOI:10.1016/j.tej.2023.107287