Role of variable renewable energy penetration on electricity price and its volatility across independent system operators in the United States

Abstract

The U.S. electrical grid has undergone substantial transformation with increased penetration of wind and solar — forms of variable renewable energy (VRE). We examine the role of VRE penetration on the system electricity price and price volatility using quantile and skew t-distribution regressions. After correcting for temporal effects, we observe a decrease in price, with non-linear effects on price volatility, for an increase in VRE penetration.

Publication