Department of Agricultural and Resource Economics
University of California, Davis
Institutional Affiliation: University of California at Davis
Information about this author at RePEc
NBER Working Papers and Publications
|August 2018||Setting with the Sun: The Impacts of Renewable Energy on Wholesale Power Markets|
with James Bushnell: w24980
Policies supporting investment in renewable electricity have been a cornerstone of climate policy in many parts of the world. While previous empirical work explores the economic and environmental impacts of renewable production, the focus has exclusively been on the short-run impacts of expanding renewable supply. In this paper, we shed light on the longer run impacts of renewable expansions. Focusing on the California electricity market, we estimate how wholesale electricity prices have responded to a dramatic increase in utility-scale solar capacity. While a substantial decline in daily average prices can be attributed to the solar capacity expansion, this average price impact masks a substantial decrease in mid-day prices combined with an increase in shoulder hour prices. These results ...