cover image: WORKING PAPER - The Dynamic Impact of Market Integration: Evidence from Renewable

20.500.12592/jj5zvb

WORKING PAPER - The Dynamic Impact of Market Integration: Evidence from Renewable

18 May 2022

To get at the full dynamic gains from trade, one would need to compare these benefits to the costs of building the line and the costs of the solar investment. [...] In the presence of investment delays, the key is to show that price reductions are larger in the dynamic equilibrium than in the static one with no solar investment. [...] We calculate the province-level average node prices and make heat maps for the three time periods: 1) before the interconnection, 2) after the interconnection and before the reinforcement, and 3) after the reinforcement. [...] We show the result of the second approach in this section and include the result of the first approach in the appendix (Table A.4). [...] If this is the case, solar plants were able to receive non-zero prices even during the pre-interconnection period.14 The findings from Figure 6 suggest that incorporating the dynamic impacts of market integration on solar entries can be important part of the value of the transmission expansion.
Pages
63
Published in
United States of America