As wind energy penetration in the US increases, the electricity price is expected to drop due to the so-called merit-order effect (MOE)—wind energy has low operating costs and tends to replace conventional generation.

A recent paper compares the MOE in two US markets with different wind energy penetration, using advanced regression models based on data from 2011-2020. The study reaffirms the connection between wind energy penetration and MOE but also demonstrates that factors unique to each market, such as trading inefficiencies, transmission constraints, and natural gas prices, affect the MOE.

Ajanaku, Bolarinwa A., and Alan R. Collins. 2024. “‘Comparing Merit Order Effects of Wind Penetration Across Wholesale Electricity Markets’.” Renewable Energy 226 (May): 120372. https://doi.org/10.1016/j.renene.2024.120372.