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Note that average prices fall the most under the high-solar scenario, in every market but ERCOT. Unlike the other states, Texas is a bit isolated, running its own grid with few interconnections to other grids through which it can import or export power. It has to deal with all that solar on its own (more on that later).
Lower prices are good for consumers but bad for owners of big, uneconomic coal and nuclear plants, who rely on high prices to keep running. (Yes, it is a peculiar market in which most of the people responsible, including the president, view low prices as a threat.)
2) VRE bumps fossil fuels off the grid.
In high-VRE scenarios, markets see anywhere from 4 to 16 percent retirement in “firm capacity,” i.e., coal, oil, and steam turbines. The exception is CAISO, which sees a small, 2 to 4 percent boost in firm capacity via the growth of natural gas. (Natural gas also grows in SPP and NYISO, though it’s offset by coal and oil retirements.)
Notably, VRE reduces the amount of energy generated from fossil fuels (MWh) much faster than it reduces capacity (MW), anywhere from 25 to 50 percent (the most in NYISO). Basically, every new kWh from VRE displaces a kWh from fossil fuels.
3) VRE makes periods of very low prices and very low emissions more frequent.
Depending on the market and scenario, high VRE buildout reduces overall carbon emissions anywhere from 21 to 47 percent and “leads to an increase in frequency of hours with very low marginal emission rates ranging from 5% of all hours in CAISO (wind scenario) to 31% in SPP (solar scenario).”
Also more frequent under high VRE are periods in which wholesale power prices are extremely low, under $5 a MWh. (It’s these periods that so wreck the economics of big coal and nuclear plants.) The effect is especially pronounced in ERCOT under high solar.
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