A study of ERCOT real-time energy market price

Deregulation of power industry gives rise to a marketplace with competition as well as uncertainty. Understanding market price volatility and its driving factors is a key for market players to be successful in managing risks and making operational decisions in any electricity market. With this purpose, this paper examines 3.5-year historical real-time energy prices (market clearing price) in ERCOT electricity wholesale market and reveals key determinants driving its fluctuation: natural gas price, system load level. Conclusions made in the paper are based on economics and power market theory as well as results from extensive quantitative analysis.