Wind power producers can, therefore, take whatever price is offered. "If the marginal price is at $40, and the wind plant is operating, it will get $40 per megawatt hour for wind. If the market's at $30, you'll get $30," Smith said. "It's a price taker."
This has a remarkable impact. "When wind comes in," Smith said, "it basically depresses the locational marginal price because it bumps off the highest-priced energy in the market."
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