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California implements market redesign
1 May 2009
California has implemented a new electricity market redesign that includes a shift to a nodal pricing system and a day-ahead market for energy, which had been missing since the California Power Exchange closed in 2001. Neither aspect of the redesign is expected to have much impact on wind power sales, except for some older plant that no longer operate with fixed power purchase agreements (PPAs). About 95% of the electricity market in California is tied to fixed contracts. The nodal market determines spot market prices for electricity at any given time, based on about 3000 nodes, or geographic locations, throughout California, as opposed to the three zones used previously. The main impact for wind power is that a more accurate picture of the cost of transmission bottlenecks on power prices will be available, with the prospect that the greater visibility will drive a better approach to increasing capacity on transmission wires for uptake of more wind, says Seth Hilton of law firm Stoel Rives.
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