Merit-Order Effects of Day-Ahead Wind Generation Forecast in the Hydro-Rich Pacific Northwest

An assessment of the performance of the day-ahead wind generation forecast published by Bonneville Power Administration in the hydro-rich Pacific Northwest region finds BPA's daytime forecast unbiased, but not the nighttime forecast. Using market-price regressions to estimate the day-ahead merit-order effects of BPA's forecast finds that the merit-order effect estimates do not materially depend on whether the forecast or actual MW are used, as the forecast and actual wind MW data are highly correlated. Finally, the merit-order effect estimates are small, implying small short-term price-related benefits to end users from wind generation development.