So, Texas constructed a market that allows it to take advantage of Federal dollars being credited to other market participants (energy providers) in the most efficient way possible.
The author didn't clarify the "complicated" market, but my assumption of the highest-price-to-everyone mechanism is that ERCOT only selects a limited subgroup of all bidders each auction period, according to whatever is most economical for ERCOT. So there is some incentive to keeping your bid low.
What I don't understand is how anyone who isn't benefiting from the tax credits could bid at or below zero. The author seems to indicate that wind did not meet 100% of the need during the negative price period and did not indicate anyone else was receiving tax credits beyond wind producers. So how was the highest price in the negatives? Someone had to have costs associated with the electricity they were producing within the 70% that wasn't wind-powered.
The author didn't clarify the "complicated" market, but my assumption of the highest-price-to-everyone mechanism is that ERCOT only selects a limited subgroup of all bidders each auction period, according to whatever is most economical for ERCOT. So there is some incentive to keeping your bid low.
What I don't understand is how anyone who isn't benefiting from the tax credits could bid at or below zero. The author seems to indicate that wind did not meet 100% of the need during the negative price period and did not indicate anyone else was receiving tax credits beyond wind producers. So how was the highest price in the negatives? Someone had to have costs associated with the electricity they were producing within the 70% that wasn't wind-powered.