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Energies
Volume 18
Issue 15
10.3390/en18154019
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This is an early access version, the complete PDF, HTML, and XML versions will be available soon.
Article

Price Impacts of Energy Transition on the Interconnected Wholesale Electricity Markets in the Northeast United States

by
Jay W. Zarnikau
1,*,
Chi-Keung Woo
2,
Kang Hua Cao
3 and
Han Steffan Qi
4
1
Department of Economics, The University of Texas at Austin, Austin, TX 78712, USA
2
Centre for Sustainable Development Studies, Hong Kong Baptist University, Hong Kong, China
3
Department of Accountancy, Economics and Finance, Hong Kong Baptist University, Hong Kong, China
4
Shenzhen Audencia Financial Technology Institute, Shenzhen University, Shenzhen 518060, China
*
Author to whom correspondence should be addressed.
Energies 2025, 18(15), 4019; https://doi.org/10.3390/en18154019
Submission received: 4 July 2025 / Revised: 21 July 2025 / Accepted: 24 July 2025 / Published: 28 July 2025
(This article belongs to the Section A: Sustainable Energy)
Versions Notes

Abstract

Our regression analysis documents that energy policies to promote renewable energy development, as well as hydroelectric imports from Canada, lead to short-run reductions in average electricity prices (also known as merit-order effects) throughout the Northeast United States. Changes in the reliance upon renewable energy in one of the Northeast’s three interconnected electricity markets will impact wholesale prices in the other two. The retirement of a 1000 MW nuclear plant can increase prices by about 9% in the Independent System Operator of New England market and 7% in the New York Independent System Operator market in the short run at reference hubs, while also raising prices in neighboring markets. Some proposed large-scale off-shore wind farms would not only lower prices in local markets at the reference hubs modeled but would also lower prices in neighboring markets.
Keywords: wholesale electricity price; merit-order effect; energy transition; regional transmission organizations; Northeastern U.S. wholesale electricity price; merit-order effect; energy transition; regional transmission organizations; Northeastern U.S.

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MDPI and ACS Style

Zarnikau, J.W.; Woo, C.-K.; Cao, K.H.; Qi, H.S. Price Impacts of Energy Transition on the Interconnected Wholesale Electricity Markets in the Northeast United States. Energies 2025, 18, 4019. https://doi.org/10.3390/en18154019

AMA Style

Zarnikau JW, Woo C-K, Cao KH, Qi HS. Price Impacts of Energy Transition on the Interconnected Wholesale Electricity Markets in the Northeast United States. Energies. 2025; 18(15):4019. https://doi.org/10.3390/en18154019

Chicago/Turabian Style

Zarnikau, Jay W., Chi-Keung Woo, Kang Hua Cao, and Han Steffan Qi. 2025. "Price Impacts of Energy Transition on the Interconnected Wholesale Electricity Markets in the Northeast United States" Energies 18, no. 15: 4019. https://doi.org/10.3390/en18154019

APA Style

Zarnikau, J. W., Woo, C.-K., Cao, K. H., & Qi, H. S. (2025). Price Impacts of Energy Transition on the Interconnected Wholesale Electricity Markets in the Northeast United States. Energies, 18(15), 4019. https://doi.org/10.3390/en18154019

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