Wind projects in New England receive such enormous payments for their generation, they will offer their output to the grid even when prices go negative. Clearly, when low or negative pricing occurs, the best course for the electric power providers is to reduce the production of energy. That's common sense, unless the power producer can be paid handsomely for products attached to their output, " the enhancers ."
Real time wholesale prices in New England averaged $40 per megawatt/hour for the last quarter of 2014. Wind power entering the grid normally is a "price taker"( they would take the price other generators offered the market ), therefore they would receive, on average, $40 per megawatt/hour delivered. They also would receive $62 per megawatt/hour for the renewable energy credit entitled to them by State Government Renewable Portfolio Standard Programs. They also receive $35 per megawatt/hour entitled them through a federal government program named the Production Tax Credit. Some wind plants also receive about $8 per megawatt/hour for "capacity payments " , meaning they cash in for the annual promise to " be there " three years in the future.
Normally, wind doesn't affect the wholesale real time price of electricity, but, because of the ancillary products( " the enhancers" ), which are outside the wholesale energy market ( REC, PTC, capacity guarantee ), the retail, customer price absorbs these payments in the monthly bills. That's a $145 per megawatt/hour gift from the taxpayers and ratepayers.
The New England wholesale electric market has made recent changes to their pricing scheme that allows power producers to make negative offers for their electric output.
A normal market, with no negative offers, as seen during the last quarter, pays plants $40 per megawatt/hour, allowing generators a fair return for their product, Wind power, being the new kid on the block, would have their output curtailed to prevent transmission strain from too much energy feed-in. Wind, as a "price taker ", was chosen for curtailment because other generators were entering realistic offers, while Wind wanted in at any price to get " the enhancers " at $145 per megawatt/hour.
With the new market rules, Wind can now make offers that guarantee their output will not be curtailed. They have a $145 per megawatt/hour enhancement boost that other generators have not and generators with fuel costs can't exist long paying the market to accept their output.
Expanding on this new, market pricing development, it can be shown that high wind penetration will result in higher natural gas prices, as it assumes a new role as a " balancer " for Wind..