The Value of Wind Energy as a Function of Wind Capacity

Analysis suggests that modest amounts of wind receive payments (net of charges for regulation and intrahour balancing) almost equal to the marginal cost of power production. Integration costs are low because the correlations between wind output and system load, as well as their forecast errors, are...

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Bibliographic Details
Published in:The Electricity journal 2004, Vol.17 (6), p.11-20
Main Authors: Hirst, Eric, Hild, Jeffrey
Format: Article
Language:English
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Summary:Analysis suggests that modest amounts of wind receive payments (net of charges for regulation and intrahour balancing) almost equal to the marginal cost of power production. Integration costs are low because the correlations between wind output and system load, as well as their forecast errors, are very low. However, as the amount of wind capacity installed in an area increases, the payment drops.
ISSN:1040-6190
1873-6874
DOI:10.1016/j.tej.2004.04.010