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The cost of wind power variability


  • Katzenstein, Warren
  • Apt, Jay


We develop a metric to quantify the sub-hourly variability cost of individual wind plants and show its use in valuing reductions in wind power variability. Our method partitions wind energy into hourly and sub-hourly components and uses corresponding market prices to determine variability costs. We use publically available 15-min ERCOT data, although the method developed can be applied to higher time resolution data if available. We do not estimate uncertainty costs though our metric can separate integration costs into variability and uncertainty components. The mean variability costs arising from 15-min to 1-h variations (termed load following) for 20 ERCOT wind plants was $8.73±$1.26 per MWh in 2008 and $3.90±$0.52 per MWh in 2009. Load following variability costs decrease as capacity factors increase, indicating wind plants sited in locations with good wind resources cost a system less to integrate. Twenty interconnected wind plants had a variability cost of $4.35 per MWh in 2008. The marginal benefit of interconnecting another wind plant diminishes rapidly: it is less than $3.43 per MWh for systems with 2 wind plants already interconnected, less than $0.7 per MWh for 4–7 wind plants, and less than $0.2 per MWh for 8 or more wind plants.

Suggested Citation

  • Katzenstein, Warren & Apt, Jay, 2012. "The cost of wind power variability," Energy Policy, Elsevier, vol. 51(C), pages 233-243.
  • Handle: RePEc:eee:enepol:v:51:y:2012:i:c:p:233-243
    DOI: 10.1016/j.enpol.2012.07.032

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    References listed on IDEAS

    1. DeCarolis, Joseph F. & Keith, David W., 2005. "The Costs of Wind's Variability: Is There a Threshold?," The Electricity Journal, Elsevier, vol. 18(1), pages 69-77.
    2. Katzenstein, Warren & Fertig, Emily & Apt, Jay, 2010. "The variability of interconnected wind plants," Energy Policy, Elsevier, vol. 38(8), pages 4400-4410, August.
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    Cited by:

    1. Levi, Peter G. & Pollitt, Michael G., 2015. "Cost trajectories of low carbon electricity generation technologies in the UK: A study of cost uncertainty," Energy Policy, Elsevier, vol. 87(C), pages 48-59.
    2. Paine, Nathan & Homans, Frances R. & Pollak, Melisa & Bielicki, Jeffrey M. & Wilson, Elizabeth J., 2014. "Why market rules matter: Optimizing pumped hydroelectric storage when compensation rules differ," Energy Economics, Elsevier, vol. 46(C), pages 10-19.
    3. Rose, Stephen & Apt, Jay, 2015. "What can reanalysis data tell us about wind power?," Renewable Energy, Elsevier, vol. 83(C), pages 963-969.
    4. Hirth, Lion & Ueckerdt, Falko & Edenhofer, Ottmar, 2015. "Integration costs revisited – An economic framework for wind and solar variability," Renewable Energy, Elsevier, vol. 74(C), pages 925-939.
    5. Novacheck, Joshua & Johnson, Jeremiah X., 2017. "Diversifying wind power in real power systems," Renewable Energy, Elsevier, vol. 106(C), pages 177-185.
    6. repec:gam:jeners:v:11:y:2018:i:1:p:144-:d:125807 is not listed on IDEAS
    7. Lion Hirth, 2013. "The Market Value of Variable Renewables. The Effect of Solar and Wind Power Variability on their Relative Price," RSCAS Working Papers 2013/36, European University Institute.
    8. Zifa Liu & Wenhua Zhang & Changhong Zhao & Jiahai Yuan, 2015. "The Economics of Wind Power in China and Policy Implications," Energies, MDPI, Open Access Journal, vol. 8(2), pages 1-18, February.
    9. Ingeborg Graabak & Magnus Korpås, 2016. "Variability Characteristics of European Wind and Solar Power Resources—A Review," Energies, MDPI, Open Access Journal, vol. 9(6), pages 1-31, June.
    10. Astariz, S. & Iglesias, G., 2016. "Output power smoothing and reduced downtime period by combined wind and wave energy farms," Energy, Elsevier, vol. 97(C), pages 69-81.
    11. Hirth, Lion & Ziegenhagen, Inka, 2015. "Balancing power and variable renewables: Three links," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1035-1051.
    12. repec:eee:renene:v:118:y:2018:i:c:p:1052-1063 is not listed on IDEAS
    13. Lion Hirth, Falko Ueckerdt, and Ottmar Edenhofer, 2016. "Why Wind Is Not Coal: On the Economics of Electricity Generation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    14. Lion Hirth & Inka Ziegenhagen, 2013. "Control Power and Variable Renewables A Glimpse at German Data," Working Papers 2013.46, Fondazione Eni Enrico Mattei.


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