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Wind Intermittency and Supply-Demand Imbalance: Evidence from U.S. Regional Power Markets

Author

Listed:
  • Victoria Godwin
  • Matthew E. Oliver

Abstract

Wind is a prominent source of clean electricity but is highly variable due to random changes in wind speeds. Intermittent generation is problematic because electricity supply must match demand at all times with little margin for error. Imbalances are costly, and system operators must respond to them instantaneously. We investigate the relationship between wind intermittency and supply-demand imbalances in electricity systems, using data from major regional power markets in the United States. Results show greater variation in wind generation leads to robust, statistically significant increases in electricity system imbalance. We conduct a cost calculation using a particular kind of ancillary services cost and discuss implications for system operators and renewable energy policies. JEL Classification : L94 - Electric Utilities; Q41 - Energy: Demand and Supply; Prices; Q42 - Alternative Energy Sources; Q54 - Climate; Natural Disasters and Their Management; Global Warming

Suggested Citation

  • Victoria Godwin & Matthew E. Oliver, 2025. "Wind Intermittency and Supply-Demand Imbalance: Evidence from U.S. Regional Power Markets," The Energy Journal, , vol. 46(6), pages 241-269, November.
    • Handle: RePEc:sae:enejou:v:46:y:2025:i:6:p:241-269
    DOI: 10.1177/01956574251366203
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    References listed on IDEAS

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    1. repec:aen:journl:ej40-5-oliver is not listed on IDEAS
    2. Woo, C.K. & Horowitz, I. & Moore, J. & Pacheco, A., 2011. "The impact of wind generation on the electricity spot-market price level and variance: The Texas experience," Energy Policy, Elsevier, vol. 39(7), pages 3939-3944, July.
    3. Erik Paul Johnson & Matthew E. Oliver, 2019. "Renewable Generation Capacity and Wholesale Electricity Price Variance," The Energy Journal, , vol. 40(5), pages 143-168, September.
    4. Paul L Joskow, 2019. "Challenges for wholesale electricity markets with intermittent renewable generation at scale: the US experience," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(2), pages 291-331.
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    Keywords

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    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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