April 1, 2004
Publication:
John F. Kennedy School of Government, Harvard University

The cost of building and operating wind farms continues to decline. And governments increasingly encourage development of renewable energy resources. As a consequence, the amount of wind capacity is growing, raising important questions about the integration of wind output with electric-power systems. These questions have physical (especially reliability) and economic consequences. This report examines the integration of varying amounts of wind capacity (from 200 to 2,000 MW) with a small utility that has a peak load of less than 5,000 MW. The authors developed and applied quantitative methods to calculate the payments and charges to a wind farm from the day-ahead unit commitment through real-time minute-to-minute operations, encompassing four time periods:

1) Day-ahead unit commitment (12 to 36 hours before the operating hour),

2) Real-time dispatch (current operating hour),

3) Intrahour balancing (load following), and

4) Regulation.