Evaluating the Risk-Reduction Benefits of Wind Energy

    Research output: Contribution to conferencePaper


    This document presents preliminary results of a study to evaluate the risk-reduction benefits of wind power for a case study utility system using decision analysis techniques. The costs and risks of two alternative decisions--whether to build a 400 MW gas-fired combined cycle plant or a 1600 MW wind plant in 2003--were compared through computer simulations as fuel prices, environmental regulatorycosts, wind and conventional power plant availability, and load growth were allowed to vary. Three different market scenarios were examined: traditional regulation, a short-term power pool, and fixed-price contracts of varying duration. The study concludes that, from the perspective of ratepayers, wind energy provides a net levelized risk-reduction benefit of $3.4 to $7.8/MWh under traditionalregulation, and less in the other scenarios. From the perspective of the utility power plant owners, wind provides a significant rist benefit in the unregulated market scenarios but none in a regulated market. The methodology and findings should help inform utility resource planning and industry restructuring efforts.
    Original languageAmerican English
    Number of pages10
    StatePublished - 1996
    EventWindpower 1996: American Wind Energy Association Conference - Denver, Colorado
    Duration: 23 Jun 199627 Jun 1996


    ConferenceWindpower 1996: American Wind Energy Association Conference
    CityDenver, Colorado

    Bibliographical note

    Work performed by: Brower and Company, Andover, Massachusetts; Convergence Research, Seattle, Washington; Tellus Institute, Boston, Massachusetts; and Charles River Associates, Boston, Massachusetts

    NREL Publication Number

    • NREL/CP-22304


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