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Measuring the Impact of Wind Power and Intermittency (WP-22-51)

Claire Petersen, Mar Reguant, and Lola Segura

Wind power is crucial to decarbonizing electricity markets but is intermittent, which complicates operational management. The researchers assess the welfare impact of wind power on the Spanish electricity market during the years 2009-2018. They estimate modest adverse effects of wind intermittency on operational costs, even at relatively high levels of wind generation. They examine a policy change that shifted output-based wind subsidies to capacity-based subsidies. The authors find that capacity-based subsidies improved market operations, leading to a reduction in the costs of intermittency. This finding suggests that improved incentive design can diminish the negative impacts of wind intermittency.

Claire Petersen

Mar Reguant, Professor of Economics and IPR Associate, Northwestern University

Lola Segura, Analysis Group

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