Article Coauthored by Analysis Group Manager Explores Benefits and Costs of Wind Production in Spanish Electricity Market
January 5, 2024
Economists from Analysis Group, Stanford University, and Northwestern University have published an article that provides a cost-benefit analysis of intermittency – the natural fluctuation in wind power availability – in the Spanish electricity market. Intermittency is sometimes cited as a disadvantage of wind energy, as it has the potential to place a cost burden on grid operators seeking reliability and congestion reduction.
In their article, “Measuring the impact of wind power and intermittency,” Manager Lola Segura Varo and her coauthors explore these concerns, assessing the impacts of intermittency on the operational costs, prices, and emissions associated with wind energy in Spain. Taking into account Spain’s unique electricity market, as well as government subsidies and environmental regulation measures, the authors analyzed a robust dataset to weigh the intermittency costs of wind power against the net benefits of the renewable energy source.
The authors conclude that overall, despite the challenges posed by intermittency, wind power had net positive impacts for wind producers, consumers, and climate. Moreover, they contend that the negative impacts of renewable intermittency are expected to decrease over time, and that market design solutions offer means of reducing the operational losses associated with accommodating intermittent wind power in the grid.