A probabilistic model for assessing the long-term economics of wind energy

Understanding the long-term economic impact of wind energy on electricity markets is becoming more important due to the increasing penetration of wind power in the generation mix of power systems. In this paper, we evaluate the economics of wind energy by developing a probabilistic model to compute the long-term probability distribution of market clearing prices and wind farm revenues. The power system is assumed to consist of conventional generating units and wind farms. Availabilities of the generating units and the uncertainty in the wind power output are implicitly accounted for. The effect of increasing wind power penetration on the probability distribution functions of the market price and wind farm revenues is evaluated by changing the rated capacity of the wind farm. The model is illustrated by using a power system with a 32-unit and wind farms. The superiority of the proposed probabilistic model over a deterministic one is confirmed.