Wind Intermittency and Supply-Demand Imbalance: Evidence from U.S. Regional Power Markets

Wind is a prominent source of clean electricity but is highly variable due to random changes in wind speeds. Intermittent generation is problematic because electricity supply must match demand at all times with little margin for error. Imbalances are costly, and system operators must respond to them instantaneously. We investigate the relationship between wind intermittency and supply-demand imbalances in electricity systems, using data from major regional power markets in the United States. Results show greater variation in wind generation leads to robust, statistically significant increases in electricity system imbalance. We conduct a cost calculation using a particular kind of ancillary services cost and discuss implications for system operators and renewable energy policies. JEL Classification : L94 - Electric Utilities; Q41 - Energy: Demand and Supply; Prices; Q42 - Alternative Energy Sources; Q54 - Climate; Natural Disasters and Their Management; Global Warming