Analysis of Time-varying Turbulence in Geographically-dispersed Wind Energy Markets

Understanding the time series dynamics of wind speed is of importance to effective wind energy plant operations and businesses exposed to wind-related risk. This article examines the mean wind speed and wind turbulence using an ARMA-GARCH-in-mean framework for different wind energy markets. The methodology allows wind turbulence (i.e., conditional variance) to depend on the size of past wind gusts (i.e., shocks) in the series. The results have several implications for wind energy production. Our findings are summarized as follows: Mean wind speeds measured at different regional locations exhibit persistence and are highly dependent on immediate past wind speed values as well as past surprises in wind speed. However, there are differences in the relationship between wind turbulence and the mean wind speed across the different locations.