This working paper is made available by the Resource and Environmental economics and Policy Analysis (REPA) Research Group at the University of Victoria. REPA working papers have not been peer reviewed and contain preliminary research findings. They shall not be cited without the expressed written consent of the author(s).

Editor's Note: The authors’ conclusion regarding ‘effective capacity’, i.e. the measure of a generator’s contribution to system reliability that is tied to meeting peak loads, is that it “is difficult to generalize, as it is a highly site-specific quantity determined by the correlation between wind resource and load” and that ‘values range from 26 % to 0% of rated capacity.” This conclusion is based, in part, on a 2003 study by the California Energy Commission that estimated that three wind farm aggregates- Altamont, San Gorgonio and Tehachpi, which collectively represent 75% of California’s deployed wind capacity- had relative capacity credits of 26.0%, 23.9% and 22.0% respectively. It is noteworthy that during California’s Summer ’06 energy crunch, as has been widely publicized in the press, wind power produced at 254.6 MW (10.2% of wind’s rated capacity of 2,500MW) at the time of peak demand (on July 24th) and over the preceding seven days (July 17-23) produced at 89.4 to 113.0 MW, averaging only 99.1 MW at the time of peak demand or just 4% of rated capacity.