Wind power plants generate electricity when the wind is blowing, and the plant output depends on the wind speed. Wind speeds cannot be predicted with high accuracy over daily periods, and the wind often fluctuates from minute to minute and hour to hour. Consequently, electric utility system planners and operators are concerned that variations in wind plant output may increase the operating costs of the system. This concern arises because the system must maintain balance between the aggregate demand for electric power and the total power generated by all power plants feeding the system. This is a highly sophisticated task that utility operators and automatic controls perform routinely, based on well-known operating characteristics for conventional power plants, sophisticated decision-support algorithms and systems, and a great deal of experience accumulated over many years. In general, the costs associated with maintaining this balance are referred to as ancillary-services costs. System operators are concerned that variations in wind plant output will force the conventional power plants to provide compensating variations to maintain system balance, thus causing the conventional power plants…

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