Wind Correlation Penalty

Similar to the ‘solar correlation penalty’, the Wind Correlation Penalty is short-hand for describing how unit VWA Prices suffer across wind farms because of a high correlation of wind yield patterns.

This is particularly strong in VIC and SA regions – which are the regions:

1)  Where the build-out of wind capacity has advanced to a greater extent; and also

2)  That are (especially in terms of the electricity grid):

(a)  smaller geographic areas compared to QLD and NSW, for instance.

(b)  that are subject to quite correlated wind patterns.

This term was initially used on WattClarity a number of years ago.

A number of articles have been written on WattClarity to reference the ‘wind correlation penalty’, with some tagged that way (when we have remembered).