Hedging financial risk due to inherent variability of the wind resource has direct benefit to the wind industry. The value of wind indices as a tool to address wind variability is well recognized. This is due to the volumetric nature of wind risk, in that there is uncertainty not only in the price of the energy produced by the wind resource, but also uncertainty in the amount of wind that will occur. Despite the need for an indicator of the relative windiness of an area, in the past it has been difficult to obtain or create a long-term index that is appropriate to supporting bilateral transactions regarding wind risk. This paper presents the results of a study in which an operational wind index was created to fill this need.
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