In this paper, we explore two strategies for reducing the cash flow uncertainty of wind power traders ascribed to variable weather conditions. The first strategy is based on the idea of aggregating the output of geographically-dispersed generating units. The second strategy employs financial...

We assess the risk inherent in wind turbine investments that rely on a power market in order to determine the selling price of generated power. Using scenario analysis, we calculate various indexes that attempt to highlight different aspects of the market risk to which the energy producer is...

Crucial for asset allocation and portfolio management is the estimation of volatility and covariance structure of asset returns. Even the simplest Markowitz portfolio construction requires estimates of the mean returns, variance and covariances. Various studies show that the calculation of...