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Mount, T., S. Maneevitjit, A.J. Lamadrid, R.D. Zimmerman and R.J. Thomas (2011). The Hidden System Costs of Wind Generation in a Deregulated Electricity Market. Cornell University, Charles H. Dyson School of Applied Economics and Management, Working Paper No. 11.01, Jan 2011, 26 p.Earlier research has shown that adding wind capacity to a network can  lower the total annual operating cost of meeting a given pattern of  loads by displacing conventional generation. At the same time, the  variability of wind generation and the need for higher levels of reserve  generating capacity to maintain reliability standards impose additional  costs on the system that should not be ignored. The important  implication for regulators is that the capacity payments for eachMW of  peak system load is now much higher. Hence, the economic benefits to a  network of using storage, controllable load and other mechanisms to  reduce the peak system load will be higher with high penetrations of  wind generation. These potential benefits are illustrated in a case  study using a test network and a security constrained OPF with  endogenous reserves (SuperOPF).http://www.dyson.cornell.edu/research/researchpdf/wp/2011/Cornell-Dyson-wp1101.pdf