102 Wind Energy Valuation Studies of development and, where they do exist, may not reflect the actual costs imposed by wind generation very accurately. 1 In addition, where wind is a new or rapidly growing source of energy, it can directly affect the cost of providing energy and ancillary services. From a power system perspective, a more in-depth analysis is called for that includes the effects on ancillary services. Similarly, extensive wind generation can affect wholesale energy market prices as well. For these reasons, where significant amounts of wind generation are contemplated, it is necessary to derive the value of wind generation from an integrated power system point of view, and conduct more detailed analysis of the effect of wind generation on power systems as a whole--the topic of this chapter. The more complex analyses are usually performed using chronological economic dispatch models (CEDMs). CEDMs are used to evaluate the costs and benefits of a wide variety of prospective changes affecting power systems, including acquisition of one or more competing generating resources, changes in market conditions, changing environmental requirements, and acquisition or outages of large power system compo- nents such as transmission lines or substations. CEDMs emulate much, but not all, of the complexity of modern power system operations and analysts often rely on them to assess the economics of a major policy or physical change to the power system. Most complex wind valuation studies are done using CEDMs due to the complexity of the interaction between the time-varying nature of wind generation, demand for power, and the more flexible generators on the system. These models evaluate power system operations through time, finding the least costly generating resources to meet demand over each time increment examined. They depend on inputs such as the operating costs and characteristics (e.g. maximum and minimum generating limits, maximum output change per minute, minimum down times, startup times, minimum run time, etc.). The primary result reported by CEDM runs is the total cost incurred in meeting power demand over the study horizon. In performing valuation studies with CEDMs it will be important to understand the limitations of the available model and ensure that the representation of the power system response is realistic. As pointed out in Chapter 5, models may not be able to capture certain nuances in the planning (unit-commitment) process. Care must also be taken in repre- senting the reserve requirements described in Chapter 6. Costs not typi- cally captured by CEDMs are identified here, but explored more fully in 1 Lack of accuracy stems from both the difficulty of determining the costs of ancillary services for wind, but also the complexity of rate structures that would recover costs in proportion to such difficult-to-measure metrics as variability and schedule accuracy. Tariffs are typically charged on the basis of simpler metrics such as installed capacity or energy generation.