Research On The Externality Of Wind Power And Design Of The Compensation Mechanism Of Wind Power

Since the21st century, energy crisis has been a general concern of all sort of human society. With the environmental problems that caused by burning fossil fuels, the development prospects of renewable energy become more and more bright. In China, wind power, the most widely used technology and the most mature renewable energy, has become the third largest supply of power, just behind thermal power and water power. While, China’s wind power capacity has been the most and speed of increase of capacity has also been the most in the world, problems in the development of wind power have also been exposed."Junk electricity" and "abandon wind power" phenomenon occur quite often, which in fact hindering the healthy development of China’s wind power.This paper summarizes the research results of domestic and foreign scholars, set the theory of externalities in economics as a starting point, classify positive and negative externalities of wind power. This paper classify positive externalities of wind power into the environmental value of wind power, the social value of wind power and the economic value of wind power, after that, classify negative ones into social cost of wind power and environmental cost of wind power. Then quantify via representative indicators to form a quantitative model of both positive and negative externalities.Lastly, this paper uses an example of a typical wind farm in Inner Mongolia to quantify both positive and negative externalities. Then derived wind power has significant externalities, bodies involved in wind power are multiple and externalities should be internalized. Then, this paper designs compensation mechanism for both positive and negative externalities based on "Pigou tax" approach, draws conclusion that for positive ones government should compensate to wind farm and for negative ones wind farm should compensate bodies who bear the cost that bring by wind farm, amends market failures and loss of efficiency issues caused by externalities, provides appropriate economics basis for policy makers.