ABSTRACT
During the period of renewed interest in wind energy after the 1973/1974 incidence of oil prices and delivery being used as a political weapon, power utilities criticized wind for having zero capacity credit (i.e. that wind could not replace other installed capacity and only be counted as an occasional but unpredictable source of energy). The debate was flawed by not using a precise definition of capacity credit, instead being based on a utility-sector tradition of giving fuel-based units full capacity credit but not units using sun or wind power. Life-cycle analyses grew out of earlier techniques such as risk analysis and cost–benefit analysis as a fairly obvious superstructure. Economists had already given a name to the costs that they neglected: externalities. The rigorous definition of direct risk is the probability per unit of time of experiencing one unit of damage or the product of frequency and damage.
