Decarbonization of the global energy system is becoming increasingly essential to combat the threat of future global climate change. An important objective of this thesis is to evaluate the potential of wind energy as a cost effective means to reduce CO₂ emissions. Winds adopted in this thesis are derived from assimilated meteorological fields: GEOS-5 by the GMAO/NASA with a global coverage and RUC-20 by the NCEP/NOAA with more detailed information for North American regions. A spatial analysis approach based on geographical information system (GIS) was developed to analyze the technically available wind resource. The results suggested that a global network of land-based 2.5-MW turbines restricted to non-forested, ice-free, non-urban areas operating at capacity factors (CFs) no less than 20% could supply more than 40 times total current global consumption of electricity.

The economic factors constraining exploitation of the potential for wind power were further analyzed for China and the U.S. A spatial financial model was developed to simulate investment environments for the wind project subject to China's concession policy. The results of this analysis suggest that wind could accommodate all of the demand for electricity projected for 2030 in China assuming a guaranteed bus-bar price of 0.516 ¥/kWh (about 7.6 ¢/kWh) over the concession period, typically the first ten operational years of wind farms.

In the U.S., the major incentive instruments for wind energy are the nationwide production tax credit (PTC), and the renewable portfolio standards (RPS) adopted in many states. The profitability and competiveness of onshore wind power in the U.S. were investigated using a spatial financial analysis considering geographically differentiated costs of local grid connection and CFs for hypothetical wind farms. The results from this study suggest that the potential for profitable electricity from wind at the current PTC subsidy (2.1 ¢/kWh) amounts to more than seven times present U.S. demand for electricity. The current subsidy PTC level is at a critical point in determining the competitiveness of wind-generated electricity under normal costs.

The implications of the potential mismatches between demand for electricity and the variable supply available from wind were explored by taking the electric grid system of Texas (ERCOT) as a case in point. The particular objective of this study is to investigate quantitatively the savings in CO₂ that could be realized at different levels of wind penetration and the cost of these savings in comparison to a reference case, for which the anticipated additional electricity was assumed to be supplied by a combination of coal and gas systems. The results suggest that the bus-bar price for electricity in the grid system would increase by about 1.1 ¢/kWh at a wind penetration level of 30%, by about 3.4 ¢/kWh at a penetration level of 80%. Corresponding costs for reductions in CO₂ range from $23/ton to $60/ton.