Significant difference between averaged wind speeds and averaged wind power density, for wind generation modelling? Climate models outputs, particularly the reanalysis datasets, output wind speeds as zonal and meridional averages for the modelled time period (typically 1, 3 or 6 hours). So we get a 2-dimensional vector, the U and V values, each of which is signed. Together, they give us a mean wind speed, and a mean direction.

There are some oddities there, as I understand it. If the wind within one interval were 9 m/s due East for half the time, then 9 m/s due West for the other half, then the UV values would be (0, 0). That's a very contrived case, just to illustrate the netting off for any wind that switches sign on either the U or V directions.

Some reanalysis datasets fix this part of the problem by giving mean wind speeds as well as mean UV components. 

But for the estimation of wind electricity generation , what we really need are the mean power densities ($\mathrm{W/m^2}$ in the vertical plane) of wind, at turbine hub height (typically 80m or so). That way, we can multiply the swept area of the blades, by the mean power densities, and combine with a modified version of the turbine power curve, to estimate electricity generation.

Now, the relationship between wind speeds and power densities is cubic. But the average of a cubed value is not the same as the cube of the averaged value. So, taking the cube of average wind speeds is not the same as taking the average of the cube of wind speeds. And then there's the possibility of positive or negative correlations between wind speeds and atmospheric pressure, which would also mess with the averaging.

Is there an analysis of the impact of these distortions on our ability to model &amp; predict wind power generation?
In ECMWF data, wind direction and wind speed are collected from observation separately. Then based on a well known transformation the wind vectors, u and v are calculated. 

Their documentation: http://www.ecmwf.int/sites/default/files/elibrary/2015/9208-part-i-observation-processing.pdf

You can focus on this part in their documentation:

" **Wind.**There are four wind variables: wind direction(DDD), wind force(FFF),u and v components. For each of these variables the first thing which is done is to get a local copy of it together with its related parameters from an ODB supplied array (GETSETE).Once a variable is made available locally a check is made to ensure that the vertical coordinate is pressure; if instead of pressure a flight level is supplied it is converted into pressure by assuming a standard ICAO atmosphere(Z2PICAO). If the variable in question is either u or v, then DDD and FFF are converted into u and v wind components. Furthermore, for each of the four variables appropriate observation error statistics are assigned (ERRSTAT, FINOERR). Also, if any flags are set at this stage an appropriate word in the local copy is updated (PPVAFL). Finally, an updated local copy of an observed quantity and its related parameters are returned back into the ODB (AIREPBE)."*

Once wind speed and direction are obtained calculations are made to get the two components of wind u and v. 
e.g. 
    $$u = -FFF sin(DDD \frac{\pi}{180})$$
    $$v = -FFF cos(DDD \frac{\pi}{180})$$

In calculating wind power, we need wind speed and not wind direction. If we are given u,v components of wind, we can calculate wind speed as 
$$ U = \sqrt{u^{2} + v^{2}}$$.
Then, the power density,
   $$ P = \frac{1}{2}\rho A U^{3}$$
To sum up when we calculate wind power, what we need is the speed and not the direction. 

This may not answer your question but I hope it may give some hint about it!