Real-Time Energy Markets Bring Millions in Cost Savings
The California Independent System Operator Corporation (ISO) and Portland-based PacifiCorp have launched the Energy Imbalance Market (EIM). The real-time market—covering California, Oregon, Washington, Utah, Idaho and Wyoming—went live November 1 and is the first of its kind in the West.
EIM analyzes the needs of the grid every five minutes and then automatically finds the lowest cost generation to meet demand. It also reduces the amount of energy reserves utilities have to carry because they can draw on resources from across the West to fill their demand needs.
Although the overall EIM launch was successful, there were some challenges leading to price volatility, primarily in the first 11 hours. The ISO has initiated price corrections for the first 11 full hours after launch and is assessing other price results as part of its normal process.
EIM brings with it significant cost savings. An Energy+Environmental Economics (E3) study released in March 2013 identified savings to consumers of EIM market participants of $21 million to $129 million per year with minimal annual costs to participants. Savings are expected to increase as other energy entities in the West join.
Another benefit of EIM is renewable integration. Wind and solar power generated in one state can be scheduled to meet consumer demand in another. Regional coordination can unlock more efficiency in dispatching renewable resources, can help reduce potential overgeneration of mid-day solar production and assist states in meeting their renewable energy goals.
The EIM also translates into less risk for participants and their consumers. Rather than building an EIM from scratch that could cost tens of millions of dollars, utilities and their service area resources can tap into the ISO’s advanced platform for a modest per-use fee.
The ISO and PacifiCorp will be monitoring the effectiveness of the EIM and reporting its benefits through a quarterly report beginning early next year.
Las Vegas-based NV Energy received approval from the Public Utilities Commission of Nevada to participate in the EIM starting in October 2015.
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