Western Energy Imbalance Market Amasses Benefits of $10.2M in 2Q

An analysis by the California Independent System Operator (CAL-ISO) released on June 30 reveals that benefits of the wholesale western Energy Imbalance Market (EIM) reached $10.18 million during the second quarter of this year and $21.41 million cumulatively since its launch on November 1, 2014.

CAL-ISO developed the EIM with its partner, PacifiCorp, because the anticipated regional growth of intermittent renewable generation, such as solar and wind power, had raised concerns about how system operators would maintain a balance between electricity production and demand in the Western Interconnection—and especially in its smaller balancing authority areas (BAAs).

Specifically, the EIM uses a sophisticated system to automatically balance demand every five minutes – using the lowest cost energy available across the six-state combined grid. It reduces costs by allowing non-ISO transmission owners to benefit from calling on a lower-priced and wider array of electricity resources to meet demand. It also achieves efficiencies by fine-tuning electricity flows during times of under- or over-generation of energy.

This is the first report in which benefits have been measured based on the five-minute interval market results – which provides more granular information on EIM dispatch and prices. The two previous quarterly reports were calculated based on the 15-minute interval market results.

“The second quarter of 2015 saw more transfers between PacifiCorp and the ISO, which allows lower-cost energy from one area to meet demand in another,” commented Mark Rothleder, vice president, Quality and Renewable Integration, at the ISO.

Transfers during the second quarter reached 260,452 MWh from PacifiCorp to the ISO and 35,368 MWh from the ISO to PacifiCorp, which reflects seasonal changes to system conditions. In the first quarter, 180,412 MWh of energy were transferred from PacifiCorp to the ISO, while 53,613 MWh were exported from the ISO to PacifiCorp.

“This robust activity not only reduces energy production costs but it also means grid operators can more efficiently integrate renewable resources, while meeting environmental goals,” Rothleder said.

The Energy Imbalance Market is a wholesale energy market, which encompasses entities in six states – California and parts of Idaho, Oregon, Utah, Washington, and Wyoming – that can buy and sell energy every 15 minutes, with power plant dispatching every five minutes. Las Vegas-based NV Energy is slated to participate this fall, with Puget Sound Energy of Bellevue, Washington, and Arizona Public Service of Phoenix, Arizona, scheduled to enter the market in October 2016.

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