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CAISO expansion good for renewables integration, environmental group finds

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

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CAISO expansion good for renewables integration, environmental group finds

Thereare environmental and planning benefits to be had in the creation of a regionaltransmission organization for a broad portion of the western U.S., according tothe Natural Resources Defense Council.

The and others such asutilities in the western U.S. are considering creation of a regional energy market,a move that some believewill bring more system efficiency and benefits to customers. A recent issue brieffrom the NRDC also finds benefits in expanding the California ISO beyond its currentborders into to a regional system operator.

"Expandingthe operational and market functions of the current CAISO footprint across moreof the West, and establishing a governance framework that allows CAISO to act asa regional system operator, can provide many of the tools we need to transitionto renewable energy and reliably and affordably meet the climate challenge,"the paper said.

The NRDCposted its issue brief ahead of CAISO's expected publication of preliminary resultsof regional energy market studies called for under S.B. 350, a bill widely knownfor California's new 50%-by-2030 renewable portfolio standard.

Thatbill also included a statement that it is the intent of the Legislature to providefor the evolution of CAISO into a regional organization, provided that there isa determination that such a transformation is in the best interests of California.CAISO in February kicked off studies to examine the economic and environmental impactsof forming a regional transmission organization.

CAISOhad expected to publishpreliminary findings April 26, but the grid operator on April 25 said release ofthe preliminary studies and stakeholder meetings on the topic scheduled for April27-28 had been postponed.The delay will allow consultants to complete the studies and present findings, CAISOsaid in a market notice.

"Thestudies are complex and interdependent, and the effort to create a regional energymarket is incumbent on clear, comprehensive and accurate study results," thenotice said.

CAISOexpects to reschedule publication of the preliminary study results and meetingsfor late May or early June.

The NRDCis participating in CAISO's stakeholder processes on the matter, and on April 18posted its paper about issues tied to renewable power integration and conventionalpower plant retirements as they apply to expanding CAISO's footprint.

Amongother suggestions, the paper recommends state legislators and regulators in theWest approve the consolidation of the various transmission and electricity balancingareas in the western grid into a regional transmission organization or regionalsystem operator to better manage and more efficiently integrate increasing amountsof renewable power.

RalphCavanagh, co-director of the NRDC's energy program, said the value of a larger gridin bringing more renewables online faster has been clear for some time.

The paperfound that all regional system operators, or RSOs, have been able to reliably integrateincreasing amounts of renewable energy into their systems. Another conclusion inthe paper is that an RSO can help all western states more cost-effectively complywith federal and state pollution and energy procurement mandates and goals by providingaccess to lower-cost renewable power from throughout the region.

If CAISOexpands beyond its existing footprint, a regional entity need not have all of thetraits of other RTOs, the paper said. For instance, capacity markets are not neededout West for resource adequacy purposes.

"Statescan continue to maintain their role in determining resource adequacy, and in conjunctionwith the states, an expanded regional grid operator can continue to utilize a modelsimilar to what CAISO already employs, to ensure sufficient generating capacityexists in the future," the paper said.

Cavanaghsaid utilities and regulators are very good at long-term resource planning, supportingresource development with a portfolio of contracts, and investing in energy efficiency.

"We'vegot a robust structure in place for resource adequacy. What we [is] need betterintegration and coordination, and that's what the ISO would bring," he said.

A well-organized,integrated grid is needed to take maximum advantage of opportunities identifiedin the issue paper, Cavanagh said. Along with the renewable and environmental benefits,the paper said RTO planning can lead to better identification of system needs, avoidoverinvestment in infrastructure, better use the existing system, and better justifynew infrastructure when it is needed.

The paperrecommended that authorities approve expanding the CAISO platform across the West,saying that will save resources and time and facilitate a more rapid system transformation.