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Western energy market has provided $213M in savings while supporting renewables

The western energy imbalance market produced $39.52 million in savings in the second quarter of 2017, boosting renewables usage and cutting carbon emissions across the region, as total economic benefits grew to $213.2 million since the California ISO expanded its real-time market to neighboring grid operators in 2014, the independent system operator said in its latest quarterly report.

Optimized energy transfers across the region accounted for the cost savings and provided access to markets for wind and solar power that otherwise would have been curtailed because of excess supply. "If not for energy transfers facilitated by the [energy imbalance market], some renewable generation located within the ISO would have been curtailed via either economic or exceptional dispatch," said the report, released July 31. Those renewable energy transfers totaled 67,055 MWh in the second quarter, displacing an estimated 28,700 metric tons of carbon dioxide and helping the California grid manage its growing oversupply of solar power.

To date, the real-time market has eliminated 204,941 tonnes of carbon dioxide emissions through energy transfers of 479,026 MWh of renewables, according to the report.

The California wholesale grid operator collected $15.49 million in economic benefits for the quarter, the most among the current members. Berkshire Hathaway Energy subsidiaries PacifiCorp and NV Energy Inc. saw benefits of $8.81 million and $4.62 million, respectively. Arizona Public Service Co. tallied $8.13 million in benefits, and Puget Sound Energy Inc. had $2.47 million.

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The expanding market will add several new members by 2020, including Portland General Electric Co. later this year, IDACORP Inc.'s Idaho Power Co. and BC Hydro and Power Authority's Powerex Corp. in 2018, and Seattle City Light, Los Angeles Department of Water and Power, Sacramento Municipal Utility District and the Balancing Authority of Northern California in 2019. Arizona's Salt River Project plans to join in 2020. The expanded market footprint in 2020 will have a maximum transfer capacity of roughly 7,300 MW of one- and two-way power flows.

Despite the economic and environmental benefits provided by the energy imbalance market, it represents "only a fraction" of energy traded in CAISO, Phil Pettingill, the grid operator's director of regional integration, said at a wind energy conference in Seattle last week. "In the California ISO today, about 97% to 98% of all the energy that is transacted is traded in the day-ahead market," he said. "There is a significant value stream when we start thinking about the set of the resources ... in the day-ahead process that are not being reflected in the benefits we are able to show with the [energy imbalance market]."

A proposal to expand the ISO's day-ahead market across the western U.S. requires California lawmakers to pass a law transitioning the grid operator's governing board into an independent, regional body, rather than one appointed by California's governor. "That is a change that we supported and most states in the West supported," Pettingill said.