Western US Energy Imbalance Market Demonstrates Value

The western EIM created nearly US$6 million in benefits and reduced renewables curtailment in first two months of operation.
Published: Wed 25 Feb 2015

Increasing levels of variable renewable generation such as wind and solar power is giving rise to challenges in maintaining the balance between electricity supply and demand.

One option to achieve this is an ‘Energy Imbalance Market’ (EIM), which implements an automated system to efficiently dispatch resources across multiple balancing authorities in real time for use as short-term balancing resources. In this way, EIM participants can make available and take advantage of generation resources from across an entire EIM footprint rather than just those within the balancing authority area.

Through automation and by broadening the pool of lowest cost resources that can be accessed to balance systems – for example, an excess of wind generation in one area that could be utilized in another – an EIM should reduce system costs and enhance reliability.

Western EIM

The western EIM, which was launched on November 1, 2014 under an agreement between PacifiCorp and the California Independent System Operator (ISO), has now demonstrated such value. The western EIM was formed with the addition of PacifiCorp’s two balancing authorities covering portions of six western states, PacifiCorp-East (PACE) and PacifiCorp-West (PACW) to the existing ISO market within California. The states are California, Oregon, Washington, Utah, Idaho and Wyoming.

Analysis of the first two months of operation produced estimated benefits of US$5.97 million, according to the first quarterly report. This is comprised of an estimated US$1.24 million for the ISO, US$2.31 million for PACE and US$2.42 million for PACW.

“Our analysis shows that EIM’s systems are able to find the absolutely lowest cost power plants across six western states to serve demand,” said Mark Rothleder, ISO Vice President, Market Quality and Renewable Integration. “The estimated benefits are significant and in line with our pre-launch projections.”

A pre-launch study projected annual benefits in 2017 to range from US$21 million to US$129 million, which would accrue to PacifiCorp consumers and ISO wholesale customers.

EIM benefits

During the period the EIM dispatched energy transfers up to 421MW in a 15-minute interval between PACW and the ISO, up to 220MW from the ISO to PACW, and up to 200MW from PACE to PACW. Preliminary estimates of total transfers are approximately 180,786MWh to the ISO from PacifiCorp and 27,361MWh to PacifiCorp from the ISO.

According to the report, the findings reflect the EIM’s ability to account for  more efficient dispatch, both inter- and intra-regional, by automating dispatch every five minutes within PacifiCorp’s two balancing authorities and between the PacifiCorp and California ISO balancing authorities. Renewable energy curtailment is also reduced by allowing balancing authorities to export or reduce imports of renewable generation when it would otherwise need to be economically dispatched down or manually curtailed.

The report comments that although subject to continuously varying market conditions, the benefits are expected to increase as system operations continue to improve with new resources participating and as transfer capability increases or is available during 5-minute intervals.

Further, the benefits demonstrated in the EIM’s first two months indicate that it has the potential to provide benefits to participating entities and their customers for the long term.

Las Vegas-based NV Energy is slated to begin participation in the EIM in October 2015. Discussions are also under way between PUC commissioners across the west of moving towards a regional EIM.

Further reading

California ISO: Benefits for Participating in EIM. 2014 Q4 Report