Western Energy Market Cumulative Benefits Exceed $1.1 Billion

The Western Energy Imbalance market generated $119.3 million in savings in the third quarter of this year, the highest quarterly benefits achieved since the market launched in 2014, according to an Oct. 29 press release from the California Independent System Operator Corporation. This brings the cumulative benefits of the real-time energy market to about $1.11 billion.

Tight supply conditions and high prices resulting from high load conditions during the August heatwave partly contributed to the third quarter results. Regional collaboration in transmitting renewable energy resources across a large geographic area has reduced the need for curtailments, a grid-balancing action that  typically occurs when the output from variable resources exceeds electricity demand. Thanks to the imbalance market, curtailments have reduced by 37,548 megawatt hours in the third quarter and by over 1,280 gigawatt hours overall since 2015. Further, increased generation of zero-carbon power has resulted in cumulative emissions reductions of 549,452 metric tons.

The market constitutes an automated system that secures the lowest-cost energy to serve real-time customer demand over a broad region spanning across multiple western states. The system optimizes resources from a larger and more diverse pool, facilitating integration of surplus renewable that may otherwise be curtailed.

The energy imbalance market began operations in November 2014 by optimizing resources across the California grid operator’s footprint and PacifiCorp balancing authority areas. The market now includes portions of Arizona, California, Idaho, Nevada, Oregon, Utah, Washington, Wyoming, and extends to the border with Canada.

The market is in for a major expansion with the entry of nine balancing authorities by 2022, potentially serving 82 percent of the Western Electricity Coordinating Council’s total load. The benefits of participation include cost savings, higher integration of intermittent resources, and improved operational efficiencies.