California’s Western Energy Imbalance Market Nears $2 Billion in Cumulative Benefits

The Western Energy Imbalance market generated $739 million in benefits in 2021, the highest annual benefits achieved since the market launched in 2014, according to a Jan. 31 press release from the California Independent System Operator Corporation. This brings the cumulative benefits of the real-time energy market close to the $2 billion mark.

The previous year’s benefits are more than twice the $325 million accumulated in 2020. The market saw $204.14 million in fourth-quarter 2021 benefits, bringing the cumulative total to $1.93 billion. The benefits have increased due to the addition of new entities and an increase in economic transfers volumes, which replaced expensive generations.

In periods of oversupply, the market uses advanced technology to locate and deliver the cheapest energy to its members, while improving reliability and reducing environmental impacts through renewable energy curtailments. As a result of reduced curtailments, greenhouse gas emissions are lower, since renewable energy – that would otherwise go unused – may be utilized by other participants in the market and could potentially eliminate the need for fossil fuels to generate electricity.

Due to the market’s support for renewable energy transfers, 38,044 megawatt-hours of renewable energy curtailment were avoided for the quarter, totalling 1,570,200 megawatt-hours for the period since 2014. Besides the financial benefits, avoiding renewable curtailment has resulted in 671,966 metric tons of greenhouse gas reduction since 2014.

The market is governed by the California grid operator and includes areas of Arizona, Washington, Utah, New Mexico, Idaho, Nevada, Oregon, Montana, and Wyoming, and spreads to the Canadian border.