Western Energy Imbalance Market Reports Over $5 Billion in Savings

The Western Energy Imbalance Market (WEIM) operated by the California Independent System Operator Corp has so far generated over $5 billion in collective economic benefits for market participants since its inception in November 2014, according to the fourth quarter 2023 WEIM benefits report. As it stands, there are 22 market participants in the WEIM and they account for approximately 80 percent of the demand for power in the Western Interconnection. During the fourth quarter of 2023, the WEIM recorded $391.82 million in cost saving benefits, which has increased total savings across California and the West to $5.05 billion. Moreover, the WEIM benefit report highlights that the real time power market has assisted in reducing greenhouse gas emissions by more than 925,568 metric tonnes.

The measured benefits of partaking in the WEIM consist of increased integration of renewable energy sources, cost savings and enhanced operational efficiencies including the reduction of the requirement for real time flexible reserves. Moreover, participation in the WEIM has allowed noteworthy reliability benefits by improving situational awareness, increased business acumen and supporting access to surplus renewable energy across a broader market. A reduction in curtailments leads to diminished greenhouse gas emissions, since the renewable energy, instead of going idle, can be utilized by other market members and may replace electricity produced using fossil fuels.

More recently, the benefit of increased market coordination was evident during the cold spell impacting the Pacific Northwest during the long holiday weekend on January 13-15. During this cold snap, WEIM transfers from California and the Southwest assisted in fulfilling demand across the region in those Western balancing authority areas that required assistance. The WEIM benefit report has been successful in quantifying cost savings due to the increased flexibility and efficiency by WEIM. However, the WEIM also provides critical reliability benefits, which the quarterly benefit reports do not address and instead focus on financial savings and environmental benefits. For example, over the last two summers utilities in California and across the West have significantly profited from the capability of the WEIM to efficiently transport power during extreme events by leveraging the resource diversity.