Western Energy Imbalance Market and Regional Energy Activities - PowerPoint PPT Presentation

Western Energy Imbalance Market and Regional Energy Activities Valerie Fong and John Prescott Western Energy Imbalance Market Governing Body May 20, 2019 ISO PUBLIC ISO PUBLIC

California ISO – Western EIM Market Operator • Uses advanced technology to balance supply and demand every four seconds • Operates markets for wholesale electricity and reserves – Day-ahead, Fifteen and Five minute markets • Manages new power plant interconnections • Plans grid expansions • Operates the real-time EIM that dispatches low cost energy across eight states Page 2 ISO PUBLIC

What is the Western Energy Imbalance Market? • The Western EIM: – Is a real-time 5 and 15 minute energy only wholesale power trading market – Utilizes advanced market systems to automatically find the lowest cost energy to serve real-time customer demand across participating Balancing Authorities – Balances load and generation in real-time – Enables lower cost real time energy transactions between buyers and sellers in eight western states Page 3 ISO PUBLIC

Western EIM provides an easily-scalable extension of real-time market to the broader region • Automated dispatch minimizes cost, facilitates renewables, resolves imbalance & avoids congestion • Greater operational visibility which enhances reliability • Low-cost, low risk, no exit fees, voluntary • Preserves Balancing Authority Area autonomy, including compliance, balancing, and reserve obligations Page 4 ISO PUBLIC

Western EIM currently has 9 entities participating • Seven western entities are scheduled to participate in the Western EIM –BANC/SMUD, 2019 –LADWP, SRP & SCL, 2020 –PNM, NWE & TID, 2021 –Avista & Tucson, 2022 • With the addition of NorthWestern Energy, the market will span across ten western states by 2021 Page 5 ISO PUBLIC

The Western EIM utilizes robust existing transmission capacity Page 6 ISO PUBLIC

Most demand is met in advance of the market through utility-owned or bilaterally procured resources EIM market transactions % Total demand Bilaterally procured energy Utility-owned energy Year-ahead Month-ahead Days-ahead ISO real-time market Page 7 ISO PUBLIC

Why should we care about the EIM? • The west is rich with renewables • When the sun shines, there is oversupply – Supply is higher than demand – Occurs daily and seasonally • Two solutions: – Curtail generation – Find a market for the excess generation • EIM is a market solution allowing excess generation to be sold over an expansive geography • EIM keeps clean renewable resources generating • Participation is voluntary for resources in the EIM Page 8 ISO PUBLIC

Energy Imbalance Market helps avoid curtailment 2017 2016 2018 2019 ISO PUBLIC

How are Greenhouse Gases handled in the EIM? (1 of 2) • California rules for GHG compliance: – Generation inside CA has a compliance obligation – Generation outside CA has a compliance obligation when serving California load – Generation outside CA does not have a compliance obligation when serving non-California load • EIM participating resources submit a separate GHG bid MW quantity and price which expresses willingness to support EIM transfer to ISO Page 10 ISO PUBLIC

How are Greenhouse Gases handled in the EIM? (2 of 2) • When energy is transferred into CA, secondary dispatch outside of CA may occur – Other resources backfill to serve external demand – Emissions associated with backfilling may or may not result in higher emissions • Adopted solution: – Maximum attribution quantity = Top of Energy Bid Curve – Base Schedule – Base schedule is amount of resource planned to serve load outside of ISO Page 11 ISO PUBLIC

Gross economic benefits since start of EIM have reached $650.26M ISO PUBLIC Slide 12

EIM Participation and Governance Structure CAISO EIM Governing Body Board of Directors ISO Body of State Regional Issues Stakeholder Regulators Forum Process Energy Imbalance Market Participants Page 13 ISO PUBLIC

Stakeholder process encourages robust participation • Several ongoing initiatives in the policy and plan development stage fall within the EIM Governing Body’s decisional authority • Additional initiatives planned for 2019 will fall under the EIM Governing Body’s primary and advisory decisional authority ISO PUBLIC Slide 14

Local Market Power Mitigation Enhancements • Real-time market power mitigation process enhancements • New default energy bid for use-limited resources with storage capability – This would apply to hydroelectric resources with reservoirs • Ability to incorporate changes in real-time costs into default energy bids Page 15 ISO PUBLIC

Day-ahead market enhancements address net load curve and uncertainty previously left to real-time market • Flexible ramping product will address uncertainty that materializes between day-ahead and real-time markets ISO PUBLIC Slide 16

Extending DAM to EIM Entities • Key regional benefits: – Allows EIM participants to take advantage of day-ahead market enhancements – Day-ahead unit commitment and scheduling across larger footprint improves market efficiency and – More effectively integrates renewables • Key principles: – Each balancing authority retains reliability responsibilities – States maintain control over integrated resource planning • Resource adequacy procurement, transmission planning and investment decisions remain with each balancing authority or local regulatory authority Page 17 ISO PUBLIC

EIM Governance Review • Phase 1 – Primary authority of EIM Governing Body expanded to include changes to generally applicable rules of real-time market when the initiative’s primary driver is EIM • Phase 2 – Establish a Governance Review Committee to review broader governance structure • Role of the EIM Governing Body – E2, Advisory Authority ; shared with ISO Board of Governors Initial Post GRC EIM Governing Decision by Sector discussions proposal, GRC Body initiates EIM nominations, with EIM stakeholder commences charter- Governing appointment Governing Body comments, work mandated Body and of members and Board revisions review Board ISO PUBLIC Slide 18

Updates on Western EIM • Energy Imbalance Market – More than 2/3 of WECC load will participate by 2022 • EIM Governance Review – Draft Charter and Straw Proposal for formation of a Governance Review Committee posted April 1 st – Stakeholder comments submitted April 29 th • Extended Day Ahead Market – Feasibility assessment currently underway – Anticipated implementation date in 2022 ISO PUBLIC Slide 19

Resources • EIM Computer-based training at: https://www.westerneim.com/Pages/Resources.aspx • EIM Quarterly benefits reports at: https://www.westerneim.com/Pages/About/QuarterlyBenefits.aspx Page 20 ISO PUBLIC