ORIGINAL REPORTING: California's Plan To Build A Western Power Market
Taming the Wild West: CAISO begins study of a full regional electricity market; The grid operator will seek to understand how a regional system will affect the state's transition to 50% renewables by 2030
Herman K. Trabish, February 22, 2016 Utility Dive)
Editor’s note: Since this story was reported, the planning to regionalize Western markets has slowed but continues.
California's electric system operator is studying the possibility of turning the 38 individual balancing authority areas (BAAs) in the western U.S. into a single market richer in resources than the Midcontinent Independent System Operator (MISO) or the PJM Interconnection. But first, crucial questions need to be answered by the California Independent System Operator (the CA ISO) about who will pay, who will benefit, and what kinds of energy the system will carry. The concept of regional markets emerged in the mid-to-late 1990s and a national discussion about organized markets' efficiencies followed but Western BAAs were unwilling to give up their independence. They now see more variability from the growth of renewables and realizing the region’s resource and demand diversity can make dispatch more flexible and efficient.
Interest in a regional market accelerated with the successful emergence of the CA ISO’s Energy Imbalance Market (EIM) in 2014 when Warren Buffett’s six state Pacificorp utilities joined with California. A Western region energy market would use the same CAISO technology to “coordinate electricity systems across the West, take full advantage of the region’s renewable resources, and create disincentives to send coal-generated energy to California. Operators’ reduced operational and investment costs and advanced planning and increased situational awareness will lead to lower cost power purchasing… click here for more