ISO PUBLIC ISO PUBLIC Western Energy Imbalance Market and Regional Energy Activities Valerie Fong and John Prescott Western Energy Imbalance Market Governing Body May 20, 2019
ISO PUBLICISO PUBLIC
Western Energy Imbalance Market and Regional Energy Activities
Valerie Fong and John PrescottWestern Energy Imbalance Market Governing BodyMay 20, 2019
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
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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
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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
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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
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ISO PUBLIC
The Western EIM utilizes robust existing transmission capacity
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ISO PUBLIC
Most demand is met in advance of the market through utility-owned or bilaterally procured resources
% T
otal
dem
and
Year-ahead Month-ahead Days-ahead ISO real-time market
Utility-owned energy
Bilaterally procured energy
EIM market transactions
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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
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ISO PUBLIC
Energy Imbalance Market helps avoid curtailment
2016 2017 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
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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
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ISO PUBLIC
Gross economic benefits since start of EIM have reached $650.26M
Slide 12
ISO PUBLIC
EIM Participation and Governance Structure
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Energy Imbalance Market Participants
Body of State Regulators
Regional Issues Forum
EIM Governing BodyCAISO
Board of Directors
ISO Stakeholder
Process
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
Slide 14
ISO PUBLIC
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
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ISO PUBLIC
Day-ahead market enhancements address net load curve and uncertainty previously left to real-time market
Slide 16
• Flexible ramping product will address uncertainty that materializes between day-ahead and real-time markets
ISO PUBLIC
Extending DAM to EIM Entities
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• 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
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
Slide 18
GRC commences
work
Initial discussions
with EIM Governing Body
and Board
EIM Governing Body initiates
charter-mandated
review
Post GRC proposal,
stakeholder comments,revisions
Decision by EIM
Governing Body and
Board
Sector nominations, appointment of members
ISO PUBLIC
Updates on Western EIM
Slide 19
• 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 1st
– Stakeholder comments submitted April 29th
• Extended Day Ahead Market– Feasibility assessment currently underway– Anticipated implementation date in 2022
ISO PUBLIC
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
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