By Robert Mullin
The western Energy Imbalance Market continued to boost demand for California’s surplus renewable generation last quarter, extending a trend observed during the first three months of 2016, according to CAISO’s quarterly economic benefits report.
The eight-state EIM — comprising the CAISO, NV Energy and PacifiCorp balancing authority areas (BAAs) — absorbed 158,880 MWh of renewable supply that would have otherwise been curtailed, reducing carbon emissions by 67,970 metric tons through the displacement of thermal generation, the ISO estimates. Avoided curtailments increased by more than 40% compared with the first quarter.
The report showed that CAISO monthly exports into NV Energy increased by an average of 56% over the previous quarter. Much of that energy was wheeled into the PacifiCorp East (PACE) BAA, which has limited direct links with the ISO. Transfer capacity between the ISO and PACE increased from about 200 MW to 570 MW when NV Energy joined the EIM late last year.
While the report did not describe the specific reason for the uptick in transfers, PacifiCorp shut down four coal plants in April and May because of the EIM, according to Jonathan Weisgall, a vice president with Berkshire Hathaway Energy, PacifiCorp’s parent company.
“It is also worth noting that a significant level of energy exported by the ISO consisted of renewables,” CAISO said, although the report did not break down exports by resource type. ISO exports peaked in May, when increased solar output typically coincides with mild weather and modest loads in California.
The EIM provided participants with $23.6 million in gross financial benefits during the second quarter, compared with $18.9 million the previous quarter, the report said. PacifiCorp realized the largest share of benefits at $10.5 million, followed by CAISO at $7.9 million. NV Energy’s take increased threefold over the first quarter to $5.2 million.
Benefits can take the form of either cost savings — such as from reduced need for reserves or greenhouse gas credits — or increased profits from merchant operations. The benefits calculation nets out inter-BAA transfers that were scheduled ahead of the EIM’s 15- and five-minute market runs to avoid attributing contracted flows to the market.
CAISO also estimated the EIM’s effect on the procurement of flexible ramping capacity — resources equipped to respond to system variability stemming from the intermittency of renewable resources.
“Because variability across different BAAs may happen in opposite directions, the flexible ramping requirement for the entire EIM footprint can be less than the sum of individual BAA requirements,” the ISO said, resulting in “flexible ramping diversity savings” stemming from a reduced procurement of flexible resources. It said the EIM produced a 26% reduction in the need for those resources during the quarter.
The EIM has accrued $88.2 million in benefits for its participants since it commenced operation in 2014, according to CAISO. Arizona Public Service and Puget Sound Energy are preparing to enter the market in October 2016, followed by Portland General Electric in October 2017 and Idaho Power in April 2018.
