Grid Operator Tests ‘Imbalance’ Market

By Published On: October 2, 2014

For the first time in its history, the California Independent System Operator is to dispatch energy outside its grid with the formal launch of its “energy imbalance market” with PacifiCorp Nov. 1. On Oct. 1 the nascent market began live testing for 15-minute bidding segments covering six states. The test run is to make sure PacifiCorp software intertwines correctly with the grid operator’s technology. The energy imbalance market test is a “game changer” because it is pushing alterations in grid operations and coordination across the West, said Carl Zichella, Natural Resources Defense Council director of western transmission. “This is an important step forward to realizing the grid for the 21st Century: a better coordinated, flexible, cleaner and more efficient grid, capable of integrating the deep penetrations of renewable energy resources needed to reduce greenhouse gas emissions,” Zichella added. The California grid operator is watching the flow of data in and outside its turf this month and hopes to catch any market glitches in the new software, which seeks to fill in short-term power voids or balance out excesses. It’s expected to smooth the ebb and flow of intermittent renewable resources in California. “We thought it prudent to watch what happens without interrupting the financial markets,” said Steven Greenlee, grid operator spokesperson. PacifiCorp is free of binding financial commitments while the imbalance market is in real-time test mode in October. For example, if it seeks 100 MW Oct. 3, the grid operator can offer it 50 MW from two separate generating units, but PacifiCorp has no obligation to buy the power while the imbalance market is in trial mode. “The imbalance market will run in parallel with PacifiCorp through October and become financially binding on November 1,” Greenlee noted. Prior to its launch of the extra territorial sub-hourly imbalance market, the grid operator wheeled, but did not balance, power imports and exports. The energy imbalance market seeks to cut energy costs and improve the integration of renewable resources. That includes the ability to tap into an expanded region to more effectively use excess wind and solar energy resources that otherwise would go unused. The grid operator and PacifiCorp announced a partnership for an expanded market to balance short term power fluctuations in February 2013. NV Energy is expected to join the imbalance market in 2015. California may be leading, but isn’t alone. Xcel earlier this week formed a smaller coordinated dispatch program in Colorado. The Northwest Power Pool is considering developing an energy market.

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