Further Expanding the EIM




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Last May, two utilities announced their intentions to join the California ISO Energy Imbalance Market (EIM). Powerex, the energy marketing subsidiary of BC Hydro, intends to join in April 2018 while the Los Angeles Department of Water and Power will enter the following year, April 2019. Powerex will be the first non-US entity to join the EIM.
 
These announcements mark the 10th and 11th utilities to formally voice intentions to participate in the market. Existing EIM participants include PacifiCorp, NV Energy, Puget Sound Energy, and Arizona Public Service; PGE, Idaho Power, Seattle City & Light, BANC/SMUD, and the Salt River Project are all entering within the next three years.
 
So, what is the Energy Imbalance Market? Prior to defining the market, it’s necessary to briefly discuss intermittent resources, and how they correlate to load. California ISO (CAISO) continues to increase its renewable capacity throughout the footprint to meet a 33% Renewable Portfolio Standard (RPS) by 2020. The chart below represents a historical look at capacity in CAISO’s footprint over the past several decades. It wasn’t until 2011 that the footprint began to see drastic increases in solar and wind capacity.
 
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While consistent increases in renewable capacity is a trend that will continue, there remain caveats: the sun doesn’t always shine and the wind doesn’t always blow, even when consumers need power the most. These patterns prevail throughout CAISO and the western US. CAISO’s solution to this disparity is the Energy Imbalance Market. The market’s intent is to smooth imbalances between peak generation for intermittent resources and peak demand by allowing power to be exchanged among participants within the EIM.
 
The EIM provides a mechanism for participants to purchase power at a lower cost to serve consumer demand in the real-time. The California ISO describes the EIM as:
 

“…a real-time wholesale energy market… [It] allows participating balancing authority areas to buy and sell the final few megawatts of power to satisfy demand within the hour it’s needed. The EIM also advances renewable energy integration, leading to a cleaner, greener power system.”

 
Since the market launched in late 2014, success has been measurable. According to the EIM benefits assessment report, benefits have totaled over $173 million since inception with Q1 2017 seeing cost benefits outpace $31 million. In Q1 2017, more than 22,000 metric tons of carbon emissions were displaced by clean energy surpluses in EIM regions. Read more about the CAISO Q1 2017 benefits assessment here.
 
In addition to the above existing and intended participants, El Centro Nacional de Control de Energía (CENACE) and Tucson Electric Power have announced intentions to research the EIM for possible consideration.
 
For additional information or questions on CAISO’s EIM, energy markets or how to use tools within the Velocity Suite, please contact Customer Support.
 
Author:
 
Ryan Klein – Energy Analyst – Power Markets