IEA Electricity Security Advisory Panel (ESAP) & Council of
European Energy Regulators (CEER)
Workshop V - Regional Resource Adequacy
CAISO Energy Imbalance MarketDr. Khaled Abdul-Rahman
Executive Director, California ISO
January 15, 2015
Outline
• Energy Imbalance Market (EIM)
• Renewable Integration
Page 2
EIM Major Milestones
Slide 3
20142013
Feb 2013
EIM MOU
Mar 2013
BOG Authorization
Apr 2013
ISO + PAC sign
Implementation
Agreement &
file with FERCNov 2013
BOG approval
Jan 2014
EIM tariff file
with FERC
May 2014
FERC approval
Nov 2014
EIM activation
Energy Imbalance Market
• Builds on existing market
platform
• No critical mass required
• Easily scalable, offering low-
cost, low risk option to new
entities
• No exit fees
• Preserves BAA autonomy,
including compliance,
balancing, and reserve
obligations
Page 4
EIM uses existing structure to provide gradual
participation
Page 5
• EIM participation can develop gradually
• EIM participants will have transmission rights to reach other
participants
• Assumes 10% of participating areas’ energy is in EIM, but this
can vary
• ISO can leverage existing market and energy management
systems to enable ready implementation
• Existing structure also satisfies regulatory requirements
– Independent non-profit corporation
– Credit policy and financial reporting
– Market monitoring
A participant incurs a one-time cost to join and ongoing
fees based on usage
Page 6
One time3¢ x Total annual energy usage
Example: licensing fees, servers and set up
Usage rate
19¢ x MWh of EIM energy
Example: staff and portions of ISO
systems used to support EIM functionality
On-going
The California ISO proposal recognizes the need
for a governance solution.
• Enable participants to govern the EIM
• Acknowledge that EIM rules will evolve over time with
consideration of the costs and feasibility
• Allow participants to enter and exit the EIM on terms that
are clear and agreed-upon
• Recognize FERC jurisdiction over EIM while avoiding
direct FERC regulation of EIM participants
Page 7
EIM provides multiple benefits
Today:
Each BA must balance loads and
resources within its borders.
In an EIM:
The market dispatches resources
across BAs to balance energy
• Reduce costs by serving imbalance from most economic resources
• Enhances reliability by improving system visibility and responsiveness
• Results in more efficient dispatch of resources within/between BAAs
• Leverages geographical diversity of loads and resources in the market footprint
BA BA
BABA
BA BA
BABA
EIM Benefits
Page 8
EIM expected to provide significant net benefits
Benefits primarily derived from:
• Reduced flexibility reserves
• More efficient dispatch, within and across BAs
• Reduced renewable energy curtailment
ISO/
PacifiCorp study
(in millions)
ISO/NV Energy study on
incremental benefits
(in millions)
APS study
(in millions)
annual
benefits
$21.4 - $129.0 $9.0 - $18.0 (2017)TBD
$15.0 - $29.0 (2022)
start-up
costs
approx. $20.0
($2.5 to ISO)
approx. $11.20
($1.10 to ISO)
TBD
($1.0 to ISO)
annual on-
going costs
approx. $3.00
($1.35 to ISO)
approx. $2.60
($0.75 to ISO)
TBD
($0.65 to ISO)
Page 9
EIM deployment update
• Smooth transition on November 1 with PacifiCorp
relative to scope of implementation.
• EIM dispatching participating resources as designed to
balance real-time supply/demand across the EIM areas.
• Optimized transfers benefiting both supply and demand.
• Experienced some transitional data transfer, software
issues and process learning.
• Tuning new business practices to enhance information
flow between operations and market inputs.
• ISO will track EIM regional benefits and provide quarterly
reports to stakeholders
Page 10
15-minute EIM transfers between PacifiCorp and ISO
Page 11
(+) PacifiCorp to ISO / (-) ISO to PacifiCorp
-1000
0
1000
2000
3000
4000
5000
6000
1-N
ov
2-N
ov
3-N
ov
4-N
ov
5-N
ov
6-N
ov
7-N
ov
8-N
ov
9-N
ov
10
-No
v
11
-No
v
12
-No
v
13
-No
v
14
-No
v
15
-No
v
16
-No
v
17
-No
v
18
-No
v
MW
h
California to PAC PAC to California
The ISO is committed to working cooperatively with
the rest of the West to improve reliability and
efficiency to benefit the entire region
Page 12
EIM & Renewable Integration
Page 13
Current and projected renewable generation
capacity in operation within the ISO
Slide 14
Potential over-generation (LTPP Scenario March, 24, 2024)
Slide 15
Installed
Capacity
(MW)
Nuclear 2,300
Biomas 583
Biogas 320
Geothermal 1,404
QF 5,243
Small hydro
< 30 MW1,163
Imports 3,500
LF Down 2,000
Reg. Down 600
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
19,000
20,000
21,000
22,000
23,000
24,000
MW
QF Nuclear Geothermal Small hydro < 30 MW
Biomas Biogas LF Down Reg. Down
Net_Load_DER Net_load_No_DER
Net Load (No DER)
Net Load (DER)
Qualifying Facilities
Nuclear
Geothermal
Small Hydro
Biomas
Load Following Down
Regulation down
RPS Curtailment in 2024 – 40% RPS Scenario
Page 16
A range of options are available for addressing the
identified flexibility and curtailment issues.
• Modify curtailment provisions in power purchase agreements to
reconcile with RPS priorities
• Increase energy storage and demand response
• Achieve time-of-use rates aligned with regional and seasonal
system conditions
• Electrification of transportation and related managed charging
• Reduce fleet minimum load burden by increasing fleet flexibility
• Deeper regional coordination with other balancing authorities
Page 17
Questions / Discussions?
Page 18
For more information, please contact:
Khaled Abdul-Rahman
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