workshop v - regional resource adequacy v - regional resource adequacy caiso energy imbalance market...

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

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

EIM uses existing structure to provide gradual

participation

• 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

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

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

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)

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

15-minute EIM transfers between PacifiCorp and ISO

(+) 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

EIM & Renewable Integration

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

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

Questions / Discussions?

For more information, please contact:

Khaled Abdul-Rahman

[email protected]

workshop v - regional resource adequacy v - regional resource adequacy caiso energy imbalance market...

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