Flexibility Reserve Reductions from an Energy Imbalance Market with High Levels of Wind Energy in the Western Interconnection

Abstract

The anticipated increase in variable generation in the Western Interconnection (WI) over the next several years has raised concerns about how to maintain system balance, especially in smaller Balancing Areas (BAs). Given renewable portfolio standards in the West, it is possible that more than 50 gigawatts (GW) of wind capacity will be installed by 2020. Significant quantities of solar generation are likely to be added as well. The consequent increase in variability and uncertainty that must be managed by the conventional generation fleet and responsive load make it attractive to consider ways in which Balancing Area Authorities (BAAs) can pool their variability and response resources, thus taking advantage of geographic and temporal diversity to increase overall operational efficiency. Our analysis considers several alternative forms of an Energy Imbalance Market (EIM) that have been proposed in the non-market areas of the WI. The proposed EIM includes two changes in operating practices that independently reduce variability and increase access to responsive resources: BAA cooperation and sub-hourly dispatch. As proposed, the EIM does not consider any form of coordinated unit commitment; however, over time it is possible that BAAs would develop formal or informal coordination plans. This report examines the benefits of several possible EIM implementations, both separately and in concert.