Renewables Unleashed and Millions Saved in Energy Imbalance Market


Global energy markets are increasingly included renewables and are accommodating the surplus clean energy by making power grid operations more regional.
Renewable energy integration is a challenge that many countries are tackling head-on. Tactics for dealing with the situation include creating a slow but steady campaign, which will redesign their markets. One of the best examples of this regionalisation of energy markets can be seen in the US on the West Coast and in the Pacific North and Southwest.
In the United States, the power grid that connects a wide area called the Western Interconnection is divided into independent balancing authorities (BA). Each of these BAs can assist with integrating renewable energy and matching supply and demand. Of the 38 BAs that operate in the Western Interconnection the largest is the California Independent System Operator (CAISO). In light of California’s declaration that by 2030 they will be running off 50% renewables, CAISO is facing some challenges with regards to how it is going to increase integration of renewables into the power grid. And, to give credit where credit is due, CAISO has accepted those challenges.
In Europe, progress is also being made and there is a plan in place to unify the 42 entities which operate the synchronous grid in mainland Europe. The ultimate aim is to achieve an energy market, which is fully integrated. Of course, this will require completely redesigning the energy market in order to permit energy to move freely throughout Europe without any barriers.
In 2000, CAISO completely changed its market design and enlisted Siemens Energy Management to deal with the tech side of the operations. Ravi Pradhan, portfolio manager at Siemens, explained that the current market is phenomenal but the game is being changed by the development of renewable energy. He recalls sitting in the CAISO control room and seeing prices drop below zero because wind resources boomed and there was an abundance of energy.
CAISO decided not to curtail renewables, instead it has looked for ways in which to use them. Thus came the birth of the Energy Imbalance Market (EIM) in 2014.
“When CAISO started talking about the EIM, it made a lot of sense,” Pradhan said. “You have all that wind up in the Northwest that picks up when you need it down in the south and San Diego; you’ve obviously got all the solar in Nevada, which is slightly offset from a time perspective; and you have all the hydropower in the Northwest. It only made sense to expand the footprint [of the market].”
EIM has, so far, been a huge success – much more than was ever anticipated. Several BAs have already joined the EIM and it is forecasted that more will in the near future. CAISO has calculated the total savings that EIM has afforded to be over $200 million and that 67GWh of fossil fuel energy was replaced by renewables.

The continued development of the EIM and the regionalisation of energy markets does not come without hurdles that need to be jumped. In Europe, for example, there are clear obstacles with regards to Member States and the difference between them with regards to implementing a legal framework for the market. 

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