Yesterday, CAISO and PacifiCorp announced that they will be partnering to design and implement an Energy Imbalance Market (EIM). Slated to be fully operational by October of 2014, the EIM enables participants’ electricity to move much more efficiently through the grid. Instead of scrambling to keep up with energy supply and demand, EIM allows for utilities to sell their power to their neighbors making both parties better off. Utilities will now be able to exchange electricity at five minute intervals via computer instead of in one hour intervals by telephone that was formally the case.
The increased adoption of renewables, and the uncertainly surrounding their generation schedules, is one of the major reasons the EIM is to be developed. Past EIMs that have been utilized in other areas of the United States have been very successful in adjusting to fluctuations in energy supply and have saved end consumers money. The Southwest Power Pool implemented an EIM in 2007. Initial research showed that the EIM would provide a financial benefit of $600 million while incurring just $212 million in costs. Follow-up studies have since determined that the benefit of $600 million was underestimated by around 20%.
This news is especially good for GNARUM because this will require the generators of renewables to provide accurate forecasts to the system operators and this sets precedence for other ISOs and utilities to form EIMs in other parts of the country. To find out more about the EIM, you can access CAISO’s EIM “Fast Facts” here or read the American Wind Energy Association’s recap of the EIM here.