The Western EIM (Energy Imbalance Market) is an interregional exchange that is gaining ground as CAISO adopts a larger share of renewable energy production.
What is the Western EIM?
Grid operators use the EIM’s advanced market systems to find the lowest-cost energy to serve real-time customer demand across a wide geographic area. EIM provides transparency on the status of multiple grids.
Who are the Participants of EIM?
CAISO began the Western EIM in the fall of 2014. PacifiCorp was the first entity to cooperate with CAISO. Since then, three more balancing authority areas have joined: NV Energy, Arizona Public Service, and Puget Sound Energy. The EIM currently manages 55% of the electricity sales in the western grid. Six more U.S. balancing authority areas have announced plans to participate through 2020. As a result, the system will cover another 16% of electricity sales in the western US. Finally, Powerex, a subsidiary of the balancing authority of BC Hydro, plans to join the EIM in 2018 and will be the first non-U.S. entity to participate.
How Does the Western EIM Work?
The EIM allows participants to buy and sell power closer to the time electricity is consumed. The EIM awards bids for 15-minute intervals. It also dispatches generating units every 5 minutes to correct supply and demand. EIM reduces mismatches without using generators held in reserve. The sub-hourly dispatch increases grid responsiveness, while allowing for better integration of wind and solar resources..
What are the Tangible Benefits?
The benefits of the Western EIM are three-fold:
- First, sub-hourly trades can lower generation costs. CAISO calculates cost savings by comparing the cost of generation that was dispatched with the estimated cost of what would have been dispatched in the absence of the EIM. EIM generates cost savings if an area can import electricity that would have been more expensive to generate locally. EIM also improves revenues from exports that would not have been scheduled. Since late 2014, CAISO estimates the gross financial benefit for EIM members is about $174 million.
- Second, the EIM also improves the integration of renewable resources, which may be curtailed if there is not a way to store or export excess generation. CAISO estimates that more renewable generation would have been curtailed during periods of oversupply.
- Finally, the EIM can serve to reduce short-term ramps linked to renewable energy. Dramatic swings in the net load profile of a market can be seen in the duck curve. Therefore, the EIM serves to flatten net load profiles that exist in local markets due to peak solar production, while reducing the use of reserve capacity.