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Energy Imbalance Markets

The anticipated growth of variable renewable generation, such as solar and wind power, in the West has raised concerns about how system operators will maintain balance between electricity production and demand in the Western Interconnection—and especially in its smaller balancing authority areas. This concern helped motivate a proposal to develop an energy imbalance market. An energy imbalance market aggregates the variability of electricity generation and load for multiple balancing authority areas and utility territories, and performs a 5-minute security constrained economic dispatch. This can increase the economic efficiency of the power system. This subhourly, real-time energy market provides centralized, automated, and region-wide generation economic dispatch. By increasing the temporal and geographic footprint of the total balancing authority area, the market could moderate the variability of renewable generation resources and electricity demand.

NREL has worked with the Western Electricity Coordinating Council and others to assess the potential ramping and reserve benefits of several forms of an energy imbalance market. At the request of public utility commissioners in the West, NREL used a detailed electricity production simulation model to obtain deeper insights into the potential benefit of alternative forms of an energy imbalance market. The results were shared with utility commissioners and other stakeholders to inform future decision making for Western Interconnection operations. In 2014, the California Independent System Operator (CAISO) and PacifiCorp will begin operating an energy imbalance market, and NV Energy is expected to join in 2015. Through the MC Initiative, the Northwest Power Pool is currently investigating similar wide-area economic dispatch models, and will evaluate whether an energy imbalance market or similar market will be developed.

For More Information

For more information about NREL's work on energy imbalance markets, see the following resources. Additional publications can be found in the NREL Publications Database.

Contact

Michael Milligan
303-384-6927