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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. Electric utilities are therefore considering the adoption of a large-scale energy imbalance market to address fluctuations in electricity generation and load. In an energy imbalance market, the variability of electricity generation and load is aggregated over multiple balancing authority areas and utility territories.

In the proposed Western energy imbalance market, balancing authority areas would pool their variable and conventional generation resources to improve operational efficiency over a wider area. This subhourly, real-time energy market would provide centralized, automated, and region-wide generation 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 is now working with the Western Interconnection to obtain deeper insights into the potential benefit of an energy imbalance market using a detailed electricity production simulation model. The results will be shared with utility commissioners and other stakeholders to inform future decision-making for Western Interconnection operations.

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.


Michael Milligan