Western Energy Imbalance Goes Live
- Feb 3, 2021 11:19 pm GMT
Yesterday was the big day. The Southwest Power Pool (SPP) finally began operating its Western Energy Services market (WEIS). Now we’ll have to sit back and see if the thing works. Will it deliver big on reliability, savings, and carbon cutting? I sure hope so.
For anyone unfamiliar with WEIS, it’s a network of united utilities that have agreed to share power when one member faces any sort of imbalance. The market has been in the works for well over a year now, but only got the green light from FERC at the beginning of last month. So far, a number of regional utilities have signed on: Basin Electric Power Cooperative, Deseret Power Electric Cooperative, Municipal Energy Agency of Nebraska, Tri-State Generation and Transmission Association, Western Area Power Administration, Wyoming Municipal Power Agency.
Of course this market balance idea isn’t novel. In 2007, for example, the SPP launched a very similar market in the middle of the country. It ran until 2014 and by all measures was a success. The balancing market saved participants around $100 million overall. Perhaps inspired by the SPP’s success, CAISO started planning a market of its own for western utilities in 2014. They called it the Western Energy Imbalance Market (WEIM). Utilities have joined in droves, and the market has been lauded for de-balkanizing the region’s saturated utility landscape. Insiders attribute SPP’s program to the popularity of CAISO’s WEIM.
In theory, a well-oiled imablace market should facilitate the integration of renewables onto the grid. The reasons for this are pretty simple: Renewables are basically non-scalable, often leaving utilities short in times of great demand, or conversely, with a glut. The market mitigates this problem by allowing those in need to pull from other sources, and the excess generation to be offloaded to those in need.
Indeed, the WEIS is being marketed as a renewable solution. Duane Highley, the CEO of Tri-State, a member utility, recently projected that the SPP’s five-minute WEIS intra-hour market would play a crucial role in helping the utility meet its carbon-cutting goals, saying: "This is an important first step toward a full RTO in this region to help Tri-State meet its clean energy goals.”
There are some question marks surrounding the project, however. Namely, how will Xcel Colorado’s dual membership to WEIS and WEIM affect operations. It remains to be seen if this so-called “seam” will create any conflicts.
Conflicts are the last thing any western utility needs right now. Between ever intensifying fire seasons, novel consumption patterns, and a desire to cut emissions, utilities in the region are in a tough spot. Many places are ditching green plans out of concerns for power reliability. In December, for example, The Colorado Air Quality Control Commission (AQCC) backed away from a plan to accelerate the closure of three coal plants, after regulators expressed concerns about the "feasibility of the transitions if the closure dates are moved up."
Hopefully, the WEISS, and all other such markets in North America, prove successful. Now, more than ever, we need a smarter and more interconnected grid if we stand any chance at mitigating climate change.
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