Western grid cooperation gets big returns

Investment Analysis Clubs Macro Economic Trends and Risks
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January 31, 2022

FOLSOM, Calif. – The Western Energy Imbalance Market (EIM) attained a record setting $739 million in benefits in 2021, surpassing all previous yearly results and pushing the real-time market closer to the $2 billion mark in total efficiencies since its start in 2014.

Last year’s benefits are more than double the $325 million accrued in 2020. The market saw $204.14 million in fourth-quarter 2021 benefits, for a cumulative total of $1.93 billion. That level of benefits for the last quarter of 2021 is due to the addition of several new EIM entities earlier in the year and a higher volume of economical transfers, which displaced generation that was more expensive.

“The Western EIM’s outstanding performance last year provides further tangible evidence of the value of broad regional market coordination,” said California Independent System Operator (ISO) President and CEO Elliot Mainzer. “We are excited to be working with our many partners across the West to build on this strong foundation and produce additional economic, environmental and reliability benefits through an extended day-ahead market (EDAM).”

The Western EIM uses sophisticated technology to find and deliver the lowest-co energy to its members, while enhancing reliability and providing significant environmental benefits through the reduction of renewable energy curtailments during
periods of oversupply.

Reducing curtailments leads to lower greenhouse gas emissions because the renewable energy - rather than going unused - can be deployed by other market participants, and may displace power generated using fossil fuels.

http://www.caiso.com/Documents/Western-EIM-achieves-record-s…

Texas ERCOT is turning red and purple because they are isolated from such grid cooperation.

Jaak

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Jaak"Texas ERCOT is turning red and purple because they are isolated from such grid cooperation."

With 28 million people, and 268,597 mi² compared to California - a measely 163,696 mi² but 40 million people crammed in…

We have 70% more land to build our own solar and wind farms.

Now for wind:

CA - “In 2020, wind energy generated within California totaled 13,708 gigawatt-hours (GWh) or 7.18 percent of California’s in-state generation portfolio.”

In Texas - "Texas is the #1 renewable energy generator in the country, producing ¼ of the national total and over 21 percent of all in-state electricity generation.

If Texas were a country, it would rank #5 in the world in total wind energy generation."

" Texas has the largest wind power industry in the USA, which has been possible in great part thanks to deregulation, and not being under the jurisdiction of the FERC. ’

As to connections to the ‘grid’ for diversity, the city of DFW outnumbers the total population of NM, the state to the west. The Houston area outnumbers the total population of OK and AR combined, and the population of San Antonio exceeds the population of the entire state of LA.

During the last crisis in TX, OK had rolling blackouts. AR and LA had rolling blackouts. Do you think they had any spare power to loan to TX…ho ho…a big NOPE. connection to the ‘grid’ with neighboring states would have resulted in ZIP. Not only that, those states were connected to their neighbors who also had no power to spare. Kansas was teetering…TN - nope.

So unless we spent billions and billions and billions to connect to the western grid at 1500 miles of lines (HV megavolt type), which would be used 1% of the time (as if CA had a lot of solar to loan to TX after 6pm when it was 2 below zero in Dallas)… nope…so it would have been useless.

The mentioned plan is to limit solar power excess production in CA - there is too much during the summer and they either have to figure a way to export it and find someone that needs it (and every state is building their own mega solar farms, too, and won’t need it)…it’s shutting down home owners and preventing them from overloading the grid along with other ‘higher cost’ solar farms energy …and producers. They clearly didn’t state what they did at night when the renewable energy excess wasn’t there - and how they suddenly found ‘renewable power’ at night – other than sucking it from out of state (hydro from WA/OR). And hoping the wind lasts a few more hours before it dies.

t.

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t writes:

They clearly didn’t state what they did at night when the renewable energy excess wasn’t there - and how they suddenly found ‘renewable power’ at night – other than sucking it from out of state (hydro from WA/OR).

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Obviously you not understand the Western Energy Imbalance Market (EIM). It includes trading electrical energy between the Western States.

Comparing only CA Grid and not the whole Western Grid State (which includes CA Grid) to TX Grid is a silly.

The Western States Grid is much larger than the TX grid.

The numbers that I posted shows the monetary and reliability benefits of the EIM to Western Grid.

Jaak

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https://www.westerneim.com/pages/default.aspx

https://www.westerneim.com/Pages/About/default.aspx

The ISO’s Energy Imbalance Market (EIM) is a real-time energy market, the first of its kind in the western United States.

The EIM’s advanced market system automatically finds low-cost energy to serve real-time consumer demand across the west. Since its launch in 2014, the EIM has enhanced grid reliability and generated cost savings for its participants. Besides its economic advantages, the EIM improves the integration of renewable energy, which leads to a cleaner, greener grid.

Active Participants
NorthWestern Energy – entered 2021
Los Angeles Department of Water & Power – entered 2021
Public Service Company of New Mexico – entered 2021
Turlock Irrigation District – entered 2021
Salt River Project – entered 2020
Seattle City Light – entered 2020
Balancing Authority of Northern California – entered 2019
Idaho Power Company – entered 2018
Powerex – entered 2018
Portland General Electric – entered 2017
Puget Sound – entered 2016
Arizona Public Service – entered 2016
NV Energy – entered 2015
PacifiCorp – entered 2014
California ISO – entered 2014

Pending Participants
Avista – entry 2022
Tucson Electric Power – entry 2022
Tacoma Power – entry 2022
Bonneville Power Administration – entry 2022
Avangrid – entry 2023
El Paso Electric – entry 2023
WAPA Desert Southwest Region – entry 2023

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If Texas were a country, it would rank #5 in the world in total wind energy generation."

So unless we spent billions and billions and billions to connect to the western grid at 1500 miles of lines (HV megavolt type), which would be used 1% of the time (as if CA had a lot of solar to loan to TX after 6pm when it was 2 below zero in Dallas)… nope…so it would have been useless.

I’m no expert on the electrical grid, but this seems to be an enormous missed opportunity for Texas. Texas has abundant wind and solar resources and huge potential for more. For example, spot prices for electricity often are negative in Texas:

in the Permian Basin in western Texas, and in Kansas and western Oklahoma in the Southwest Power Pool (SPP), negative prices accounted for more than 25% of all hours.

https://www.sciencedirect.com/science/article/pii/S266679242…

Seems to me, the smart thing to do would be to take the excess power and sell it instead of paying people to take it, which increases the rates for Texans.

Especially since more and more states have renewable energy portfolio mandates. They want renewable power. Texas has it, and potential for lots more. Why not make some money?

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And I forgot to mention. Texas Gov. Abbott’s plan to shore up the grid to encourage Bitcoin mining. I’m not kidding.

The idea is that the miners’ computer arrays would demand so much electricity that someone would come along to build more power plants, something Texas badly needs. If the grid starts to go wobbly, as it did when winter storm Uri froze up power plants in February 2021, miners could quickly shut down to conserve energy for homes and businesses. At least two Bitcoin miners have already volunteered to do just that.

https://www.bloomberg.com/news/articles/2022-01-27/texas-gov…

I could be wrong, but I don’t think Bitcoin mining is a stable industry. And hoping Bitcoin miners voluntarily shut down when their business depends on not shutting down seems, I dunno, kinda stupid. It seems easier and more reliable to simply sell power to other states than create an industry which may or may not be there in five years. BWDIK?

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skye:"Seems to me, the smart thing to do would be to take the excess power and sell it instead of paying people to take it, which increases the rates for Texans.

Especially since more and more states have renewable energy portfolio mandates. They want renewable power. Texas has it, and potential for lots more. Why not make some money?"

Well, CA doesn’t need it. AZ is building mega solar farms itself. Same for NM. Same for OK, AR, LA…They all want their own SOLAR and renewable, not have to buy it out of state.

There won’t be a market ANYWHERE other than 1500 miles away, and if you think AR, TN, VA, MD are going to allow gigantic megavolt lines on 400 foot high towers with 600 foot rights-of-way for Texas to sell power to New England states or PA or WV, no way. Heck, they can’t even build a 300 mile line across ME to get Canadian power to MA. No state is going to allow horrendously big power lines to cross it to carry power somewhere else!

And of course, CA won’t need it, nor UT or NV…they too will soon have excesses of solar power they can’t unload anywhere!

Why spend tens of billions to build powerlines that won’t be useful? And when it is 10 deg in TX, it’s usually 10 below in OK City - so they have no spare power. Same in KS - 10 below and using every bit of power they have - won’t be able to loan us any at night. Nor any nearby state within 500 miles.

Of course, the solar nuts will tell you that after to spend $30,000 on solar panels, now you have to spend another $20,000 on batteries so when your grid crashes at night from solar power imbalance and no grid backup for missing solar power… golly gee - $50,000 each house for ‘power’ …

Most folks would rather have the power company spend a few more bucks for robustness…and pay them $100 or $200 a month for their electricity.

t.

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