The 2016 CAISO Stakeholder Symposium took place in Sacramento this week.
Western grid regionalization
Panelists presented their unique perspectives on the proposed western regional electricity grid. The proposal, which has been discussed in many public forums, would incorporate the CAISO with many other transmission system operators throughout the West into a single broader balancing authority. Example multi-state balancing authorities are PJM in the Northeast, and MISO in the Midwest.
There was much discussion of two main challenges:
- Governance challenge (who makes the operating rules for this new entity)
- GHG challenge (how will the greenhouse gas accounting scheme work, given that generators in CA are required by state laws to track GHG emissions, and many generators outside of CA are not subject to such requirements)
The governance challenge
There is concern in the environmental community that if California does not dictate the rules and governance structures overseeing the proposed regionally expanded grid, then California’s environmental policies may be weakened (market trading rules may not be designed to ensure/enable the achievement of California’s GHG targets, for example).
The GHG challenge
Environmentally, the benefit of regionalization appears to be this: a larger more diverse grid may be better able to absorb anticipated solar over-generation during certain hours of the day in the next ten years. Without broadening the balancing authority, new solar generators may eventually be subject to curtailment during certain hours, when solar production is at its peak. With a broader balancing authority, that future excess solar generation may gain access to wider markets, enabling sales into markets in neighboring states. This could reduce the risk of solar curtailment, and support the growth of the solar industry.
Sierra Club perspective
Travis Ritchie from the Sierra Club generally opposed regionalization. He pointed out that the regional grid would also give several old, dirty coal generators in Pacificorp territory access to a larger market, and these coal plants would suddenly enjoy an increase in sales, because of their low price of power.
He also pointed out that none of the models are showing that regionalization would necessarily result in significant GHG reductions. He stated that, in the future model scenarios where GHG emissions reductions are achieved, this is due to a change in input assumptions to the model, not due to a change in output model results.
He argued that more confidence in the GHG benefit of regionalization is needed, before pursuing the proposal any farther.
Carl Zichella from NRDC pointed out that the regional grid may enable the high quality (and remote) wind energy resources located in Wyoming to reach the California market, thereby reducing overall GHG emissions of the power mix. He argued that an increase in Wyoming wind activity could also provide new clean jobs for Wyoming’s economy, which is otherwise largely dependent on coal.
Several panelists pointed out that regionalization of the grid has been proposed before, more than once in the last 30 years, and these proposals have not been successful.
However, it was generally agreed by most panelists that the Energy Imbalance Market, newly established in the last few years, is a good first step toward a regional grid. The EIM has enabled energy trading among multiple states in a new format. Within the EIM, GHG attributes are tagged to the kWh for some transactions, but not all transactions (a figure that was tossed out: 20% of the transactions do not include any information about GHG).
Summary of Panel Speakers
|PANEL 1 Regionalism: Through the Lens of Utility Leaders||Western utility executives come together for a coffee table discussion on the opportunity to collaborate regionally.||Moderator: Commissioner Mike Florio
Panelists: Idaho Power, PG&E, Utah munis, BPA, Portland General, APS
|PANEL 2 Expanding the Dialogue: Views Toward Western Collaboration||Experts with diverse viewpoints will explore the potential for a western grid.||ISO New England, California Business Roundtable, Independent Energy Producers’ Association|
|PANEL 3 The Environmental Perspective||A western grid has far reaching environmental implications. Experts will share their views on the long term environmental outlook.||Sierra Club, NRDC, Western Grid Group, Western Resource Advocates|