Expanding the Massive Benefits of a Decade of Western Grid Integration

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In 2014, the Ice Bucket Challenge was all over the internet, Taylor Swift released her album 1989, and Jimmy Fallon took over The Tonight Show. But 10 years ago this month, something else major happened in the western US. The California Independent System Operator (CAISO) launched the Western Energy Imbalance Market (WEIM) in November 2014, to more efficiently deliver power throughout the region.

During the past decade, the WEIM has saved market participants over $6 billion, while cutting carbon pollution by nearly 1 million tons. More than half of those savings, $3 billion, accrued in the past two years alone, as more and more utilities, clean energy producers, and others across the West joined the WEIM and increased coordination. Today, we celebrate WEIM's benefits to the West while looking forward to new developments like the Extended Day-Ahead Market (EDAM) and the Pathways Initiative that will expand these benefits, further progressing towards a cleaner, more resilient integrated grid.

The WEIM is a real-time electricity market that allows utilities and other wholesale market participants to buy and sell power close to the time electricity is generated. It's the first regional market structure in the west - covering 80% of all electricity customer demand - and its pricing structure creates more sales opportunities for clean energy that otherwise might have been curtailed or gone to waste. It also improves reliability during stressed grid conditions, saves customers money by expanding the availability of lower-cost power, and has reduced regional greenhouse gas emissions by automatically finding lower-cost resources to meet real-time power needs.

The WEIM is a reliability superstar, having helped to balance supply and demand to California and other western states in several instances of excessive heat during the summer, allowing vital resources stay online at lower climate and financial costs to customers throughout the West thanks to the collaboration between neighbors across a broad footprint.

Looking ahead, CAISO's new day-ahead market, the EDAM, will build on the success of the WEIM. It will account for a much larger portion of energy transactions since market participants will be able to identify the resources they will need for the following day and can then buy and sell electricity to meet these needs, which will help smooth out the cost of electricity compared to the fluctuations that occur in the real-time market. This will also help grid operators balance supply and demand and coordinate diverse resource sharing. Through this more efficient resource sharing across a very large region, the EDAM will help further reduce the chances of blackouts, especially during increasingly common heat waves and other extreme weather events.

With EDAM, as with the WEIM, the economic, reliability, and environmental benefits increase with the size of the market footprint. To fully realize these benefits in the EDAM, it is essential to secure the broadest footprint of participation of utility systems and market participants. To that end, the Pathways Initiative, created by western states and stakeholders, will encourage broad participation in EDAM by creating a path to stand up a new governance structure with full independence from CAISO to better capture the breadth of western representation.

Overall, integrating the western grid under the biggest single-market footprint strengthens our ability to meet the many western states' ambitious clean energy goals, enhance reliability in the face of climate change, and lower costs through increased resource sharing.

The WEIM's 10-year milestone marks a successful decade of regional resource sharing, but also symbolizes a critical shift toward an energy future of regional financial, environmental, and resilience benefits in the West. Building on the foundation of the WEIM and looking ahead to EDAM being implemented and Pathways helping to expand the footprint of both markets, we can create a more unified, reliable, and clean western grid.

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