A federal power administrator and two generation and transmission cooperatives serving electric cooperatives in the West and Midwest are strengthening their ability to respond to the challenges of real-time energy dispatch.
Tri-State Generation and Transmission Association,
Basin Electric Power Cooperative and the Western Area Power Administration are the first members of the Southwest Power Pool’s Western Energy Imbalance Service market, which will open in 2021.
This new market will offer the lowest-cost energy resources, provide better utilization of the transmission system and facilitate the integration of large amounts of wind and solar resources, said Southwest Power Pool officials. It will respond to the addition of utility-scale renewables to the grid and an increasingly diverse collection of fossil fuel and hydroelectric generation assets.
“SPP has a proven track record in operating energy imbalance and full day-two markets,” said Paul Sukut, CEO and general manager of Bismarck, North Dakota-based Basin Electric.
Energy imbalance markets trade at five-minute intervals rather than the one-hour intervals associated with the traditional bilateral energy market. Participation creates sales opportunities for generators and provides access to lowest-real-time market pricing for power distributors.
“With the real-time dispatch every five minutes, we expect it will give us better overall economics,” said Tom Christensen, Basin Electric’s senior vice president of transmission, engineering and construction.
“Regional utilities are moving forward together with a cost-effective solution that quickly increases market efficiencies. This will reduce costs and help Tri-State integrate our growing renewables portfolio,” said Duane Highley, CEO of Denver-based
Tri-State Generation and Transmission Association.
Reduced expenses for G&T members are also expected to lead to savings on energy costs for co-op consumer-members, said Highley.
When SPP launched its first energy imbalance market in 2007, primarily serving members in Kansas, Oklahoma and Texas, participants gleaned $103 million in benefits during its first year of operations, SPP officials said.
“We want to do more than just launch a wholesale electricity market in the West,” said Nick Brown, SPP president and CEO. “We want to work with utilities to understand the challenges they face and develop smart solutions that benefit the whole region.”