Western Regional Energy Markets: Synergies and Differences

A new fact sheet released by a coalition of organizations (including NRDC) supporting a western integrated grid not only seeks to help unpack the policy choices Californians face, but also makes the case for a regional approach to renewable energy integration and grid management. The results of a western integrated grid will be lower bills, cleaner energy, and more jobs for the region.

And that’s of special interest right now to California lawmakers considering various pieces of legislation to help the state meet its clean energy and climate goals.

The fact sheet is just the latest tool available on the “Secure California’s Energy Future” website intended to help policy makers and the public better understand the importance of regional grid integration. (Check out this really short video explanation here, too.) The Secure California’s Energy Future coalition believes that a fully integrated grid will save Californians billions of dollars in electricity costs, stop the waste of affordable clean energy, and increase reliability—while each participating state maintains control over its own energy policies. A more coordinated grid will also mean more economic prosperity and clean energy jobs throughout the West.  

Why we need regional grid integration

My colleague Ralph Cavanagh and I have both written previously on this topic but here is the shorthand case for regional integration:

As we add more and more renewable power to meet renewable energy and climate goals in California and across the West, we need to use the existing electrical system to its full physical potential and provide access to the lowest-cost clean energy available to reliably meet energy demand in any hour of the day.

Inefficiencies in how the grid is managed can be eliminated by consolidating the 38 control entities currently running smaller parts of the system across the West and also operating the wholesale electricity markets—where utilities, power supplies and others buy, sell, and trade electricity to meet our energy needs. Thus, we allow all western states to meet their energy demand using renewable energy from across the region as much as possible. Electricity markets can ensure that everyone gets access to this low-cost clean energy when they need it, and help accelerate the transition away from high-carbon fuels. Because they are more expensive to run, fossil plants get called on less and less in an energy market. Used less, they are removed from service sooner.

Two kinds of markets make this possible: first, the “day-ahead” market which “commits” power plants to meet expected demand in a given hour at a given price, and, second, the “real time” Energy Imbalance Market, or EIM, which covers any differences between what we thought we would need and the actual demand within five minutes of power being used. The fact sheet provides a readable, clear explanation of how each market works and how they work together to green the grid. The upshot is that it’s better to have both.

As the fact sheet notes: 

A major benefit of the EIM and of a potentially unified western regional grid is the increasing use of clean, renewable energy sources, such as solar and wind. The larger the system footprint—the area from which energy is being drawn—the easier it is to take advantage of variable renewable energy. For example, the sun is often shining in parts of the West while other places are obscured by clouds. The wind is usually blowing somewhere in the West when it is not in other parts of the region. By drawing power from across the region, an integrated western grid could ensure that clean power is available in nearly every hour of the day. Furthermore, California’s clean energy could reach a broader market, so we wouldn’t have to waste it when supply exceeds demand at certain times. Today, California sometimes produces more clean electricity than we need and is forced to “curtail” or turn off, some renewable power.

Feeling the heat

The recent heat waves in California and the West underscore the need to rely on a regionally coordinated and technologically balanced portfolio of clean energy resources from around the region.  Wasteful operational practices and the lack of a regional market can otherwise force us to meet high electrical demand during heat waves with dirtier and costlier power. 

We can do better, and, as this fact sheet shows, we know how.  If we are to accomplish the goals that climate scientists say are necessary to avert climate catastrophe—and which states, cities, communities, and progressive businesses are striving to meet—energy markets in a regionally integrated western grid are essential tools.