NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Western Interconnection 

Energy Imbalance Market 

Status and Prospects 

UWIG Market Operations and 

Transmission Policy Users Group

Michael Milligan (NREL)

Brendan Kirby and

Jack King (NREL consultants), 

Steve Beuning (Xcel)

National Renewable Energy Laboratory

Oct .12, 2011 

NREL/PR-5500-53298 Photo by NREL/PIX 19498
National Renewable Energy Laboratory 2 Innovation for Our Energy Future

• Introduction to the Western Energy Imbalance Market (EIM);

• Evaluation status;

• Method;

• Analysis overview of results;

• Appendix:

– Study Data;

– Sub-regional results,

• (Brendan Kirby will discuss allocation on Thursday).

Contents 

This presentation is based on

NREL Variability Analysis for the Western Interconnect, Webinar by NREL for WECC, July 

29, 2011. Available at www.nrel.gov/publications

 

King, Kirby, Milligan, Beuning, “Operating Reserve Implication of Alternative 

Implementations of an Energy Imbalance Service on Wind Integration in the Western 

Interconnection, NREL Technical Report NREL/TP-5500-52330, in press. Available at 

www.nrel.gov/publications
National Renewable Energy Laboratory 3 Innovation for Our Energy Future

• Potentially, the entire 

Western 

Interconnect, absent 

CAISO and AESO;

• Individual balancing 

area (BA) decision to 

join;

• Full footprint or subregional 

implementations 

possible (or others).

What Footprint Would the EIM Cover?
National Renewable Energy Laboratory 4 Innovation for Our Energy Future

What is the Energy Imbalance Market (EIM)?

• 5-minute energy imbalances settled across 

participants in Western Interconnection;

• Dispatch only (no coordination on commitment);

• Modeled after SPP’s energy market.
National Renewable Energy Laboratory 5 Innovation for Our Energy Future

Operational Overview 

Schedule Day-Ahead & 

Up-to 30 minutes prior to

Operating Hour 

Real-time 

Dispatch Post-Operating 

time

Forecast and

unit Commit

Generators

self-schedule

Generators 

voluntary submit

offers

DSM resources 

voluntary submit

offers

Prepare and 

finalize predispatch schedules

Perform securityconstrained 

economic dispatch 

to keep balance

Provide re-dispatch

if any congestion

occurs

Send dispatch

setpoints to

generators

Coordinate any

contingency

reserve deployments

with EIS dispatch

Market Participant: WECC EIS Market Operator:

Gather meter

data to support

settlements

Provide 

settlement statement

and invoices

Transmission Provider:

Provide meter

data to support

settlements
National Renewable Energy Laboratory 6 Innovation for Our Energy Future

Who Would Operate the Market?

• Unclear;

• Possibly WECC1; 

• Many discussions are ongoing;

• Functional specifications for the market are now 

under development;

• Unclear whether software would be developed 

from scratch or adapted from other similar 

markets (SPP, CAISO with modifications, MISO, 

PJM, ???).

1 We differentiate WECC – Western Electricity Coordinating Council, 

(WECC) an institution, from the Western Interconnection, which is a 

physical electrical footprint.
National Renewable Energy Laboratory 7 Innovation for Our Energy Future

Cost-benefit Study

• Key costs are: 

– Implementation;

– Ongoing market operations;

– Difficult to define without knowing whether develop 

from scratch or purchase/modify existing system.

• Benefits:

– Reduction in operating cost:

• More economic dispatch;

• Reduced reserve deployment for:

– Regulation;

– Short-term load following (spin);

– Load following (non-spin and supplemental).
National Renewable Energy Laboratory 8 Innovation for Our Energy Future

Benefit Study

• Carried out by WECC’s consultant E3;

• Gridview production simulations with/without the 

EIM;

• NREL-provided reserve deployment:

– With EIM;

– Without EIM,

• Modeling challenges:

– Production simulation of business-as-usual is difficult, 

if not impossible (given data availability) in the WI.
National Renewable Energy Laboratory 9 Innovation for Our Energy Future

Prospects 

• Unclear;

• E3 study evaluated only system-wide benefits;

• Individual BA’s decide whether to participate 

(and generators can decline within the BA);

• Individual BA analysis is underway;

• Timeline for final decision is unclear.
National Renewable Energy Laboratory 10 Innovation for Our Energy Future

Reserve deployment implications
National Renewable Energy Laboratory 11 Innovation for Our Energy Future

Model Area

WALC

BPA

PACW

EPE

CHPD

GCPD

DOPD

TPWR

SCL

TEP

SRP

AZPS

TID NEVP

SMUD

PNM

PSCO

SPP

PACE

WACM

NWE

IPC

PGE

AVA

BCTC

PSE

IID

• Based on TEPPC PC 0;

• Areas of the WI not 

already in a market 

structure (CAISO, 

Alberta);

• LADWP not included;

• Analysis at BAA 

granularity;

• Generation only BAAs 

not considered;

• 28 load and generation 

BAAs retained – The 

study ‘Footprint’;

• Regions are:

– Columbia Grid – Orange;

– NTTG – Blue;

– West Connect – White.
National Renewable Energy Laboratory 12 Innovation for Our Energy Future

Reserve Calculations
National Renewable Energy Laboratory 13 Innovation for Our Energy Future

• Method developed for the EWITS study*;

• Statistical approach based on 10-minute time 

series wind, solar and load;

• Method that can estimate adequate reserves to 

cover the short term and hour-ahead forecast error 

based on historical data;

• Predicts requirements based on current hour load 

and wind, solar production;

• Statistically combine with load regulation 

requirements;

• Provide 8760 vector of requirements for the 

production simulations.

*For in-depth discussion, see section 5 of the EWITS final report: 

http://www.nrel.gov/wind/systemsintegration/pdfs/2010/ewits_final_report.pdf

Reserve Calculations
National Renewable Energy Laboratory 14 Innovation for Our Energy Future

• Regulation – Fast changes:

– Due to variability and short term 

forecast errors;

– Faster than re-dispatch period;

– AGC resources required.

• Spinning – larger, less frequent 

variations:

– Due to longer term forecast 

errors; 

– AGC not required;

– 10-minute response.

• Non-spinning/supplemental:

– Large, infrequent, slow moving 

events such as unforecasted

ramps.

– 30-minute response.

Reserve Definitions 
National Renewable Energy Laboratory 15 Innovation for Our Energy Future

Verification of Reserve Coverage

• Shows coverage of 

VG intra-hour 

movements;

• Actual ramp data 

from footprint EIM;

• Red line – Actual 

average reserve 

calcs from footprint 

EIM;

• Probability lines are 

z% of all ramps at x 

minutes are less 

than y MW.
National Renewable Energy Laboratory 16 Innovation for Our Energy Future

Reserves Provided to E3 for Phase 2 Study

• NREL provided reserve calculations to E3 for phase 2 

study;

• Slight variation in calculation of regulation component – 

load not included in E3 Flex;

• Does not include contingency reserves;

• Areas are slightly different from each other.

NREL E3 Response Notes

Regulation Flex AGC

E3 flex reserve does not 

contain load

Spin Spin <10 minutes

Non-spin Supplemental <30 minutes Terminology change
National Renewable Energy Laboratory 17 Innovation for Our Energy Future

Analysis
National Renewable Energy Laboratory 18 Innovation for Our Energy Future

Cases

• Complete analysis includes:

– Footprint EIM

• All 28 BAAs participating. 

– ‘Regional’ EIM implementations

• Columbia Grid;

• Northern Tier Transmission Group;

• WestConnect.

– EIM implementations without BPA and/or WAPA 

participation.

– Comparison to the Business As Usual (BAU) case – 

No EIM in place.

– Selected results.
National Renewable Energy Laboratory 19 Innovation for Our Energy Future

Reserve Details for Footprint and Regional EIM

• Up to 42% (2000 MW) 

reduction in total 

reserve requirement 

for footprint EIM;

• 26% for regional 

EIMs.

Reduction over BAU

Footprint Regional

MW

% 

Reduct. MW

% 

Reduct.

Total Reg 570 36% 419 26%

Spin 481 45% 271 25%

Non-spin 963 45% 542 25%

Total 2014 42% 1233 26%
National Renewable Energy Laboratory 20 Innovation for Our Energy Future

Reserve Reduction Duration – Footprint EIM

• Average reductions:

– 590-MW Regulation

– 2092-MW Total Reserves
National Renewable Energy Laboratory 21 Innovation for Our Energy Future

E3 Gridview Analysis

• http://www.wecc.biz/committees/BOD/EDTSC/

EDTTRS/EDTTRS%20Meeting06142011/defau

lt.aspx?InstanceID=1; 

• Found $175M annual operational savings;

• Approximately $101M from reduced reserve 

deployment;

• Individual utilities/BAs are undertaking their 

own analyses to localize benefits;

• NREL assistance for some areas with funding 

from OE.
National Renewable Energy Laboratory 22 Innovation for Our Energy Future

EIM Benefit Depends On...

• Penetration of 

wind/solar;

• Level of participation, 

including market scope;

• Method, including the 

difficulties in accurately 

modeling today’s case;

• WECC/E3 is a “point” 

analysis with no 

apparent recognition of 

this;

• Example: Lew, Milligan, 

Jordan, Piwko, Kirby, 

King, Beuning: “An 

Analysis of the Impact of 

Balancing Area 

Cooperation on the 

Operation of the 

Western Interconnection 

with Wind and Solar 

Generation.”

0

100

200

300

400

500

600

700

Company

(low

renewables)

Company

(medium

renewables)

Operating Cost 

Reduction ($M)

Full

Dispatch

www.nrel.gov/docs/fy11osti/51546.pdf
National Renewable Energy Laboratory 23 Innovation for Our Energy Future

Conclusions 

• Method for calculating additional reserve 

requirements due to wind and solar production;

• EIM results in substantial reduction in reserves 

requirements and ramping demand;

• Reduced participation reduces benefits for all 

but reduces the benefits to non-participants the 

most;

• Full participation leads to maximum benefit 

across the Western Interconnection, up to 42% 

of total reserve requirement; 

• Regional EIM implementations have smaller but 

substantial benefits.
National Renewable Energy Laboratory 24 Innovation for Our Energy Future

More Information

• http://www.wecc.biz/committees/BOD/EDTSC/E

DTTRS/EDTTRS%20Meeting06142011/Lists/Pr

esentations/1/E3_Phase2_Methodology_and_B

enchmark_EDTTRS_Update_2011-06-

14am_update.pdf (hint: open the WECC 

calendar, move to June 14, 2011, and find the 

EDTTRS meetings.

• www.nrel.gov/publications - several reports by 

Milligan, King, Kirby, Beuning
National Renewable Energy Laboratory 25 Innovation for Our Energy Future

Appendix 
National Renewable Energy Laboratory 26 Innovation for Our Energy Future

• 2020 loads provided by WECC;

• Load shape is based on 2006 load;

• 193,700 MW in full Western Interconnect (noncoincident;)

• 116,700 MW in analysis footprint (noncoincident);

• One hour load provided, 10-minute synthesized.

Load Data
National Renewable Energy Laboratory 27 Innovation for Our Energy Future

• NREL WWSIS wind dataset for 2006

• 10 Minute resolution

• Sites identified by TEPPC 2020 PC 0

• 29,085 MW in Western Interconnect

• Approximately 8% of WI 2020 load

• 18,272 MW nameplate modeled in analysis

footprint

Wind Data
National Renewable Energy Laboratory 28 Innovation for Our Energy Future

• NREL WECC Solar dataset for 2006

• 10-minute resolution;

• Sites identified by TEPPC 2020 PC 0;

• 14,300 MW in WI;

• Approximately 3% of WI 2020 load;

• 4,568-MW nameplate capacity in analysis 

footprint.

Solar Data
National Renewable Energy Laboratory 29 Innovation for Our Energy Future

Calculation of Short-term Forecast Error

• Calculate and sort error 

by production level;

• Divide production into 

deciles;

• Calculate error sigma in 

each decile; 

• Blue line is calculated 

from data;

• Red line is curve-fit;

• Equation of the curve 

shown below.

σSS HHHHHH WWWW

= −6.72E − 06 ∙ (HHHHHH WWWW)2 + 0.0437 ∙ (HHHHHH WWWW) + 26.74
National Renewable Energy Laboratory 30 Innovation for Our Energy Future

Hour-ahead Forecast Errors

• Repeat the short-term forecast procedure with 

hour-ahead forecasting;

• Again, same procedure for wind and solar;

• Load following not included.

σHHHH−aaaaa HHHHHH WWWW

= −2.985E − 05 ∙ (HHHHHH WWWW)2 + 0.1895 ∙ (HHHHHH WWWW) + 103.2 
National Renewable Energy Laboratory 31 Innovation for Our Energy Future

Spin and Non-spin Calculation

• One sigma allocated to Spinning category

SS S RRR RRR R HHH − aa a w f f f

1 ∙ σh−aaaaa(P P HHHH WWWW)

– Covers 68%* of all movements less than 1 hour

– With regulation, covers approximately 98% of 30 minute 

movements

• Two sigma allocated to Non-spin category

N − RRR RRR R HHHH − aa a w f f f =

2 ∙ σh−aaaaa(P P HHHH WWWW)

– With spin, covers 99.7%* of all movements less than 1 hour

*assuming movements are normally distributed which is slightly optimistic 
National Renewable Energy Laboratory 32 Innovation for Our Energy Future

Regional EIM – Columbia Grid (CG)

• Average reserves 

for a CG EIM;

• BPA dominates the 

wind so saving less 

than other regions;

• 8070 MW wind.

Reserve Reduction

MW % Reduc. 

Load Reg 37 14%

Wind Reg 39 15%

Solar Reg 0 0%

Total Reg 85 21%

Spin 38 12%

Non-spin 76 12%

Total 199 15%
National Renewable Energy Laboratory 33 Innovation for Our Energy Future

Regional EIM – NTTG 

• Average reserves;

• Very small solar;

• Wind dominates 

savings;

• ~4200 MW wind 

and 20 MW solar.

Reserve Reduction

MW % Reduc. 

Load Reg 28 12%

Wind Reg 87 45%

Solar Reg 0 0%

Total Reg 82 25%

Spin 79 42%

Non-spin 158 42%

Total 319 36%
National Renewable Energy Laboratory 34 Innovation for Our Energy Future

Regional EIM – WestConnect (WC)

• Average reserves;

• Substantial saving 

from wind and solar;

• ~5700 MW wind 

and 4550 MW solar.

Reserve Reduction

MW % Reduc.

Load Reg 113 22%

Wind Reg 105 41%

Solar Reg 46 20%

Total Reg 253 34%

Spin 154 27%

Non-spin 307 27%

Total 714 29%