NREL is a national laboratory of the U.S. Department of Energy, Office of Energy 

Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Contract No. DE-AC36-08GO28308

An Analysis of the Impact of 

Balancing Area Cooperation 

on the Operation of WECC and 

the Compounding Effect of 

Wind and Solar Generation

Gary Jordan and Dick Piwko

GE Energy

Wilmington, Delaware

NREL Technical Monitor: Debra Lew

Subcontract Report

NREL/SR-5500-53095

February 2013
NREL is a national laboratory of the U.S. Department of Energy, Office of Energy 

Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

National Renewable Energy Laboratory

15013 Denver West Parkway

Golden, Colorado 80401

303-275-3000 • www.nrel.gov

Contract No. DE-AC36-08GO28308

An Analysis of the Impact of 

Balancing Area Cooperation 

on the Operation of WECC and 

the Compounding Effect of 

Wind and Solar Generation 

Gary Jordan and Dick Piwko

GE Energy

Wilmington, Delaware

NREL Technical Monitor: Debra Lew

Prepared under Subcontract No. AAM-8-77557-01

Subcontract Report

NREL/SR-5500-53095

February 2013
This publication received minimal editorial review at NREL.

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1 

An Analysis of the Impact of Balancing Area 

Cooperation on the Operation of WECC and the 

Compounding Effect of Wind and Solar Generation

Introduction 

One of the issues that arose in the Western Wind and Solar Integration Study, WWSIS, 

was the impact of Balancing Area (BA) size and the amount of coordination and 

cooperation necessary. Most of the production simulation cases in WWSIS assumed that 

the thermal and hydro generation in WECC would coordinate within the limits of the 

transmission system to best address variability and uncertainty imposed by wind and 

solar generation. This analysis uses a similar production simulation database, but with 

varying BA sizes and hurdle rates to examine this question in greater detail.

WWSIS used a Western Electricity Coordinating Council (WECC) database developed 

from Ventyx data in 2008. The system was broken into 104 separate load and generation 

areas and used a simple “bubble model” to represent transmission constraints. This new 

database uses the November 2010 Ventyx version of a key source and uses a full 

transmission system representation. In both cases, the year 2017 was chosen for 

simulation. The average price assumed for natural gas was $7.50/Mbtu and carbon costs 

were ignored. The new version of the database models WECC with 41 load and 

generation areas that are largely aligned with the existing BAs in the WECC system. 

These areas were grouped into 28 companies and five large regions. These are defined in 

Table 1 and shown in Figure 1. Note that all the “areas” within the California 

Independent System Operator (CAISO) footprint were grouped into one “company” 

called CAISO.

It is not the intent of this analysis to exactly model the operation of the BAs within 

WECC. Rather, it is to examine the operational benefits of increased cooperation 

between a large number of operating regions. To that end, some approximations were 

taken with the data. Although they operate mostly independently, the separate companies 

do have remotely owned and jointly owned generation. Where that information was 

available, it was included in the analysis. In addition, each company was required to 

maintain a spinning reserve equal to 3% of the hourly load in this simulation. 
2 

Table − 1 Breakdown of Areas, Companies, and Regions. 

Area Abrieviation Area Name Company Name

AESOA Alberta AESO_CO 

AZPSA Arizona Public Service Co AZPS_CO 

EPEA El Paso Electric EPE_CO 

NEVPA Nevada Power Co NEVP_CO 

PNMA Public Service Co of New Mexico PNM_CO 

SRPA Salt River Project SRP_CO 

TEPCA Tucson Electric Power Co TEPC_CO 

WALCA WAPA - Desert Southwest WALC_CO 

CFEA CFE - North Baja California CAISO_CO

CISOPGEA Pacific Gas & Electric - Main CAISO_CO

CISOSCEA Southern California Ediso CAISO_CO

CISOSDGA San Diego Gas & Electric CAISO_CO

CISO-SFA Pacific Gas & Electric - ZP26 CAISO_CO

CISOZ26A Pacific Gas & Electric - SF CAISO_CO

IIDA Imperial Irrigation District CAISO_CO

LDWPA Los Angeles Department of Water and Power CAISO_CO

SMUDA Sacramento Municipal Utilities District CAISO_CO

TIDA Turlock Irrigation District CAISO_CO

AVAA Avista AVA_CO 

BCTCA British Columbia Hydro and Power Authority BCTC_CO 

BPATA Bonneville Power Administration BPAT_CO 

CHPDA PUD No 1 of Chelan County CHPD_CO 

DOPDA PUD No 1 of Douglas County DOPD_CO 

GCPDA PUD of Grant County GCPD_CO 

IPCOA Idaho Power IPCO_CO 

NWMTA Northwestern Energy - Montana NWMT_CO 

PACE-IDA PACE - Idaho PACE_CO 

PACE-UTA PACE - Utah PACE_CO 

PACE-WYA PACE - Wyoming PACE_CO 

PACWA Pacificorp West PACW_CO 

PGEA Portland General Electric PGE_CO 

PSEIA Puget Sound Energy PSEI_CO 

SCLA Seattle City Light SCL_CO 

SPPCA Sierra Pacific Power Co SPPC_CO 

TPWRA Tacoma Public Utilities-Tacoma Power TPWR_CO 

WAUWA WAPA - Upper Great Plains WAUW_CO 

PSCO-EA Public Service of Colorado - East PSCO-E_C

PSCO-WA Public Service of Colorado - West PSCO-W_C

WACM-CEA WAPA - Colorado Missouri (Colorado East) WACM_CO 

WACM-CWA WAPA - Colorado Missouri (Colorado West) WACM_CO 

WACM-WYA WAPA - Colorado Missouri (Wyoming) WACM_CO 
3 

Figure 1 − Map of WECC areas.

Source: Ventyx, 2010.

Methodology 

Even in an environment of BA cooperation, it was felt that there would be some threshold 

on the economic interchange of energy. To model this, a $5/MWh “hurdle rate” was 

assumed between the neighboring companies in both the commitment and dispatch in the 

“ideal” case, which represents a high level of BA cooperation. With this assumption, 

neighboring companies would commit additional generation for sale if their cost were at 

least $5/MWh cheaper than the current bid price. Similarly, companies would de-commit 

generation if it appeared to be cheaper to purchase it from someone else. This 

“optimum” commitment would then be used in the real time dispatch and the energy 

interchange would take place as long as the hurdle rate was exceeded and the 

transmission system allowed.
4 

To approximate a level of reduced cooperation, a $25/MWh hurdle rate was assumed in 

both generation commitment and dispatch. This would largely eliminate energy 

interchange unless there was an extreme difference in price.

An intermediate step was also modeled that assumed a $25/MWh hurdle rate in the 

commitment. In this way, the day-ahead commitment would predominantly use each 

company’s generation resources to meet their load. In the real-time dispatch, the hurdle 

rate was lowered to $5/MWh so that increased economical interchange could take place 

among the committed generators. 

These three levels of operation were then coupled with two penetration levels of wind 

and solar generation. The lowest level only modeled the renewable generation in place 

by the end of 2008. This was a negligible amount of solar and slightly over 2% energy 

penetration for wind (~ 7,500 MW). This roughly corresponds to the “Preselected” 

scenario in WWSIS. The next level included announced sites along with additional 

generation to meet projected Renewable Portfolio Standards (RPS) by 2017. This was 

slightly over 1% penetration for the solar (~8,000 MW) and 6% for wind (~22,000 MW). 

Wind and solar contribution patterns were drawn from the WWSIS database. Future 

analysis beyond the scope of this study may examine higher levels of wind and solar 

energy penetration. 

The entire analysis was then repeated with the hurdle rates only imposed between the 

five regions. This represents a high level of regional coordination with varying levels of 

inter-regional cooperation. In these cases, each region was required to carry a spinning 

reserve equal to 3% of the load. The 6 cases examined are summarized in Table 2. 

Table 2 − Scenario case matrix.

Company level operation

Commitment 

hurdle rate

Dispatch 

hurdle rate

Low 

renewable 

penetration

Medium 

renewable 

penetration

$5/MWh $5/MWh X X

$25/MWh $5/MWh X X

$25/MWh $25/MWh X X

Results

The total operating costs for the various cases are shown in Figure 2. The general trends are 

as expected. Increasing the boundaries between the companies, in either just the commitment 

or for both the commitment and dispatch, increases the total operating costs. The spinning 

reserve was held at 3% of load in all cases. In practice, the company-level spinning reserve 

may need to be higher than assumed here because 3% of the load may not be sufficient to 

cover generator contingencies in all hours. Increasing the penetration of renewable 

generation reduces the total operating costs, but shows the same general trends.
5 

Figure 2 − Total operating costs.

Figure 3 shows the reduction from the high hurdle rate case for commitment and dispatch. 

This figure highlights the fact that increasing the coordination between the companies in both 

the commitment and dispatch will significantly increase the overall savings. (Note: Reducing 

the commitment and dispatch hurdle rate below the $5/MWh level did not have any 

significant impact on the operating costs. That indicates that it is the trade off of gas and coal 

energy that is providing the savings and not just the incremental value of slightly better heat 

rates.) Reducing the hurdle rate in the dispatch only and keeping the same level of 

commitment provides 20% to 40% of the total savings potential.

Figure 3 − Operating cost reductions from high hurdle rates.

Another aspect of operation with renewables is the amount of spilled energy (i.e., wind or 

solar or hydro energy that could not be used). Figure 4 shows that low levels of 

cooperation in the company level dispatch results in higher levels of spilled energy. This 

shows that increasing the level of cooperation in the real time dispatch, even without 

 

16,500

17,000

17,500

18,000

18,500

19,000

19,500

20,000

20,500

21,000

21,500

Company (low renewables) Company (medium

renewables)

Total Operating Costs ($M)

$5 cmt/ $5 dis

$25 cmt/ $5 dis

$25 cmt/ $25 dis

 

0

100

200

300

400

500

600

700

Company (low renewables) Company (medium renewables)

Operating Cost Reductions ($M)

$5 cmt/ $5 dis

$25 cmt/ $5 dis
6 

modifying the commitment, will significantly reduce the amount of spilled energy. This 

result is even more important as the penetration levels increase.

Figure 4 − BA impact on WECC-US spilled energy.

Figure 5 shows the impact on the level of generation by type for the company-level 

dispatch. For both levels of renewable penetration, increasing the hurdle rates for either 

just the commitment or for both the commitment and dispatch will reduce the operation 

of the base and intermediate generators (coal and combined cycle), and increases the 

generation from peaking units (gas turbines and gas steam units). Increasing the dispatch 

hurdle rate encourages companies to operate higher cost resources rather than taking 

advantage of cheaper resources available on neighboring systems. Having a high hurdle 

rate in the commitment makes a company less likely to turn on a low cost resource to sell 

to their neighbor. 

Spilled Energy

0

500

1,000

1,500

2,000

2,500

Company (low renewables) Company (medium renewables)

Spilled Energy (GWh)

$5 cmt/ $5 dis

$25 cmt/ $5 dis

$25 cmt/ $25 dis
7 

Figure 5 − Generation by type and company-level operation.

Conclusions 

Increasing the cooperation between the many BAs within WECC can significantly reduce 

operating costs. Increased BA cooperation becomes more beneficial as levels of 

renewable generation increase. Maintaining existing commitment strategies, but 

increasing coordination in the real-time dispatch will significantly reduce the amount of 

spilled energy, but will only capture 20% to 40% of the total operating cost savings 

potential. The maximum savings result when both commitment and dispatch of 

generation is coordinated across the system. 

 

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

CC Coal GEO GT Hydro Nuclear PSH St Gas St other Solar Solar

PV

Wind

Generation (GWh)

$5 cmt/ $5 dis, low renewables

$25 cmt/ $5 dis, low renewables

$25 cmt/ $25 dis, low renewables

$5 cmt/ $5 dis, medium renewables

$25 cmt/ $5 dis, medium renewables

$25 cmt/ $25 dis, medium renewables