California’s electricity grid operator and Portland, OR-based PacifiCorp announced Tuesday an agreement to create a real-time market mechanism for improving the dispatching of power — a widespread efficiency improvement in the electric generation sector that could have lasting impact on demand for natural gas throughout the West.
MidAmerican Energy Holdings Co.’s PacifiCorp and the California Independent System Operator (CAISO) have signed a memorandum of understanding that commits the two largest grid operations in the West to create a real-time energy imbalance market (EIM) that promises to create substantial efficiencies and cost savings on the overall grid.
PacifiCorp CEO Greg Abel said once the details are finalized in a long-term agreement late next year, the two organizations’ respective grids will realize better reliability and increased cost savings from better integrating ever-greater volumes of renewable-based power. This promises to reduce somewhat the overall need for gas in the power sector.
“The natural gas fleet in the West is largely a critical element to be able to back up the increased use of renewable resources,” CAISO CEO Steve Berberich said.
“With the portfolio effect of [the increased use of] renewables, you would expect less need for that back up because we’ll have better ‘shaving’ of the renewable load as compared to what we have in our single core area or PacifiCorp’s single area, so we are going to be able to leverage [the overall power generation] fleet better and more efficiently.”
Berberich concluded that this will allow the state grid operator to make greater use of renewables and use the natural gas fleet more efficiently.
But won’t that require CAISO to sign more EIM deals with other electric control area operators? Berberich said no.
“I certainly think that PacifiCorp is large enough to have quite a measurable impact,” Berberich said. “And as we have gone through trying to weigh the costs and benefits to value this agreement, we determined that there is value to both the PacifiCorp customers and electricity consumers in California.”
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