Calif. ISO: How A Regional Energy Market Would Impact Renewables

Posted by Joseph Bebon on July 13, 2016 No Comments
Categories : Policy Watch

By creating a multistate, regional electric market, California could reach its 50% renewable energy goal and save consumers up to $1.5 billion by 2030, according to newly released findings from the California Independent System Operator (CAISO).

The studies, conducted on behalf of CAISO by experts in the fields of energy, environment and economics, were required under the state’s Clean Energy and Pollution Reduction Act (S.B.350), which set a 50% renewable portfolio standard by 2030.

“The studies’ conclusions mirror the preliminary results showing the benefits of expanding the ISO market – advantages we predict will only grow over time,” says Steve Berberich, CEO of CAISO. “We believe the findings in these studies will help drive the formation of a new, more efficient, cost-effective and greener western electric grid. It’s also clear that a regional grid allows California and other states to eventually exceed their renewable goals, including California’s 50 percent mark.”

CAISO says a western-state interconnected electric system is expected to lower power purchasing costs, leverage market and operation efficiencies over a larger geographical area, and optimize transmission project planning.

In addition, market simulations demonstrate that a regional energy market would reduce California’s carbon-dioxide emissions in 2030 by 4 to 5 million metric tons – 8% to 10% percent of the state’s total electricity sector emissions. The western region would see a decrease of 10 to 11 million metric tons – about 3.5% – in 2030, according to the findings.

Other potential effects of an expanded regional energy market include as follows:

  • The creation of 9,900 to 19,400 new jobs in the state by 2030, primarily as a result of lower energy rates;
  • A slight increase in the state’s household income of $300 to $550 on average by 2030;
  • An increased investment in clean energy generation, including new wind and solar resources, to meet the state’s renewable energy targets;
  • Lower impacts on land, water and biological resources as more strategic planning reduces the number of transmission projects needed for reliability;
  • Reduced emissions of carbon dioxide, nitrous oxide, sulfur dioxide and hazardous particulate matter in California and across the western states;
  • Economic benefits to disadvantaged communities, including stimulating job growth and increasing incomes;
  • Lower energy costs due to smaller operating reserves;
  • Better real-time visibility of system conditions in the larger geographic footprint and enhanced management of regional power flows; and
  • Increased integration of renewables and the reduced need for curtailment of renewable resources by offering excess energy across the west.

CAISO says the required studies were launched in February, and since then, hundreds of stakeholders have engaged in a transparent public review process, including comments from the energy industry, regulatory agencies, utilities, consumers and environmental advocates. The studies will be discussed in greater detail during a joint, multi-agency public workshop on July 26 in Sacramento, Calif.

For more information on the studies, click here.

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