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Greentech Media: Growing Energy Markets: Southwest Power Pool Expands Day-Ahead Trading to the West

Posted by Jeff St. John on Feb 1, 2021

Greentech Media profiled Southwest Power Pool’s Western Energy Imbalance Service Market, quoting AEE’s Amisha Rai on market integration. Read excerpts below and the full story here.

Interstate grid operator Southwest Power Pool has expanded its wholesale energy market, the latest step in a series of nationwide moves aimed at bringing more efficiency to parts of the country rich in renewable energy potential but lacking in the energy trading regimes to make the best use of it.

Monday’s launch of SPP’s Western Energy Imbalance Service Market will bring real-time energy-balancing trading activity to eight utilities and transmission authorities across Colorado, Wyoming, Montana, South Dakota and Nebraska.

These regions have some of the best wind power resources in the country and are seeing a massive growth of wind farms to take advantage of it. But like other parts of the country with fast-growing renewables, they can struggle to integrate wind power into the bilateral arrangements they've previously relied on to balance generation capacity with electricity demand across their interconnected transmission systems.

The Western Energy Imbalance Service Market doesn’t bring the full range of day-ahead energy trading or transmission planning coordination that SPP manages for utilities across its existing footprint spanning 17 states. But it is expected to lower wholesale energy costs and reduce transmission congestion to the tune of about $49 million per year...

Some stakeholders are calling for even broader market integration, however, encompassing not only energy trading but also planning and cost-sharing for generation capacity and transmission across the West and Southeast…

Advanced Energy Economy (AEE), another group representing companies with aggressive clean energy goals, has also made expanded regional markets a key policy priority. Going beyond voluntary energy trading regimes to more fully integrated structures is particularly important to create structures for building the transmission networks needed to carry wind and solar power from remote regions to population centers. 

“This has been a decades-long discussion,” Amisha Rai, AEE managing director, said in a recent interview. “You have multiple states looking to establish a clean energy grid. It’s a regional challenge that requires a regional approach.” …

Getting utilities, state lawmakers and regulators to agree on the governance structures for broader market integration "comes with major challenges,” Rai said. “A lot of that, I think, requires governors and administrators to engage and provide direct guidance, and key decision-makers in the state to prioritize economic development, as well as the public ratepayer benefits that are tied to the development of an RTO.”... 

“What I’m looking forward to is a constructive federal-state relationship with this,” Rai said. “If the regions are able to prosper and figure out a robust pathway to a 100 percent clean grid, that’s going to benefit the nation as a whole from an economic development standpoint.” 

Read the full GTM story here

Topics: AEE In The News