California ISO releases final study on multi-state energy market

The California Independent System Operator on July 12 released the final study results on the potential effects of creating a multi-state, regional electric market.

The findings show that by expanding the energy grid, California would reach its 50% renewable energy goal while saving consumers up to $1.5 billion by 2030, lowering greenhouse gas emissions and adding jobs in California.

“The studies’ conclusions mirror the preliminary results showing the benefits of expanding the ISO market, advantages we predict will only grow over time,” said ISO CEO Steve Berberich. “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.”

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

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. Market simulations demonstrated that a regional energy market would reduce California’s carbon dioxide emissions in 2030 by 4 million to 5 million metric tons, or 8% to 10% of the state’s total electricity sector emissions. The western region would see a decrease of 10 million to 11 million metric tons, or about 3.5%, in 2030.

Other potential effects of an expanded regional energy market include:

  • creation of 9,900 to 19,400 new jobs in the state by 2030, primarily as a result of lower energy rates;
  • increased investment in low-cost 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;
  • 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;
  • increased integration of renewables and reduced need for curtailment of renewable resources by offering excess energy across the West.

SB 350, signed into law last year, assigned the ISO the task of conducting studies on the impacts of a regional energy market in the following areas:

  • Job creation and retention, and other economic impacts
  • Environmental impacts to California and elsewhere
  • Effects on disadvantaged communities
  • Emissions of greenhouse gases and other air pollutants
  • Grid reliability and renewable energy integration

The studies were launched in February, and since then, hundreds of stakeholders have engaged in a public review process, including comments from the energy industry, regulatory agencies, utilities, consumers, and environmental advocates. Preliminary study results were released May 20. The studies will also be discussed in greater detail during a joint, multi-agency public workshop on July 26 in Sacramento, California.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.