California could benefit from a widespread electric power grid in the West, according to a new report from the National Renewable Energy Laboratory.
The study, The Impacts on California of Expanded Regional Cooperation to Operate the Western Grid, is the final report in a series of studies authorized by California’s legislature.
The studies reviewed for the report “demonstrate that California’s goals for renewable energy and greenhouse gas reduction can be achieved more quickly and with less cost to Californians through expanded regional cooperation,” the authors wrote. “The magnitude of those benefits will vary based on the mode of cooperation and on the states and utilities that elect to participate,” they added.
As an example, the authors noted that the total benefits to California of a West-wide extended day-ahead energy market operated by the California Independent System Operator were less than the estimated benefits of a West-wide regional transmission organization, an option that was identified by the California legislature.
RTOs tend to yield “greater cost savings and grid flexibility than more limited forms of cooperation,” the report’s authors said. In addition, the RTO option would not remove the jurisdiction of California, or any other state, over its retail rates, resource planning, resource siting, transmission siting, renewable energy policies, or emissions reduction policies, the report noted, but it would very likely require changes to CAISO’s governance.
For the rest of the western United States, however, an extended day-ahead market retained a slightly larger portion of expected benefits of a full RTO, according to the report. Some of the technical studies reviewed in the report suggest the benefits of more comprehensive forms of regional cooperation such as a West-wide RTO might not be spread evenly across participating states and utilities, the authors noted.
Transmission planning across a region, rather than by individual utilities, can reduce transmission congestion costs and the cost of operating reserves required to maintain reliability, leading to more efficient use of the transmission system and greater reliability for customers, the report found.
Other benefits include less curtailment of solar and wind resources because of congested transmission paths and the ability to move excess wind and solar power elsewhere in the region when local production is high and demand is low, the authors said, adding that regional cooperation also can yield more operational flexibility to manage the variation in solar and wind output and better grid resilience. In addition to reducing production costs, regional cooperation can also offer “significant savings in the cost of resource adequacy,” the authors noted.
However, regional cooperation can take many other forms, some of which have been or are being implemented, “demonstrating a general momentum towards greater regional cooperation,” the authors said.
Policymakers must weigh the benefits of various regional cooperation solutions, but experiences in other parts of the country suggest regional cooperation is not one single decision but an evolutionary progression, the authors said. They noted that CAISO has operated a voluntary real-time Western Energy Imbalance Market since 2014 that has saved participants more than $3 billion and formed the foundation for CAISO’s approval in February 2023 of the Extended Day-Ahead Market that utilities may join without becoming full CAISO members.
Besides CAISO, other balancing authorities involved in preparing the report included the Balancing Authority of Northern California, the Turlock Irrigation District, the Western Area Power Administration, the Los Angeles Department of Water and Power, NV Energy, PacifiCorp, and the Imperial Irrigation District.
