WASHINGTON, D.C. — The U.S. Department of Energy (DOE) today announced the release of a new study that looks at options for more coordinated approaches to managing the electricity grid in the Western United States and shows how regional collaboration can support the delivery of clean, affordable power.
“The study exemplifies what can be accomplished when we work together,” said Acting Assistant Secretary for Energy Efficiency and Renewable Energy Kelly Speakes-Backman. ”Collaboration between these 11 states showed that a clean, coordinated, affordable grid can bring enormous benefits to consumers. This type of coordinated analysis and planning is a necessity if we hope to reach President Biden’s goal of a decarbonized electricity sector by 2035.”
In many regions of the county, demand for electricity is served by Regional Transmission Operators (RTOs) that act as the air traffic controllers for the power grid. Using sophisticated analytics, these entities coordinate the delivery of power often in real-time, prioritizing the delivery of low-cost power.
The two-year study, titled, “Exploring Western Organized Market Configurations: A Western States’ Study of Coordinated Market Options to Advance State Energy Policies (the State Market Study),” compared a “business-as-usual” scenario to a series of theoretical “future case” electricity market structures. At the high end, the study team found annual benefits of up to $2 billion from a western RTO in 2030, although that finding does not include ongoing costs to operate an RTO.
Collaboration has always been a hallmark in the West. All eleven western states—Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming—provided representatives from both state energy offices and public utility commissions, respectively, for a lead team that guided the study. Energy Strategies, a Salt Lake City-based consultancy provided the technical analysis and facilitation support.
The State Market Study includes the following key deliverables and findings:
- A Technical Report, which offers a both a region-wide and state-specific quantification of economic benefits from potential market options. As noted, while the modeling estimated economic benefits for all market option considered, including RTO alternatives, it was not a net benefit assessment of regional coordination.
- A Market and Regulatory Review Report comprised of three “Scorecards” that evaluate how an RTO and other wholesale market structures might impact state energy policy objectives.
- The Scorecards contains metrics to help states rank how market configurations could facilitate three priorities: the increased use of clean energy technologies, the reliable, affordable provision of energy to consumers, and the ability to retain state regulatory authority.
The study used production cost modeling to simulate the operations of the Western grid in 2020 and the 2030 timeframes under hypothetical market frameworks. It also looked at how operational dispatch, renewable curtailments, carbon emissions, and transmission congestion may be impacted by the same market formations.
“Policy and technology changes are impacting energy markets across the United States, and the West is no exception,” said Utah Director of the Office of Energy Development, Thom Carter. “While commentators often refer to Western electricity markets as 'balkanized,' cooperation is the norm in the West. We are grateful to have contributed to this study to add to conversations well underway throughout the West.”
“Colorado appreciates the support of DOE in bringing Western states together to discussion the potential of a Western electricity market to help enhance state’s achieving their energy goals and brining benefits to customers,” said Will Toor, Executive Director of the Colorado Energy Office.
“With some of the most ambitious clean energy goals and unique resources, the Western States are showing leadership to support a reliable, secure, and flexible grid,” said Pat Hoffman, Acting Assistant Secretary for the Office of Electricity. “Strategic planning and coordinated management are critical components to identifying and prioritizing solutions. The Western States Market report which is a hallmark example of how states can support greater grid flexibility with infrastructure investments.”
The Western States’ Market Study was funded through a DOE State Energy Program (SEP) competitive award to the Utah Office of Energy Development, in partnership with Colorado, Idaho, and Montana. DOE SEP competitive awards support state energy goals and provide opportunities for regional collaboration and partnerships.
The market reports are available at: https://www.energystrat.com/new-insights-experience
To learn more about DOE SEP, visit /eere/wipo/state-energy-program.